Qimonda Faces Q1 Cash Crunch, Delays Financial Results

Qimonda AG will face a shortfall of cash in the first three months of next year unless it finds new investors, a strategic partner, or the DRAM industry takes a turn for the better, the company said in a statement Monday.

The German DRAM maker also said it will delay its financial results for the quarter and fiscal year ending Sept. 30 until mid-December as it continues to talk with investors. Qimonda was originally scheduled to release the results Dec. 1.

The company said it expects to announce sales of €476 million (US$604.4 million) for the fourth quarter of its 2008 financial year, which ended Sept. 30. The figure is 24 percent higher than third quarter sales at the company, but Qimonda said its gross margin remained negative and that its fourth quarter net loss was more than the €401 million lost in the third quarter.

The company had just €432 million in cash remaining as of Sept. 30.

DRAM prices started tumbling late last year amid a glut, turning most DRAM makers into money losers. Chip prices remain low and have hit new record lows week by week.

The global credit crunch has worsened the situation for DRAM companies by making loans harder to come by. DRAM makers need billions of dollars to build new chip factories and upgrade existing chip lines to the latest technology.

Qimonda has reported a net loss of €1.48 billion over the nine months of its fiscal 2008 that ended June 30. The numbers have been even worse for Qimonda's parent company, Infineon Technologies, since it had to take charges based on the decreased value of its stake in Qimonda as well as its part in Qimonda's losses.

Infineon owns around 77.5 percent of Qimonda.

Qimonda said Monday that it is making progress in its discussions with several potential strategic and financial investors and that it may be able to announce a deal on one of these opportunities within the next few weeks.

In October, Qimonda sold its stake in a Taiwanese joint venture company to U.S. rival Micron Technology for US$400 million. The deal provided Qimonda with much needed cash, but it came at a price. Qimonda said its fourth quarter net loss includes write-downs on the deal. The chip maker invested far more in the Taiwanese venture, Inotera Memories, than the US$400 million Micron paid.