We all know that the DRAM market it fluctuating very much. The prices rise and drop very quickly, not allowing predictions to be made. The bigger the company, the bigger the problems.
DRAM companies ranging from Elpida, Hynix, Infineon, Micron, Samsung and several others have been accused of DRAM price fixing, where companies agreed to a price for the DRAM memories. Of course that practices don’t go unnoticed.
Previously, Infineon was given a fine of $300 million for its illegal business activities – a miniscule amount compared to the $24 billion industry that Infineon was in. However, according to financial reports, Infineon previously made $150 million of net profit on $3.2 billion in sales revenue. Considering its actions, losing roughly two year’s worth of net income for questionable business tactics is just not worth it.
Infineon’s jump out of the DRAM business was not a surprise. Besides the accusations of its price fixing, Infineon was also in a drawn out court battle with DRAM IP company Rambus. After roughly $5 million of legal expenses, Infineon agreed to settle with Rambus. Later, Infineon took Rambus back into court with claims that Rambus had destroyed important documents. The courts tossed Infineon’s claims and dismissed the case as unsubstantial. Just last week, Siemens, the largest stakeholder in Infineon, sold all of its shares for $1.4 billion.
The new company, named Qimonda, will be taking over the DRAM business that was once under Infineon. Infineon itself will concentrate on other technologies that it says is not as volatile and unpredictable as DRAM. In the past, other memory companies have done similar things.
Kin Wah Loh, Qimonda’s designated CEO says that the new company is confident about its position in the DRAM industry. Qimonda will become the 4th largest memory company in the world after the split with Infineon. Previously, Loh was head of Infineon’s memory business. Although several bids were up for the buyout of Qimonda, both Infineon and its new CEO are confident that the new company will be profitable on its own.
Waiting to see where all this will lead.