Infineon is reported to be preparing to cut 3,000 jobs after losing $930m in Q2, principally due to losses at its DRAM manufacturing subsidiary Qimonda.
Infineon launched Qimonda on the New York Stock Exchange as a separate company two years ago, in July 2006, but has retained a 77.5 per cent stake in the company.
Wolfgang Ziebart, CEO of Infineon for four years until he handed over to Peter Bauer in June 2008, had been pressed to dispose of Infineon's remaining stake in Qimonda to end Infineon's exposure to the dramatic fluctuations of the DRAM market.
But the right deal never materialised, and the problem has now been passed to Ziebart's successor, Bauer.
Infineon has had great success in the wireless chip market, despite competing with the likes of Qualcomm and Texas Instruments, and won the baseband processor design win in Apple's 3G iPhone.
Infineon has also had notable success in the automotive chip market where it is the world No.2 player after Freescale.
Rumours have been swirling around Infineon that the private-equity owned semiconductor companies NXP and Freescale may be preparing plans for a takeover with the collusion of Infineon's supervisory board.
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