Qimonda commences insolvency proceedings
Neubiberg, Germany, January 23, 2009 – Qimonda AG today filed for insolvency at the Munich Local Court. Infineon Technologies AG currently holds a 77.5 percent equity interest in Qimonda.
In December last year, Infineon, the German state of Saxony and Portugal agreed in principle on a rescue package designed to bail out Qimonda. According to this package, Saxony would make 150 million euros, Portugal 100 million euros and Infineon 75 mil-lion euros available in the form of a loan to the memory chip manufacturer.
Given the difficult overall economic situation and the further deterioration of the DRAM business in the December quarter, the negotiating parties were now unable to agree on how to put together a rescue package that would work for everyone involved. All parties’ individual positions are understandable from their respective standpoints, but they have ultimately proven irreconcilable.
“Everyone involved fought to the very end in an attempt to save Qimonda. We sincerely regret that these efforts have not ultimately succeeded in achieving the desired outcome and that Qimonda’s employees now face an uncertain future,” says Peter Bauer, spokesperson for Infineon Technologies AG’s Management Board.
Following Qimonda’s insolvency filing, Infineon may be exposed to a number of significant liabilities relating to the Qimonda business, including pending antitrust and securities law claims, potential claims for repayment of governmental subsidies received, and employee-related contingencies. We anticipate that the majority of any potential cash obligations we may have in connection with these matters would be payable – if at all – in periods after our 2009 financial year.
We intend to increase provisions in our quarterly accounts for the first quarter of fiscal 2009 for pending antitrust and securities law claims, and we anticipate creating additional provisions in connection with those potential liabilities issuing from Qimonda’s business which to us seem probable and which we can estimate at this time. We anticipate that these provisions will be in the lower three-digit million euro range.
This press release includes forward-looking statements about the future of our business. These forward-looking statements include statements relating to the resolution of Qimonda’s insolvency proceedings and the liabilities we may face as a result of Qimonda’s insolvency. These forward-looking statements are subject to a number of uncertainties, including actions by Qimonda and its creditors and other interested parties and developments in our own business, as well as the other factors described in the “Risk Factors” section of the annual report of Infineon on Form 20-F filed with the U.S. Securities and Exchange Commission on December 29, 2008. As a result, future developments could differ materially from those indicated in the forward-looking statements. Infineon does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.
Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, communications, and security. In the 2008 fiscal year (ending September), the company reported sales of Euro 4.3 billion with approximately 29,100 employees worldwide. With a global presence, Infineon operates through its subsidiaries in the U.S. from Milpitas, CA, in the Asia-Pacific region from Singapore, and in Japan from Tokyo. Infineon is listed on the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Infineon currently holds a 77.5 percent equity interest in Qimonda AG. Qimonda is separately listed on the New York Stock Exchange under the ticker symbol “QI” .