Thursday, July 26, 2007
Qimonda got into the red figures in the third quarter of its FY 2007 due to price drop of DRAM. The company will deal with this situation by cutting its capital spending.
Last year's net earnings of €54 million (about $74 million) turned into a loss of €218 million on sales of €740 million. In the same period 2006, the company had booked sales of €977 million.
"In the June quarter, the industry saw a sharp price decline for standard DRAM products where PC contract prices dropped almost 60 percent quarter over quarter", explained Qimonda president and CEO Kin Wah Loh. Since Qimonda's product portfolio is more diversified and the results do not depend only on the standard DRAM business, the company could limit the average selling price decline to 40 percent, Loh said.
According to the Qimonda top executive, the price level has started to improve in July. However, the company decided to cut capital spending to about €900 million for 2007, the low end of the range previously announced. For 2008, the cuttings are more significant with a limit of €650 to €700 million. The company's hiring program in the R&D sector will continue, a company spokesperson pointed out. "We are investing in research aiming to improve our productivity. This is a strategic program and we will continue to hire engineers", the spokesperson explained.
By: DocMemory
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