Infineon Technologies is tightening its corporate belt as the slowdown in the world economy starts to have “a severe impact” on demand in all of its target markets.
“This is leading to a decrease in revenues in its five operating segments in the first quarter 
of the 2009 fiscal year,” said Infineon.
The company expects revenues from its continuing operations in the first quarter of the 2009 fiscal year to decrease by approximately 30% compared to the prior quarter, mainly driven by revenue decreases in the automotive, wireless solutions, and industrial & multimarket segments.
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As a result the semiconductor company has reviewed policy with respect to its interests in Qimonda and Altis, the manufacturing joint venture with IBM.
In August 2007, Infineon and IBM signed an agreement to divest their respective shares in Altis through a sale to Advanced Electronic Systems AG (AES).
But Infineon has now announced that that sale could not be completed.
“Despite the fact that negotiations are ongoing with an additional party, the outcome of these negotiations is uncertain. As a result, Infineon reclassified related assets and liabilities previously classified as held-for-sale into held-and-used in the consolidated balance sheet as of September 30, 2008, resulting in net charges of €59m,” said the company.
Infineon also warned that it may not now be successful in its plan to dispose of its remaining interest in memory chip company Qimonda.
Qimonda’s exposure to the troubled memory chip market is a concern and Infineon has warned that if ongoing cost saving plans at Qimonda are not successful “in generating adequate cash or result in desired operational efficiencies and cash savings” it may be exposed to certain significant liabilities related to the Qimonda business. These include “pending antitrust and securities law claims, the potential repayment of governmental subsidies received, and employee-related contingencies,” said Infineon.
On the positive side, Infineon reported a 2% increase in revenues in the fourth quarter to €1.153bn. This was 12% up on Q3.
Infineon saw its profit in Q3 dip into loss of €220m in the fourth quarter. This included net charges of €253m, mainly in connection with the company‘s cost-reduction programme.