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Who's to blame for Qimonda's bankruptcy?

Posted: 28 Jan 2009     Print Version  Bookmark and Share

Keywords:DRAm maker  bail-out  price recovery  DRAM market 

As a preliminary insolvency manager begins sorting through Qimonda's books, the DRAM maker is attempting to continue production.

Meanwhile, a debate over the reasons for Qimonda's bankruptcy and the search for culprits has begun.

A Munich court appointed Michael Jaffé Jan. 23 as preliminary insolvency administrator. He announced plans to examine the situation and promised to keep the public informed.

"It is not 'business as usual', but we [will] do everything possible to maintain production and fulfil supply contracts," a company spokesperson said. He added that he was unaware of any supply bottlenecks caused by business partners nervous about not being paid, including Qimonda's own back-end facilities.

Meanwhile, the predictable finger-pointing has begun. Among the favourite culprits are Qimonda management, the Saxon regional government and Qimonda's parent company, Infineon Technologies AG. Some commentators here said Infineon should have sold Qimonda much earlier, and the company had missed an opportunity to sell its Qimonda shares to memory maker Micron Technology.

Others criticise Qimonda's management, in particular CEO Kin Wah Loh. "Loh was hiding in his office, waiting for the DRAM price recovery," one angry Qimonda worker said, referring to the fact that Loh seemed almost invisible during negotiations with the government.

For instance, a widespread press photo published during talks between the regional government and Qimonda showed Saxon Minister of Economy Thomas Jurk with Peter Fischl, chairman of Qimonda's supervisory board. The photo suggests Low was not participating in the talks in any meaningful way.

Within the company, many executives and workers claim the government is responsible for its bankruptcy. A high-ranking Qimonda employee who requested anonymity said that despite the December agreement with the Saxon government, no money was received.

"We did not see a single penny," he said.

Qimonda falls first

Is someone solely responsible for Qimonda's fate or did Qimonda just happen to be the first DRAM vendor to fall due to the weakening DRAM market?

When the news of the insolvency application was put to Andrew Norwood, a European research vice president at analyst company Gartner Inc., he said: "This is very good news for the DRAM industry," while acknowledging it was probably bad news for Qimonda workers and for DRAM buyers, who may see DRAM prices move up in response to the news.

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