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Electronics Production | April 22, 2008

Qimonda to cut 10% of its workforce

As part of its cost reduction scheme, Qimonda plans to reduce its global workforce. Additional to that, Infineon announced that it takes the next step in preparation for the planned disposal and resulting deconsolidation of its investment in Qimonda.
Qimonda plans to reduce its global workforce by 10% states the financial report for Q2/08. Additionally, the company plans cut other recurring costs, such as a reduction in non-volatile memory development to basic research activities. This means that the agreement with Macronix will be terminated.

Qimonda expects to realise the targeted €180 million savings in full starting in FY 2009 and to accrue any restructuring charges relating to this program by the end of FY 2008.

Since the beginning of the market downturn in 2007, Qimonda has cut capital expenditures approximately by half, completely phased out less productive 200mm foundries and reduced 300mm foundry capacities.

Qimonda unaffected by Infineon write-down

As of March 31, 2008, the assets and liabilities of Qimonda are being reclassified into “Assets Held for Sale” in the consolidated balance sheet of Infineon. Following this reclassification, and in contemplation of its planned deconsolidation, the carrying amount of the investment in Qimonda was reduced to its market value determined on a held-for-sale basis. The accounting by Infineon for its investment in Qimonda has no direct impact on Qimonda’s financial reporting.

Independent of Infineon’s reclassification of its investment in Qimonda to “Assets Held for Sale”, Qimonda has, in accordance with the accounting principles applicable to it, assessed its own assets for recoverability of their carrying values.

This assessment is based on the expected future use of the company’s assets in its continuing operations and, among other factors, considers medium term developments and expectations in Qimonda’s business. Based on the analysis performed, Qimonda concluded that the carrying amount of its pre-existing goodwill is impaired and determined that all of its tangible and remaining intangible assets are not impaired. As a result, Qimonda will write off goodwill and charge other operating expense in the total amount of Euro 61 million as of March 31, 2008.
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November 15 2018 5:25 pm V11.9.0-1