Qimonda halts production at Dresden as insolvency proceeds

Memory maker Qimonda has stopped mass production at its Dresden fab with the opening of insolvency proceedings at the registry court in Munich.

Munich-based lawyer Michael Jaffé, who has already acted as preliminary insolvency administrator, was appointed as insolvency administrator for both companies. In a statement, the administrator said discussions are continuing with potential interested parties. The prerequisite for such support is the engagement of an ‘anchor’ investor in a new Qimonda.

To allow talks to continue, a transfer company has been set up to employee Qimonda’s remaining workers in Munich and Dresden. About 600 employees in Munich and about 1,850 employees in Dresden accepted the offer made last week to join the transfer company today (1 April 2009). In Munich, 84 per cent of the workforce agreed to transfer and 93 per cent of those based in Dresden who received the offer.

The transfer company will pay the employees on the basis of reduced hours – the workers will receive about 70 or 77 per cent of the net wages that had been paid prior to insolvency.

Qimonda recorded revenues of more than €90m during the period of the preliminary insolvency. However, production of memory chips at Dresden has now been put on hold from today. Engineers will maintain the sophisticated machinery in order to protect it from damage during the standby period. If an investor is found, production could be resumed.

If no investors can be found to finance Qimonda's continued operation, the company will most likely be liquidated.

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