Qimonda Needs to Find Saviour in Four Weeks – Report.

Qimonda Has a Month to Find Its Saviour

[01/29/2009 12:04 PM]
by Anton Shilov

Qimonda AG, a troubled maker of dynamic random access memory, has a month to find an investor who will save the company, according to sources close to the company. If the firm does not find a saviour for itself, it will have to halt production, something, which is very positive for the DRAM market in general, but a disaster for Qimonda’s employees.

People familiar with the company said that Qimonda’s rivals have shown “first signs of interest” for the memory maker that has been focusing on high-end memory products, such as server memory, GDDR5 memory for graphics cards as well as XDR memory for Sony PlayStation 3 video game console and other advanced electronics. According to sources of the Financial Times, potential buyers could get a bargain for Qimonda’s state-of-the-art technology, although the need to fund further investment could easily drive up the total commitment to €500 million – €1 billion ($650 million – $1.3 billion).

“They’re looking for people with a big piggy-bank, although some kind of state subsidy might also be on the cards. So the potential buyers should be easy to name,” a person familiar with the insolvency proceedings is quoted as saying.

The state of Saxony, where Qimonda’s main plant is located, as well as the government of Portugal, where another production fab locates, are likely to offer Qimonda aid provided that there is another investor who is able to control the company and guarantee that the plants in Europe will continue to operate.

“If an investor offers these regions a future, the governments won’t turn away,” the anonymous person cited by FT said.

As private equity investors struggle with the credit crunch, Qimonda administrators are clearly hoping to lure DRAM stalwarts such as Elpida Memory, Hynix Semiconductor, Micron Technology or Samsung Electronics.

Tags: Qimonda, Business

Discussion

Comments currently: 1
Discussion started: 01/29/09 05:03:15 PM
Latest comment: 01/29/09 05:03:15 PM

[1-1]

Qimonda's trouble comes from its management team - mistake after mistake after mistake. They are always too slow in making important decisions, and they get them wrong anyway.

There was supposed to be a 7 month slow, gradual ramp down of Inotera lasting deep into the summer. How freakin stupid of CEO Kin Wah Loh and COO T.Seifert to imagine that? These two are totally lacking in business savvy. Finally in the last few days Inotera has decided to pull the plug, proclaiming no more wafer starts for Qimonda. Stopping production is what should have been ordered last year instead of this monstrous cash burn. Why are K.W.Loh and T.Seifert still around? Pure disaster of a management team. Is the board ready to give them the boot, or is the board still living in a socialist dream-world?

If they want to continue, move the fabs to China or Taiwan. There is not much DRAM R&D in China or Taiwan but there is low cost labor and engineers who will do it right if you show them the process technology and design.