Infineon Technologies A.G. said Tuesday that despite increased revenue, losses widened in its fiscal second quarter, dragged down by a "strong price decline" in its high-volume memory chips.
The German chipmaker registered a net loss of $357 million, up sharply from $43.6 million in the previous quarter and $117.7 million during the same period last year. The loss includes a charge of $112.2 million for tax expenses in previous quarters and $58.8 million related to inventory write downs, non-recurring license income, restructuring charges and acquisition-related expenditures.
Revenues were $1.61 billion, up 3 percent sequentially and 13 percent year-on-year.
"Infineon significantly improved productivity, particularly for memory products, and is well ahead of schedule in ramping-up its 300mm facility in Dresden which has reached more than 6,000 wafer starts per week," said Ulrich Schumacher, president and CEO of Infineon. "However, these achievements could not compensate for the strong price decline for memory products."
Total revenues for the first half of fiscal year 2003 were $3.19 billion, up 28 percent from $2.48 billion in the same period last year. Net loss amounted to $401 million, compared to a net loss of $478.5 million year-on-year.
With its memory business still lagging, Infineon pointed to its automotive and industrial segment as a counter balance. The group's second quarter revenues hit an all-time high of $385 million, a 6 percent sequential increase and up 18 percent year-on-year.
In the current quarter, Infineon said it is seeing a pick up in demand for memory chips from OEMs. But that could be short-lived. "The current tough global economic environment and the international uncertainties do not allow for much market visibility," Schumacher said.
The company noted that a sustained pick-up in memory products was still heavily dependent on "the beginning of the corporate replacement cycle, increased infrastructure investments, and higher MB per box sales."