Sun, Feb 22, 2009 - Page 11 News List

Qimonda Richmond files for bankruptcy protection in US

PRICE DROPS Qimonda North America Corp also filed for bankruptcy on Friday after Qimonda AG filed for bankruptcy in Europe on Jan. 23


Qimonda Richmond LLC, a US semiconductor-making unit of Infineon Technologies AG, filed for bankruptcy protection from creditors, blaming the drop in global demand for computer chips.

The company, based in Sandston, Virginia, listed more than US$1 billion in both assets and debt in Chapter 11 documents filed on Friday in US Bankruptcy Court in Wilmington, Delaware. Qimonda North America Corp also filed for bankruptcy on Friday, court papers showed.

Qimonda is an affiliate of Qimonda AG, which is also a unit of Infineon. Qimonda AG, which primarily makes dynamic random access memory, or DRAM, for personal computers, filed for protection from creditors on Jan. 23 in Europe after failing to get sufficient financing following losses on memory-chip prices that have dropped below production costs.

Qimonda Richmond said it was forced to file for bankruptcy after its parent Qimonda AG filed for insolvency. The company said Qimonda AG stopped buying its inventory, resulting in a lack of funds to continue operations, court documents said.

“Toward the end of March 2007, prices for DRAM products fell precipitously,” Qimonda North America chief financial officer Miriam Martinez said in court filings.

The drop was a result of weak seasonal demand, coupled with computer manufacturers stockpiling inventory in anticipation of the release of Microsoft Corp’s Windows Vista operating system.

Average DRAM prices plummeted 85 percent in 2007 and fell an additional 58 percent last year, Martinez said in court papers, citing the market research firm DRAMeXchange.

Qimonda said it plans to “locate a purchaser expeditiously” for substantially all of its assets. The company will finance operations with about US$10.3 million in cash while in bankruptcy, court papers showed.

In related news, Spansion Inc, the money-losing maker of memory chips for mobile phones, said it failed to make an interest payment on US$266 million of bonds, which it now must repay in full.

Spansion first missed a payment on the notes on Jan. 15, and then failed to make good by the 30-day “cure” deadline, the Sunnyvale, California-based company said in a regulatory filing on Friday.

Spansion’s Japanese subsidiary filed for bankruptcy protection earlier this month. The parent company is in talks with holders of US$625 million of bonds due in 2013 about restructuring the debt and a possible sale or merger.

Spansion is the world’s largest producer of NOR flash, once the most common type of memory chip used in mobile phones before handset makers turned to cheaper NAND flash chips manufactured by Samsung Electronics Co and Toshiba Corp.

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