Infineon cops unexpected loss
Anti-trust provision eats into profits
Europe's second-largest chipmaker, Infineon, has posted an unexpected loss after making provisions for a US anti-trust lawsuit that targets memory chip makers.
The Munich-based company said that in its fiscal third quarter, its net loss came to €56m, or €0.08 a share, compared to €116m, or €0.16 a share, in the same period a year ago. Analysts had been expecting the firm to post a profit, but the €212m it decided to stash away in the event that a US anti-trust investigation turns the wrong way pushed the company into the red.
The firm said that sales in the June-ending quarter were up by about 30 per cent over a year earlier to €1.91bn, just ahead of forecasts. The company's results also showed that the German chipmaker would have posted a €107m profit had it not been for the exceptional anti-trust-related provision.
For over two years, the US Justice Department has been seeking to determine if the four chipmakers that produce about two-thirds of the world's memory (DRAM) chips conspired to manipulate prices of their products. The firms involved are Micron Technology, Samsung Electronics, Hynix Semiconductor and Infineon.
Despite the looming cloud of the US government investigation, the company was upbeat about the future of the sector, claiming that its own sales will rise in the current quarter thanks to rising prices of DRAM, which are mainly used in personal computers. Some two-thirds of Infineon's sales come from its memory chips unit, making the company highly susceptible to even the smallest shifts in chip pricing.
"The worldwide semiconductor market has gained considerable momentum during the last three months," said Max Dietrich Kley, acting CEO of Infineon Technologies, who will be replaced by Wolfgang Ziebart next year. "We were able to take advantage of this development which is reflected in our improved financial results, excluding the effect of the anti-trust accrual."
Kley also noted that during the third quarter the firm initiated a number of R&D projects and also invested in its production facilities, moves that should help the company improve its productivity. "Thus, we have paved the way for Infineon's plans to deliver profitable growth," he said.
Just over a year ago, Infineon said that it had received IDA backing to open a new customer support service centre in Dublin. The chipmaker's other business in Ireland is Guardeonic Solutions, a software company specialising in security products that employs about 40 people.