MUNICH, Germany Struggling DRAM vendor Qimonda has filed insolvency at a Munich court. The bail-out negotiations on a financing package could not be completed in time, the company said.
The move does not come unexpected after the negotiations with the Saxon and German federal government apparently have stalled in the past days. During these talks, the manufacturer had claimed additional fundings of 300 million (about $166 million) necessary to uphold its business activities. This amount would have been on top of the sum discussed before, and sources close to the governments declined to meet the additional demand. Since the bail-out sum promised by the German, the Saxon and the Portuguese government has not been paid yet, the situation for the company with major sites in Munich and Dresden as well as Porto (Portugal) aggravated daily. Insolvency is a matter of days, not weeks, was the rumor yesterday (January 22).
According to sources, the activities of the company had increasingly been paralyzed over the week since the company's backend facility in Porto as well other parts of the value chain in China have have stopped deliveries.
Past October, the company had announced major job cuts as part of a restructuring program. Now there are many more jobs at stake. The company currently has a headcount of about 12.000. The goal of the company within the insolvency proceedings will be to reorganize the parent company in Munich and the Dresden subsidiary as part of the ongoing restructuring process.
As a first step within the insolvency proceedings, the court will appoint a preliminary insolvency administrator. "We assume we will be able to continue our business within the context of our restructuring program with the support of the temporary insolvency administrator", explained Qimonda CEO Kin Wah Loh in a press release. He pointed out that the company's restructuring is on track with the sale of its stake in Inotera past November, the ramp down of its 200-mm production in the USA.
The Qimonda management still hopes to find investors to continue its buried wordline technology which the company claims to bring down production costs to a competitive level.