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EUR331 million in losses for Infineon 
Monday, January 21 2002
by Paula Mythen


Infineon reported EUR331 million in Q1 losses but says positive signs in the
semiconductor market are emerging. 



German-based, Infineon Technologies AG, Europe's second biggest semiconductor
maker, posted first quarter revenues of EUR1.03 billion on Monday, down five
percent sequentially and 28 percent year-on-year. The company reported a net loss
of EUR331 million for the three months to December, which improved sequentially
from a net loss of EUR523 million, but down from net income of EUR280 million
year-on-year. 



The company said revenues decreased primarily as a result of a continued
difficult market environment for the semiconductor industry, in particular for
wireline communications and chip card ICs. However, the quarter also saw some
positive signs in demand for mobile communication products with the Wireless
Solutions unit posting a 15 percent increase in revenue to EUR206 million. The
Memory Products group within Infineon also showed signs of recovery, increasing
18 percent sequentially to EUR285 million. 



The world's fourth-largest producer of computer memory chips said it had been hit
particularly hard as prices for dynamic random access memory (DRAM) chips have
sunk well below the cost of producing them. 



EBIT (earnings before interest and taxes) amounted to a loss of EUR564 million.
Net loss amounted to EUR331 million, a sequential improvement from a loss of
EUR523 million in the previous quarter but down from net income of EUR280 million
year-on-year. Loss per share for the first quarter was EUR0.48 compared with a
loss per share of EUR0.76 in the previous quarter and with earnings per share of
EUR0.45 in the first quarter of the last fiscal year. 



"Infineon's revenue performance was driven by continued strong demand in memory
products as well as a moderate recovery of demand in mobile communication," said
Dr. Ulrich Schumacher, president and chief executive officer of Infineon
Technologies AG. Revenues outside Europe constituted 49 percent of total revenues
in quarter. 



The company says the market outlook in the next six months still remains
uncertain and although there are some early positive signs of increasing demand
in certain segments, there is as yet no clear signals for a sustainable overall
market recovery. 



Last year the Infineon announced plans to cut its global workforce by 5,000 and
as of 31 December 2001 it employed approximately 30,700 worldwide.  The company
employs 10 at its Dublin base. In December the business abandoned talks with
Toshiba on potential cooperation in the memory segment.