See also: The Bail-Out Wheeze - from the Mannerisms blog
Qimonda is taking advantage of the new economic opportunities to apply to the Federal Government of Germany for a bail-out, according to the Sueddeutsche Zeitung newspaper.
Germany has announced that it has set up a €500bn bail-out fund for its financial sector, and is also considering help for the automotive industry, so Qimonda may be able to tap into that interventionist approach from the federal government.
There is also said to be a possibility of support from the German State of Saxony, which has been active in supporting the microelectronics industry in Saxony with financial help for Infineon and AMD among others.
Qimonda has a fab in Dresden, in Saxony, which employs several thousand people. The suggestion is that Qimonda should issue more shares and sell them to the state of Saxony. Potentially, Qimonda could become the first nationalized DRAM company.
In addition, the EU's new Euros 200bn stimulus package, announced yesterday, might also be a source of funds for Qimonda.
Infineon sold 20 per cent of Qimonda on the New York Stock Exchange in July 2006 for about $500m, valuing at Qimonda at $2.5bn. At the time, with IPOs being regularly pulled, it was seen as a poor price.
In retrospect, after a prolonged period of low DRAM prices, it looks like an exceptionally good price. Many analysts have suggested that Infineon should simply close down Qimonda to stop Infineon's exposure to Qimonda's losses.
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.