Infineon Technologies to sell holdings in ProMos

Infineon Technologies AG plans to sell its 30 percent stake in Taiwan's fourth-largest memory-chip maker, ProMos Technologies Inc (茂德科技), after Europe's second-largest chipmaker had a contract dispute with its partner.

The stake, which has a market value of NT$12.1 billion (US$347 million) based on yesterday's closing price on the Taiwan stock exchange, will be sold according to "market conditions," Infineon spokeswoman Kaye Lim said. A time and price for the sale hasn't been fixed, she said.

Promos shares plunged by their 7 percent daily limit today, while stock in Mosel Vitelic Inc (茂矽), Taiwan's fifth-largest computer-memory chipmaker that owns about two-fifths of ProMos, dropped by 6.5 percent. Mosel has fallen 15 percent since Infineon broke its accord with Mosel Oct. 4 and began building a US$2.2 billion chip plant with Taiwanese rival Nanya Technology Corp (南亞科技).

"The share sale will push ProMos stock down further," said Kelly Ko, who manages NT$1.7 billion in stocks at National Investment Trust Co (建弘投信) and does not own shares in ProMos. "The big issue for ProMos now is where it will get its technology."

Infineon said it ended an agreement with Mosel Vitelic to make chips at ProMos because of "repeated breaches of contract."

ProMos said it expects to benefit from ending its relationship with Infineon.