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Infineon sees demand rise

But posts Q2 loss

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ComputerWire: IT Industry Intelligence

Infineon Technologies AG says that in the last quarter it has seen growing demand in all of its business segments, especially for memory products. However, for the second quarter to March 31, it posted a net loss of 108m euros ($95.8m) down from income of 23m euros ($20.4m) on revenue of 1.38bn euros ($1.22bn), down from 1.65bn euros ($1.46bn).

At the mid-term stage the net loss was 439m euros ($389.7m), down from income of 303m euros ($268.9m), on revenue of 2.4bn euros ($2.14bn), down from 3.3bn euros ($2.9bn). The Munich, Germany-based chipmaker said that the outlook for the next six months remains uncertain and will depend on the extent and sustainability of the world economy, particularly in Europe and the US.

Despite this, it said the consolidation process in the memory market continued, with strong demand and a normalization of inventory levels, leading to a significant increase in DRAM prices. Infineon's memory revenue increased 13% over the same period last year and 105% sequentially to reach 585m euros ($519.3m). This cut its losses before interest and taxation to 28m euros ($24.6), a huge improvement on the loss of 371m euros ($326.5m) in the previous quarter

Infineon said the prerequisites for sustained improvements in DRAM price levels is further continuation of strong demand, in particular with regard to the corporate upgrade cycle in PC and infrastructure investments, as well a further increase in megabit-per-box demand.

In its wireless solutions business, sales showed a 1% increase on the previous quarter to 208m euros ($183m), though this was 21% down on the same period last year. It expects that the recent moderate recovery of the market for mobile handsets will continue and the market for handsets to grow moderately this year, driven primarily by the introduction of GPRS.

While sales of 90m euros ($79.2m) in security and chip cards ICs were 10% up on the previous quarter, they were half the previous year's level and Infineon sees an increase in demand due to normalization of inventory levels.

Although visibility remains low, Infineon is clinging to the hope that the weakness in the wireline communications business has bottomed out. Revenue of 96m euros ($84.5m) was 58% down on the previous year's level though showed a 16% improvement on the previous quarter. It believes the broadband access market will grow modestly this year due to continued deregulation and the continued roll-out of the DSL market.

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