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Infineon reduces chip size to cut costs

Infineon Technologies AG, Europe's largest semiconductor company, has started production of smaller chips as the company seeks to lower costs and catch up with competitor Samsung Electronics Co.

Infineon lowered the line width of its chips to 90 nanometers per unit from 110 nanometers, allowing it to fit an increased amount of computer memory onto one wafer, the Munich-based company said in a statement today.

The move raised chip output per wafer at the company's factory in Dresden, Germany, by more than 30 percent, Infineon said.

"The expected productivity increase by shrinking the chip size is the basis for a significant reduction of production cost per chip," Infineon said.

Infineon is lowering production costs to counter falling prices for memory chips, which account for 40 percent of total sales.

Infineon chief executive Wolfgang Ziebart in March said the firm had been too slow at implementing previous chip-size reductions because overhauling development and moving production from the US to the Dresden factory distracted the company. With the reorganization now completed, Infineon would be "significantly faster" in the future at reducing chip sizes, he said at the time.

Moving chips to the lower size, 70 nanometers, typically takes about one-and-a-half years, Infineon spokesman Guenter Gaugler said yesterday.
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