Infineon Technologies A.G. today announced a workforce reduction of 900 jobs due to "the continuing tense market situation."
The German chipmaker said there would be further job cuts through the transfer or outsourcing of some work.
The layoffs include 500 employees in various corporate functions and 150 in the Secure Mobile Solutions group.
After the reductions, Infineon will have a worldwide workforce of 30,300, a spokesman said.
The company also confirmed persistent reports that it is examining the "financial benefits" of relocating corporate headquarters outside Germany.
Infineon said it is looking at various sites in the United States, Europe, and Asia, and specifically mentioned Switzerland as one possible location.
Separately, Infineon said its Automotive and Industrial Electronics group will be shifted from Munich to Villach, Austria.
The move is being made to bring the group into closer proximity with the company's Austrian R&D facilities and production.
Infineon also announced that volume production of DRAMs using 0.11-micron process technology has started at the company's 200mm-wafer fabs and will also ramp up at its 300mm fab in Dresden.
The first product being made on the 0.11-micron process is a 256Mbit DRAM. Infineon said the latest die shrink will bring a production cost savings of about 30% over 0.14-micron processing.