Feeds

Infineon, Toshiba merger on the rocks?

Still can't come to an agreement

  • alert
  • submit to reddit

Infineon's interest in Taiwanese memory makers is a sign that its proposed merger with Toshiba's DRAM division may now never take place, a source close to the two companies' talks claims.

Infineon and Toshiba had planned to have a draft merger agreement completed by the end of October, the source said, according to an EBN report, but that stage was never reached.

Why? Because Infineon wants Toshiba's Flash memory operation too, but the Japanese giant is unwilling to hand it over.

Infineon's insistence on preserving its healthy cash position is also impeding discussions, Ulrich Schumacher, chief executive, told the FT yesterday.

"The problem is getting a guarantee (from Toshiba) that whatever the market does in the next one and a half years will have no impact on my cash level."

Without agreement on this, merger talks are unlikely to last beyond the end of the year, he said.

The two groups have been in talks since the summer on folding their D-Ram businesses in a joint venture where Infineon would hold a large majority stake. D-Rams are commodity memory chips used mainly in personal computers.

Without a breakthrough, Mr Schumacher said the talks were unlikely to extend beyond the end of the year

Infineon's move to court a number of Taiwanese memory makers may be motivated by an acceptance that the Toshiba deal isn't going to happen. Then again, it could also be an attempt to put pressure on Toshiba to meet Infineon's demands.

Infineon wins either way. If it gets Toshiba's Flash and DRAM operations, it's happy. Equally, if it doesn't but it buys up a couple of Taiwanese players instead, it's still in a better position to capitalise on a recovery in the memory market - whenever that happens. ®

Related Infineon Stories

Infineon loss widens on DRAM slump
Infineon wants a DRAM foursome

Related DRAM Recovery Stories

DRAM bounces back (maybe)
DRAM prices rise

Related Link

EBN: Toshiba/Infineon DRAM merger fading fast

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Choosing a cloud hosting partner with confidence
Download Choosing a Cloud Hosting Provider with Confidence to learn more about cloud computing - the new opportunities and new security challenges.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.