SONOMA, Calif. Allaying recent rumors about plans to spin off its memory unit, Infineon Technologies AG defended the business despite a lackluster outllook for the sector.
With DRAMs showing only single-digit market growth while demanding large capital expenditures, critics have questioned the wisdom of continuing to particpate in the cut-throat sector.
Robert LeFort, president of Infineon North America, defended the chip maker's continued presence in the market. "Memories remain the test bed for all our processes. It creates synergies for everything we do."
With many large companies increasingly spinning out or partitioning their semiconductor operations, LeFort's comments may stifle industry speculation that Infineon is interested in spinning off its capital-intensive memory business.
LeFort's remarks at an Infineon event here on Monday (Aug. 29) follow a presentation by Bryan Lewis, vice president for semiconductor research at Gartner Dataquest (San Jose), suggesting that prices wil continue to slide through 2007 due to a likely oversupply of memories.
Memories accounted for roughly 40 percent of Infineon's $8.93 billion in fiscal 2004 revenues. The company also supplies processors and sensor interface components for automotive applications, where it is the largest supplier in Europe. Infineon (Munich, Germany) remains a devoted communications infrastructure supplier with many analog line card and DSL components as well as highly-integrated chip sets for smart phones.
But Infineon's business also includes security chips and smart cards which, like memories, depend on ultra-high volumes with comparatively low average selling prices.
Of the various markets in which Infineon competes, Dataquest's Lewis sees automotive as the fastest growing (with an 8.8 percent CAGR), followed by communications (8.2 percent CAGR) and consumer (7.1 percent).