MUNICH, Germany After the spin-off of the company's memory division, Infineon CEO Wolfgang Ziebart intends to intensify the application orientation of the remaining part of the semiconductor company. At the same time, Ziebart again justified the memory carve-out.
During a press conference Thursday (Sept. 28), the manager explained the company's strategic positioning. The spin-off of Infineon's memory section as Qimonda was the right decision, Ziebart said. "If a business is different in character, I think it should be separated."
"The Qimonda IPO took place in a tough time but the share price development shows that the market esteems Qimonda", Ziebart said. Since the IPO, Qimonda shares climbed about 20 percent. Infineon still owns 86 percent of the Qimonda shares.
Ziebart explained how the company's Dresden facilities, formerly owned exclusively by Infineon, now are divided by the two companies. According to Ziebart, Qimonda now owns the Dresden 300mm fab as well as Infineon's share of the Center for Nanoelectronic Technologies (CNT) the company ran together with AMD and Fraunhofer Gesellschaft. Also the Dresden mask center, a joint venture of Infineon with AMD and Toppan Photomasks, has been handed over to Qimonda, he said.
The company's 200-mm production line which presently is used at about equal shares for memory and logic chip production will remain with Infineon and gradually converted to a pure logic manufacturing line.
With the Qimonda spin-off, Infineon slipped in the semiconductor industry ranking. While the combined entity was the sixth largest semiconductor manufacturer worldwide, the "New Infineon", as Ziebart called it, now ranks 11th; Qimonda is on place 18.
The change in ranking will not have any negative consequences for the company, Ziebart hopes. "We are far beyond the critical size for the semiconductor business", Ziebart explained. "If one is beyond this threshold, it becomes much more important to focus on a certain business segment. The main driver for the 'economies of scale' is engineering expertise, not the sheer size."
While the memory business is process-centric, the logic business - which, by Infineon's definition, includes analog and power electronics - is customer-centric, Ziebart explained. "In the analog / mixed signal business, design is much closer connected to manufacturing than in the purely memory business", he said. For this part of the business, Infineon intents to keep running own fabs and investing in process development. For products that are purely digital like microcontrollers, the company will rely on foundry services. "This gives us more flexibility and helps us to avoid costly investments into fabs", Ziebart explained.
Automotive electronics will be one of the most important market segments to Infineon. Especially in the emerging hybrid drive technology Ziebart sees many business opportunities, since in this market segment, digital controls are as important as power electronics. Ziebart regards both areas as central to Infineon's competency spectrum. In this context, the company's newest power devices fab in Kulim, Malaysia, has a strategic part. "We have first customer product now, five months ahead of schedule", Ziebart rejoiced.
The revenue achieved through future Qimonda share sales will probably be used for investments in new developments in the areas of energy efficiency, mobility, safety and security, Ziebart explained, with security products being presently one of Infineon's remaining problem children because it was not possible to stop margin erosion, even though Infineon's market share of 35 percent is bigger than the next two competitors combined. "But this business is more than chip cards. It includes devices for digital rights management (DRM) and trusted module platform modules", Ziebart said.
The other problem child is the baseband chip area - especially now, after BenQ Mobile as one of Infineon's largest customers has filed insolvency. Nevertheless Ziebart downplayed the significance of the bad news, saying that the company already has succeeded in attracting new customers. "With BenQ Mobile we achieved less than 5 percent of our sales", Ziebart said. But wasn't BenQ Mobile Infineon's largest single wireless customer? "No", Ziebart said, "this is Nokia".