March 31, 2006 – Infineon Technologies AG has officially announced the spinoff of its memory chip unit as a separate entity by May 1, two months ahead of schedule. The new company, Qimonda, will initially remain a wholly-owned subsidiary of Infineon, with the clear intention to launch an IPO.

Infineon officials noted that Qimonda, among the top four DRAM producers worldwide according to recent Gartner estimates, will have access to five 300mm manufacturing sites and five major R&D facilities. A target goal of the new company is to quickly transition from 90nm to 75nm process technologies. CEO of the new firm is Kin Wah Loh, who has headed up the memory products business group since last summer.

Carving out the memory chip unit will let Infineon focus on its other stated target segments of automotive electronics, industrial electronics, and power management, chip cards and security ICs, RF technologies, and mobile and broadband communications platforms.

Earlier press reports had noted Infineon’s recent progress in getting the memory unit deal done before the original July 1 date, contrary to previous indications that the deal was progressing more slowly. The company’s eagerness to speed up the deal reportedly centers on a possible future strategy: a possible acquisition in Japan to gain a foothold in the semiconductor market serving domestic automotive manufacturers, according to a report in the Financial Times Deutschland. The paper quoted CEO Wolfgang Ziebart saying that Infineon is strong in the US and Korea but needs to “get better” in Japan, and acquiring a Japanese semiconductor supplier would be faster than trying to build domestic confidence in the German firm.