MUNICH -- Infineon Technologies AG today described details of a previously announced initiative to save over 1 billion euros ($920 million) in costs from its semiconductor operations, including new plans to cut capital spending in half during the 2002 fiscal year, which begins Oct. 1.
Infineon said it has identified new cuts of 600 million euros ($552 million) in capital spending with the goal of reducing the existing budget of 1.5 billion euro ($1.38 billion) in half during the next 12 months. The Munich-based chip maker said the reductions in capital investments will not impact leading-edge technologies, including 300-mm wafer processing fabs.
Under the "Impact" initiative, announced in July, the company said it has already saved several hundred million euros in purchasing and logistics operations during the past two months. Infineon's information technology costs have also been sliced by one third, according to the company officials.
Two months ago, Infineon announced the Impact cost-reduction program and plans to eliminate 5,000 jobs worldwide, or about 17% of its total workforce (see July 26 story). At the time, Infineon said it was lowering capital spending in the upcoming fiscal year by more than 1 billion euros from 2.3 billion in 2001 to 1.5 billion in 2002, but additional cuts are planned as DRAM markets and other segments continue to struggle.
Details about additional moves under the Impact initiative come one day after DRAM rival Micron Technology Inc. announced it has lost $576 million on sharply lower sales of $480.3 million in the last fiscal quarter. Micron said it was planning $1 billion in capital spending during the new fiscal year, which began Aug. 31, but that total is down from $1.8 billion in the just-ended year (see Sept. 25 story).
Infineon officials said the previously announced job cuts are well underway. But the end of December, the company expects to have shed 2,400 jobs--about 500 in Germany and 1,900 in the rest of the world. Infineon said it expects only moderate restructuring costs for additional staff reductions.
The company also plans to start reduced work schedules in at its Regensburg and Munich (Perlach) plants during October.
"Infineon has a healthy balance sheet, a significant positive net cash position and available credit lines of approximately 2 billion euros," said Ulrich Schumacher, president and CEO of Infineon.
The former chip unit of Siemens AG raised 1.5 billion euros ($1.38 billion) in capital during July, and it received an additional 700 million euros ($644 million) from the sale of its infrared products division and its stake in Osram Opto Semiconductors GmbH & Co. (see Aug. 14 story).
"We have no current need or plans for further financing activities," Schumacher said.