MUNICH--Hammered by lower DRAM prices, Infineon Technologies AG here today reported a 30% sequential drop in revenues to 1.66 billion euros ($1.53 billion) in the company's fiscal first quarter, ended Dec. 31, compared to 2.38 billion euros ($2.19 billion) in the prior three-month period. Compared to a year ago, Infineon's revenues were up 8% from 1.54 billion euros.
Infineon, the former semiconductor unit of Siemens AG, said its memory revenues sank 61% sequentially in the final three months of 2000, compared to the previous quarter. Memory sales were just 497 million euros ($457 million) vs. 1.27 billion euros ($1.17 billion) in the quarter, ended Sept. 30. Compared to a year ago, Infineon's memory revenues dropped 26% from 668 million euros ($615 million) in the fiscal first quarter, ended Dec. 31, 1999.
Outside of memory products--dominated by DRAMs--Infineon's chip sales rose 5% sequentially to 1.13 billion euros ($1.04 billion) from 1.08 billion euros ($995 million) in the prior quarter, ended Set. 30. Infineon's non-memory products--in communications, automotive, industrial and other applications--grew 33% from 851 million euros ($783 million) in the fiscal quarter, ended Dec. 31, 1999.
The German chip maker posted a net income of 280 million euros ($258 million) in the last fiscal quarter compared to 581 million euros ($535 million) in the prior quarter, ended Sept. 30, and 133 million euros ($122 million) in the quarter a year ago.
Infineon said it believes it will see strong front in wireless handset chip sales and other non-memory segments in 2001. The company said DRAM markets will continue to experience a "difficult" quarter in the current fiscal period, ending March 30. Infineon said it currently expects the DRAM outlook for the entire year to remain positive with a recovery in the second half of 2001.
The company continues to shift its business from being heavily dependent upon DRAMs. The wild swing in Infineon's memory business caused the segment to fall from 53% of the company's revenues in the previous quarter to just 28% in the final three months of 2000. During an interview two months ago, Infineon managers said they were aiming to keep DRAMs in a 30-40% range of the company's total revenues.
"Infineon has delivered on its promise to improve margins in its non-DRAM business," said Ulrich Schumacher, president and CEO of the Munich company. "We have successfully shifted our product mix towards higher margins, especially in our wireline communications and smart card businesses," said the chief executive today while releasing the quarterly results.
"We have also strengthened our customer partnerships in our key segments and significantly improved the utilization of our global distribution channels," said Schumacher, referring to Infineon's first worldwide semiconductor distribution agreement with U.S.-based Avent Inc. (see Nov. 22 story).
In the last quarter, Infineon's wireline communications chip sales grew 6% to 211 million euros from 199 million euros. The company's wireless chip revenues were up 2% sequentially to 358 million euros from 351 million euros in the prior quarter. Automotive and industrial chip sales were flat at 254 million euros in the quarter, ended Dec. 31.