Qimonda bailout secured

THE SPUN-OFF memory arm of Infineon, Qimonda announced late Sunday that it has secured the €325 million necessary to carry on its operations and avoid bankruptcy.

Although the company is now independent, Infineon still owns about three-fourths of Qimonda's shares.

The deal follows some nasty trading of words between Infineon management and Saxony State politicos, who accused Infineon of misrepresenting Qimonda's true financial status in order to get more aid from the state. Saxony demanded Infineon share the burden. Instead, Infineon rang up the Portuguese government to back it up, and now the deal is going through.

The Saxony Free State will lend Qimonda €150 million while the Caixa Geral de Depósitos group - the incumbent banking institution in Portugal - will drop €100 million in the company's lap. The parent company Infineon will guarantee the remaining €75 million. Considering that the R&D operation in the north of Portugal employs 2,000 Qimondians while the Dresden facilities employ almost 3,200 - about half of the company's total employees - all parties have an interest in keeping the good ship Qimonda afloat.

Now, with money in the bank, Qimonda CEO Kin Wah Loh has announced the company will increase its R&D efforts and finally start fabbing memory with its 46nm Buried Wordline technology, which could double the bit capacity of each wafer and bring down overall manufacturing costs by a bundle, according to the company.

Infineon has been trying to offload Qimonda for what seems like ages now, and since the beginning of the year Qimonda's stock has been dumped as if it were carrying the black plague. It sold for $7.56 per share back in January but traded Friday on the NYSE at an all-time low of $0.25 per share. µ