Qimonda cuts costs and improves productivity

MUNICH & DRESDEN, GERMANY: Memory supplier Qimonda began a reduction in wafer starts at its facility at Dresden to about one quarter of the available capacity. With this move, Qimonda is responding to the negative market developments as well as to the necessity to cut back loss making businesses and safeguard liquidity.

At the same time, Qimonda has made further progress with the development of its 46nm Buried Wordline technology and has been able to improve yields of this new manufacturing process faster than originally expected.

“We will reduce wafer starts at Dresden in order to reduce costs and safeguard liquidity. With this liquidity, we intend to expedite the development of our 46nm Buried Wordline technology, with which we can achieve market leading productivity and efficiency”, said Frank Prein, General Manager of Qimonda Dresden GmbH & Co. OHG. “The preliminary insolvency administrator and the creditors’ committee have agreed to this approach.”

The reduction of wafer starts will have no immediate effect on deliveries to customers. Unused equipment will be placed in a standby mode and can be ramped-up again at short notice. The development of the new 46nm Buried Wordline technology, which makes possible an above-average leap in productivity and offers greater energy efficiency than peer products in the market, will be expedited without any reduction.

“We are convinced that in the current situation the successful productivity improvement is the best way to convince potential investors that Qimonda has a future”, said Thomas Seifert, CFO and COO of Qimonda AG. “As soon as an investor is on board, Dresden can increase wafer starts again.”

First talks with potential investors have already been held during recent days. “However, it is still too early to make any assessment”, according to the preliminary insolvency administrator, Dr. Michael Jaffé and Kin Wah Loh, President and CEO of Qimonda AG.

A solution involving new investors must be found by end of March in order to assure the continuation of operations at Qimonda. No final decisions have yet been taken concerning the future structure of the company, including whether those of its businesses that can be continued will be held through Qimonda AG or placed in a new company owned by new investors. In the latter case, or if investors cannot be found to finance the continuation of Qimonda’s businesses, Qimonda AG would likely be liquidated.