Struggling DRAM manufacturer, Qimonda AG (NYSE: QI) has secured loans totaling €325 million from the Saxony regional government (€150 million), an unidentified Portuguese ‘financial institution’ (€100 million) and parent company, Infineon Technologies (€75 million). Qimonda will also have access to a further €280 million made available under state guarantees from the Federal Republic of Germany and the Free State of Saxony. The company said that approximately €150 million of the state funds were in an advanced state of negotiation.
Qimonda chose to rap the funding around its DRAM ‘Buried Wordline’ process technology, which it is currently ramping production to reduce costs and improve its competitiveness. Qimonda has major manufacturing operations in Dresden, Germany and Porto, Portugal. The company said that the new funding would enable investments in both R&D and manufacturing in both locations.
“The financing arrangements are based on the significant potentials offered by our highly innovative Buried Wordline Technology. They allow Qimonda to complete its repositioning, ramp up this exciting technology and re-establish its competitive position in the memory industry”, said Kin Wah Loh, CEO and President of Qimonda AG. “We thank especially the Free State of Saxony, Portugal and Infineon for their trust in our innovation and execution capabilities.”
Infineon and the State of Saxony had initially failed to come to an agreement in supporting Qimonda. Saxony wanted Infineon to match it with funds of approximately €150 million.