There is no secret that semiconductor industry cannot boast with huge profitability these days, which is why both Infineon, a chip giant from Europe, as well as Qimonda, a dynamic random access memory controlled by Infineon, will need to find investors from Asia to survive in the long term, said Max Kley, Infineon’s supervisory board chairman, in an interview.

In an interview with Sueddeutsche Zeitung, Mr. Kley revealed that Qimonda has been negotiating with an investor from a Chinese province who has sufficient capital and plans to establish a semiconductor fab in China. However, since Qimonda filed for insolvency in January, all the talks are now handled by insolvency administrator Michael Jaffé.

According to Mr. Kley, things are tough for Infineon as well: the company has to refinance over €1 billion of debts over the next couple of years, which will be hard to say at least due to global financial crisis. The company has attempted to merge with other players, such as Freescale or NXP, but it did not make a lot of sense due to rapid changes on the market.

There are proposals to create a European semiconductor giant, but Mr. Kley believes this hardly makes sense in the long term now that manufacturing is shifting to Asia.

“I don't think that this would be a good idea, [Infineon] of course is also looking [for merger partners] in Asia,” EETimes web-site quotes the supervisory board chairman of Infineon as saying.

Nevertheless, this all does not mean that chip industry should completely withdraw from Europe and the governments should not do anything about this process.

“We need more public aid. Government research subsidies should not be restricted to renewable energies. We should not forget that the semiconductor industry is a key industry for many other industry branches, namely the automotive industry,” Mr. Kley said.

Tags: Qimonda, Infineon, Business