By Julian Goldsmith, 13 November 2001 09:34
NEWS Infineon, Europe's second largest semiconductor maker, has reported a widening of its losses over the last two quarters as the memory chip market falters. The result highlights the plight of every company in the PC manufacturing sector, and may not bode well for Dell Computer's financial results, due on Thursday. The company stated a loss of E523m (£320m) in the fourth quarter of its fiscal year, over 50 per cent down on the previous quarter. Compared to the fourth quarter last year, the company has wiped over E10m (£6m) from its books. According to information site Bloomberg, the massive losses are due to the spiralling prices of Dynamic Random Access Memory (DRAM) chips, one of the primary building blocks in PCs. DRAM sale prices are currently about half the cost of their production. The company's outlook for the next fiscal year continues to be muted. In a statement the company said: "Market conditions for memory products remain difficult, primarily due to aggressive pricing by leading DRAM manufacturers. Although inventory levels declined towards the end of the fourth quarter, Infineon expects price pressure for memory products to continue during the next quarter." The company pledged to continue cost cutting but pointed out that it still held a strong position in the market. The CEO, Dr Ulrich Schumacher, promised to save E1bn in the next 12 months by restructuring the possible sale of ancillary business units, so that Infineon can invest in the future. Schumacher said: "Only through continued investment throughout all market cycles can we capitalise on the opportunities of any future upturn."
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