Infineon Gets Out of DRAM Business
April 2, 2006 12:04 PM
comment(s) - last by
CEO Dr. Wolfgang Ziebart (left) of Infineon Technologies AG and Kin Wah Loh, CEO-designate of Qimonda AG
Organic looking "Q" meaning growth
Infineon's long winded time in the DRAM business has given way to a new company called Qimonda
The DRAM business is volatile -- much like the memory itself. Prices often swing in both directions widely and according to many in the business, ramps in either direction are difficult to predict. Interestingly, the bigger a company is in the DRAM business, the greater the difficulties. Over the past several years, DRAM companies have come under fire from the public as well as the law. DRAM companies ranging from Elpida, Hynix, Infineon, Micron to Samsung and a host of
others have been accused of DRAM price fixing
in which said companies jointly agreed to participate in cartel-like business practices. Of course, such actions don't go unnoticed.
Previously, Infineon was given a fine of $300 million for its illegal business activities -- a miniscule amount compared to the $24 billion industry that Infineon was in. However, according to financial reports, Infineon previously made $150 million of net profit on $3.2 billion in sales revenue. Considering its actions, losing roughly two year's worth of net income for questionable business tactics is just not worth it -- as the saying goes, crime doesn't pay.
Infineon's jump out of the DRAM business was not without foreshadowing. Besides the accusations of its price fixing, Infineon was also in a drawn out court battle with DRAM IP company Rambus. After roughly $5 million of legal expenses, Infineon agreed to settle with Rambus. Later, Infineon took Rambus back into court with claims that Rambus had destroyed important documents. The courts tossed Infineon’s claims and dismissed the case as unsubstantial. Just last week, Siemens, the largest stakeholder in Infineon, sold all of its shares for a whopping $1.4 billion. Insider trading issues not withstanding, Infineon is now splitting itself.
The new company, named Qimonda, will be taking over the DRAM business that was once under Infineon. Infineon itself will concentrate on other technologies that it says is not as volatile and unpredictable as DRAM. In the past, other memory companies have done similar things.
In the split, Qimonda will take over several manufacturing facilities related to DRAM manufacturing, including those in Dresden Germany, as well as a facility in Richmond, Virginia. Along with manufacturing facilities, Qimonda will also inherit a Infineon's stake in Taiwanese memory maker Inotera which is a joint-venture between Infineon and Nanya.
Kin Wah Loh, Qimonda's designated CEO says that the new company is confident about its position in the DRAM industry. Qimonda will become the 4th largest memory company in the world after the split with Infineon. Previously, Loh was head of Infineon's memory business. Although several bids were up for the buyout of Qimonda, both Infineon and its new CEO are confident that the new company will be profitable on its own.
In Chinese, Qi roughly translates to "life force", and Monda is Latin for "world."
This article is over a month old, voting and posting comments is disabled
spin off != get out
4/2/2006 4:01:36 PM
Infineon Gets Out of DRAM Business. The title is misleading. A more correct title would be "Infineon Spins off its DRAM Business."
RE: spin off != get out
4/3/2006 2:19:48 PM
no, to spin off means exactly that - they are getting rid of there dram business.
RE: spin off != get out
4/4/2006 3:25:39 PM
Well, a company can get out of certain type of business by selling its equipment and other assets – and not necessarily by creating a subsidiary and later selling it.
“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads
Elpida Guilty of DRAM Price Fixing
January 30, 2006, 6:11 PM
LinkNYC Terminals to Blanket New York City With Free WiFi, Free Calls, and Ads
November 17, 2014, 6:50 PM
Microsoft is Open-Sourcing Most of .NET, Adding OS X and Linux Support
November 12, 2014, 8:27 PM
Home Depot Lost 53 Million Emails, Blames Windows, Buys Execs New Macs
November 9, 2014, 5:00 PM
Former NSA Lawyer: If Google, Apple Encrypt User Data, They’ll Wither on the Vine Like Blackberry
November 6, 2014, 12:15 PM
Report: AT&T Eyeing $40B DirecTV Purchase
May 1, 2014, 8:00 AM
WebOS Class Action Settlement Costs HP $57 Million
April 1, 2014, 10:22 AM
Most Popular Articles
Under the Hood: How DirectX 11.3 and 12 Will Supercharge Windows 10 Gaming
January 23, 2015, 12:34 PM
2016 Cadillac CTS-V Packs 640 hp Punch with 200 mph Reach
January 23, 2015, 3:25 PM
Microsoft Shows Off Latest Windows 10 Build, Preps it for Next Week Release
January 21, 2015, 2:57 PM
Google Fixes Homophobic "Bug" in its Translator
January 27, 2015, 2:31 PM
Will Google Become America's Fifth Major Carrier?
January 22, 2015, 12:42 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information