ProMOS Technologies filed a suit against Infineon Technologies AG in a Hsinchu, Taiwan court last Monday. The former joint venture between Mosel Vitelic and Infineon accused the latter of depressing ProMOS’s stock and damaging the company’s reputation earlier this year, while trying to either exit the joint venture, or get 100% of ProMOS’ manufacturing capacity.

ProMOS claimed that Infineon Technologies blackmailed them to either dedicate 100% of manufacturing capacities, or Infineon would announce the selling off all its shares in ProMOS. The offering of the European memory vendor was considered as indecent proposal and rejected. After Infineon announced on the 9th of December the intention to break off all business relations with ProMOS, to sell all its shares and also cease to buy memory from them, stock of the Taiwanese DRAM maker plummeted. Moreover, the latter also accuses the number four memory chips vendor of unfair competition and spreading misinformation that harmed the reputation of ProMOS.

It is very hard to predict the results of the lawsuit because it will be pretty hard to prove the accusations, especially those about stock price plunge due to Infineon’s special purpose (if Infineon wants to sell off the shares, they probably do not want to be dirt cheap). We should also keep in mind the fact that Infineon may withdraw its manufacturing technology process license from ProMOS. Since the latter will not be able to make anything without Infineon’s fabrication technology for, at least, 9 to 18 months, it is very likely that ProMOS may still utilise the manufacturing technology, but as soon as Infineon files a lawsuit against them, may ask the former co-owner about out-of-court settlement and cancelling the lawsuits.

Infineon presently buys 40 to 50% of all chips made by ProMOS, what accounts for 15% to 20% of total Infineon’s DRAM shipments. Infineon signed agreement with Nanya earlier this year, sealed a deal with SMIC and also with Winbond Electronics to boost the manufacturing capacities. All in all, Infineon will still be able to supply its partners with DRAM components. On the other hand, Mosel Vitelic and ProMOS will be hard to utilise almost a half of abundant manufacturing capacities and it will be even tougher for the companies to upgrade the equipment and also pay debts, considering their consequential losses. It may appear that both companies will have to find foreign investors or ask their creditors to delay the payments.

See also:

- Infineon and Mosel Vitelic Split Up. ProMOS to Stay With Mosel
- Infineon and Nanya to Cooperate in DRAM Development
- Infineon Quits ProMOS. Goes to Nanya
- Infineon Wants 100% ProMOS Manufacturing Capacity. Everything or Nothing
- Mitsubishi, Elpida and PSC Form DRAM Alliance
- Former President of UMC Japan to Lead Elpida