The company also announced plans to reduce costs and restructure

Nov 28, 2008 10:07 GMT  ·  By

Qimonda has recently announced that the sale of its Inotera stake to Micron had been completed, as well as the receipt of the second tranche of $200 million in cash. Back in October, Qimonda and Micron inked an agreement through which Micron was to purchase Qimonda's shares in Inotera for $400 million in cash in two tranches, and Qimonda received the first installment of $200. All the customary closing conditions and requisite governmental approvals have been fulfilled and the sale transaction completed.

Qimonda announced a one time non-cash effective book loss of around 300 million Euros ($386.78 million) in the fourth quarter of this fiscal year in connection with the transaction. The agreement also states that Qimonda's purchase of Inotera's output capacity is to be ramped down over an eight-month period following the closing.

The completion of the sale transaction also puts an end to the development agreement between Qimonda and Nanya Technology regarding the 58nm trench technology. Currently, Qimonda is on the way to converting from its 75nm technology directly to its proprietary 65nm Buried Wordline technology. Moreover, the company also plans to release a next-generation 46nm Buried Wordline technology in mid-2009.

“The sale of our stake in Inotera is an important component of our restructuring program, providing us with a cash influx to support our restructuring and productivity improvement measures,” said Kin Wah Loh, CEO of Qimonda. “In addition, the ramp down of Inotera reduces exposure to the PC market and related cash burn.”

Qimonda announced in October a cost reduction program and plans to restructure the company by concentrating on core strengths in Buried Wordline technology as well as infrastructure and graphics products. The company announced that it plans ramping down manufacturing at its 200mm facility in Richmond, US by January 2009 as well as at its backend component and module manufacturing in Dresden, Germany by the end of March 2009. At the same time, Qimonda will work on consolidating its product R&D in Munich and Xian, and closing its design activities in Raleigh, US by January 2009. In addition, it counts on diminishing administrative resources and costs to reflect the focused product portfolio and reduced production capacities.