Infineon Chokes On €240 Million Loss
By John Stith
Staff Writer
Article Date: 2005-07-26
Infineon Technologies added padding to their losses in the third quarter to the tune of €240 million. This hit more than doubled its losses of €114 million from the previous quarter.
Revenues of €1.61 billion in the third quarter were stronger than the previous quarter and certainly much more stable but not what they needed. Infineon had planned a return to profitability during this quarter but the semiconductor maker had to revise its forecast back in April.
"We have made good progress in our corporate restructuring. However, in the third quarter we have seen adverse effects on memory products and security and chip-card ICs as well as at some of our baseband customers," said Dr. Wolfgang Ziebart, CEO and President of Infineon Technologies AG. "In spite of this, we expect an improved fourth quarter compared to the third quarter."
Ziebart said the primary reason for the increase is the closing of an outdated factory. The factory in Munich generated one time costs that drove up the losses. Also prices dropped on computer-memory chips, which are the main product for Infineon. The prices dropped much more and much faster than Infineon was expecting, hence the profit losses.
Infineon's return to profitability will come in the fourth quarter because the company expects an increase in per system memory loads and worldwide demand. They also expect moderate growth of supply due to high capacity shifts their quarterly statement said.
About the Author:
John Stith is a staff writer for WebProNews covering technology and business.
