Infineon makes a loss

Sees cloud but no silver lining...

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Lower prices and weak demand have pushed memory chip maker Infineon to a loss in the second quarter.

Revenues for the second quarter ended 31 March 2005 was €1.61bn - down 12 per cent on the quarter before or four per cent on the same period a year ago. The firm made a net loss of €114m in the second quarter against a profit of €142m sequentially.

Income for the first half of the year was €28m, compared to €73m the year before.

Infineon said weak demand from mobile phone makers, exacerbating a traditionally quiet period, coupled with declining memory prices and the settlement with ProMOS all hit profits.

for Q3, the firm "expects continued pricing pressure, especially chip-card ICs, memory and mobile phone products". It is to concentrate on cost-cutting in the third quarter and restructuring non-profitable businesses. It is closing its manufacturing plant in Munich Perlach.

In January Infineon issued a profits warning that it expected to make €211m on revenues of €1.82bn. It 36,000 people including 7,200 working in R&D.

More details on Infineon's website here. ®

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