The latest rumour to come out of the rumour-laden Infineon is that the supervisory board is discussing a merger with both NXP and Freescale.

Previous rumours were of a clash between the supervisory board and the management board led by Wolfgang Ziebart, and speculating that Ziebart would resign next week.

The new rumours say the supervisory board chairman Max Dietrich Kley is talking to NXP and Freescale, but that the management board are opposed to both proposed mergers.

Both NXP and Freescale are owned by private equity consortia. NXP by a consortium led by Kohlberg Kravis and Roberts (KKR), and Freescale by a consortium led by Blackstone.

The private equity funds have imposed debts of $6bn on NXP and $17.6bn on Freescale.

Both consortia have written down the value of their investments in NXP and Freescale to below the acquisition values.

Whether either of the consortia can afford to raise the money to buy Infineon in the current credit climate is unknown. But banks being asked to put up the money will no doubt ask why previously un-performing semiconductor investments should now be repeated and extended.

Furthermore mergers in the semiconductor industry rarely succeed. As Ray Bingham, former CEO of Cadence and now partner at Atlantic Capital told IEF2008 earlier this month: "The consolidation of two companies is like the collision of two garbage trucks. You get a lot of stuff on the road, but you don't necessarily get any organized pattern that can take you anywhere."

Scott McGregor, CEO of Broadcom, who does a lot of buy-outs, says that more take-overs destroy shareholder value than create it.

The relationship between the supervisory board and management board at Infineon has a chequered history. The supervisory board got heavily involved in the Machiavellian manoeuvres to oust Ziebart's predecessor, Dr Ulrich Schumacher.

The supervisory board now seems to be trying to impose new directions on Infineon by heavy leaking to the German media.

See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.