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Qimonda files for bankruptcy as refinancing deal not completed in time
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DRAM memory manufacturer Qimonda AG has filed for temporary banckruptcy at the local court in Munich, Germany after negotiations for rasing new funds with the Saxony Government, an unidentified Portuguese financial institution and various banks were not completed in time for the company to start insolvency proceedings and protect itself from creditors. Qimonda is the first DRAM manufacturer to enter bankruptcy as a result of a major overcapacity in the industry and long-term losses.
"German insolvency law offers the opportunity to accelerate the restructuring process that has already been started in order to reposition the company back onto a solid base," said Kin Wah Loh, President and Chief Executive Officer of Qimonda AG.
Qimonda noted that it needed more financing than previously thought due to further DRAM price declines seen in December of 2008. Due to the comany's current financial situation, they will not be able to proceed with planned productivity improvements.
"We assume we will be able to continue our business within the context of our restructuring program with the support of the temporary insolvency administrator and our employees," Loh said. "We are especially counting on the excellent relationships with our customers and suppliers, with whom we have made significant progress in developing our Buried Wordline technology during the last months."
Concern has also mounted in recent weeks on the viability of ProMOS Technologies, which has struggled to raise finances to repay US$300 million in corporate bonds due on February 14, 2009. The Taiwan Government has promised financial support mechanisms to the entire struggling DRAM industry in the country but must meet set criteria such as consolidation and technology IP independence of sorts before assistance can be given.
Many DRAM manufacturers are now entering the second year of sequential losses and are finding it almost impossible to refinance amidst the current credit crisis and global economic downturn.