Siemens Semiconductor has lost about $700 million (1 billion DM) so far this year in the dynamic RAM (DRAM) price crash, according to company memos related to an earlier disclosure by Heinrich Von Pierer, president of parent company Siemens AG, that the fate of the company's chip operation was under serious study. A Siemens representative confirmed the huge semiconductor loss in the first three quarters, ended June 30.
Von Pierer touched off speculation that Siemens might close some fabs or sell off its memory operation in his public statement that the semiconductor group was included among money-losing divisions that were candidates for major restructuring.
Ulrich Schumacher, president of Siemens Semiconductor, reportedly said in a memo to employees this week there were no immediate plans to divest any parts of the chip operation. He told workers the situation was being studied closely, and any decisions would be made later in the year.
Von Pierer's comments spelled out immediate steps being taken in the DRAM operation: accelerating the end of profit-draining 16-megabit production to next year, increasing the portion of logic-chip output, and boosting fab productivity. Sources said most DRAM competitors have embarked on the same strategy, and were uncertain how effective the measures would be to cut the very large Siemens DRAM losses.