Qimonda plans Singapore memory chip investment

Qimonda AG, the memory chip unit of Infineon Technologies AG, plans to invest 2 billion euros (US$2.7 billion) over five years in its plant in Singapore to increase capacity, cut costs and expand in Asia.

"We aim to expand in the region and we aim to move closer to our Asian customers," chief executive Loh Kin Wah (羅建華) said in a telephone interview yesterday. "The new plant will also help to cut costs and to reduce our exposure to exchange rate fluctuations compared to the US dollar."

Qimonda is the world's largest memory-chip maker after South Korea's Samsung Electronics Co.

The factory, to open in 2009, will make memory chips for video games, mobile phones and music players. The company sees more growth potential in those products than in the PC business, Loh said.

The company said last month it would spend 400 million euros to build a plant in Malaysia and double capacity at its Chinese facility to increase supply. Qimonda doesn't plan to cut jobs at its existing plants in Germany and the US following the increased Asian investments, Loh said.

Qimonda said yesterday net income in the three months through last month was 57 million euros, compared with a loss of 9 million euros a year earlier. Fiscal second-quarter revenue rose 6 percent to 984 million euros. Earnings before interest and tax rose to 85 million euros compared with 21 million euros a year earlier.

Compared with the fiscal first quarter, sales and profit declined in the second quarter because of falling prices.

In the current fiscal third quarter, Qimonda said production may increase by about 8 percent to 12 percent. For the fiscal year, the company expects to increase production between 60 percent and 70 percent, compared with an earlier forecast of 55 percent to 65 percent.

Qimonda also said yesterday it reached an agreement with SanDisk Corp, the world's largest maker of flash-memory cards, to create a Portugal-based venture to jointly develop and manufacture semiconductors for mobile phones. Loh declined to give financial details of the agreement.