Infineon Speeds Memory Separation

Online staff -- Electronic News, 3/31/2006

Infineon Technologies AG today announced that the separation of its memory products business group into a new company will be effective on May 1, two months ahead of schedule.

The new memory company, dubbed Qimonda AG, will be headquartered in Munich, Germany, as Infineon is, and will leave Infineon with logics as its sole technology focus.

Qimonda will start off as an Infineon subsidiary, then move to an initial public offering (IPO) as the preferred next step, Infineon said.

“Through the strategic realignment, Infineon is significantly strengthening its competitive position. From May 1 onward, both forceful players will operate in their own markets as industry leaders,” said Wolfgang Ziebart, CEO of Infineon.

“Various teams have been working hard and at full speed to accomplish the carve-out two months ahead of the original schedule. We are in good shape to press ahead in our efforts to increase value for our shareholders, employees and customers,” he continued.

The CEO-designate of Qimonda AG is Kin Wah Loh, who has been head of Infineon’s memory products business group since last summer and a member of the company’s management board since the end of 2004. Before becoming a member of the Infineon board, he was president and managing director of Infineon Technologies Asia Pacific.

“From the carve-out emerges a leading creative memory products company,” Loh said. “We will leverage our strong engineering expertise to expand our product and customer portfolio. We will constantly push the limits in technology and manufacturing. From a strategic point of view, this simply means that we believe this new company has the right recipe for sustained profitable growth.”

Joining Loh at the new company will be Peter J. Fischl, executive VP and CFO of Infineon, who will act as Qimonda’s designated chairman of the supervisory board.

Beyond Loh, Qimonda will take with it all of Infineon’s memory business, making it the fourth largest DRAM company from its start. Qimonda also will have access to five 300mm manufacturing sites in North America, Europe and Asia, and will operate five major R&D facilities, including what is now Infineon’s lead R&D-center in Dresden, Germany.

Without giving specifics, Infineon said that Qimonda intends to accelerate its manufacturing efficiency through a faster transition from the 90nm to the 75nm technology node. Qimonda will have approximately 12,000 employees worldwide.

Of Infineon’s own plans, CEO Ziebart said the company will continue to follow a clearly defined strategic direction. Dividing logics and memory into separate companies, Infineon has said, will encourage investment from the industry-focused capital market community, allow better use of Infineon’s manufacturing capability, and allow the spin off to expand from its primary focus on DRAM to a more broadened approach on other memories, such as flash.

“We intend to leverage our technological expertise further and we are focusing on becoming a world leader in semiconductor solutions for reducing energy consumption, increasing mobility, for the networked society and for security,” he said.

Infineon’s logic business has leading market positions in segments such as automotive electronics, industrial electronics and power management, chip cards and security ICs, radio frequency solutions, platforms for mobile telecommunications and broadband communications.