MUNICH, Germany Infineon CEO Wolfgang Ziebart acknowledged Wednesday (April 23) that the company is in talks to sell Qimonda. However, he ruled out negotiations with private equity investors.
He added that the weak dollar makes production relocations more likely.
During a conference call following the release of its quarterly figures, Ziebart declined to discuss ongoing negotiations to sell off loss-making subsidiary Qimonda. Ziebart pointed out that the company repeatedly has said it is seeking an investor for the memory chip maker.
The company earlier pledged to reduce its share of Qimonda to below 50 percent before the 2009 annual meeting. Infineon currently holds about 77.5 percent.
Ziebart did not rule out that Qimonda's shares will be distributed as a property dividend to Infineon's shareholders. "The basis for such a move has been made by the respective resolution during our latest annual meeting," he said.
Ziebart also denied that Infineon has talked to private equity investors about a Qimonda sale. "These kind of investors are generally more interested in investments with a constant cash flow, which would make an interest in a memory chip company such as Qimonda less probable," he explained. He declined to detail discussions or identify who the company is negotiating with, saying only that Infineon is "assessing all options."
According to reports here, Infineon has talked to memory rivals Micron Technology, Elpida of Japan and South Korea's Hynix.
Against the background of continuing adverse currency exchange rates between dollar and euro, Infineon CFO Marco Schroeter said production relocations are likely. Low-wage countries like Malaysia are likely candidates. "It already proved to be very helpful to have a plant in Kulim," he said. Some power electronics production has been relocated from Infineon's Villach, Austria, plant to Kulim, Malaysia.
Ziebart did not rule out closing plants in Germany. He added there are no plans to relocate other parts of the business. "The plants in Germany (Dresden and Regensburg) have always been exposed to high competitive pressure, but they constantly improved their productivity," he said. "I assume that they will maintain that pace in the future."
He added that Qimonda's Dresden plant has plenty of orders for automotive electronics and mobile handset devices.