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To: Don Green who wrote (86253)	5/5/2003 1:27:41 PM
From: Don Green	Respond to of 93625

Infineon seems ready to set up headquarters outside Germany Jack Robertson EBN (05/05/2003 10:00 AM EST) With DRAM average selling prices still declining and overall market conditions improving only slightly, Infineon Technologies A.G. last week announced major steps to bring its operating costs under control and stem losses. Infineon will eliminate as many as 900 jobs and relocate one of its business units. More surprising was the German chipmaker's admission that it is considering the "financial benefits" of relocating its head office from Munich to a city in a different country, based, apparently, on certain costly business restrictions in Germany that may not exist elsewhere. While the decision is not considered final, Infineon executives appear to have already made up their minds and are scouting for a location in Asia, Europe, or North America. In a recent statement, the company specifically mentioned Switzerland as a possibility. "Germany will continue to be an attractive location for Infineon, not least because of the availability of highly qualified specialists," said president and chief executive Ulrich Schumacher, in the statement. "Our far-reaching measures are designed to ensure the lasting global success of the company, which will also enable us to safeguard our jobs in Germany long-term." In the meantime, Infineon is proceeding with plans to reduce its workforce by about 3%, with the aim of cutting costs by $560 million. In 2001, the company announced its first cost-control actions, which it said resulted in savings of $3.1 billion. The latest measures includes shifting Infineon's Automotive and Industrial Electronics group from Munich to Villach, Austria. The chipmaker also announced that volume production of DRAMs in 0.11-micron process technology has started at its 200mm-wafer fabs and will also begin soon at its 300mm-wafer fab in Dresden. The first product scheduled to come off the line at 0.11 micron is a 256Mbit DRAM. Infineon said the latest die shrink will produce a cost savings of about 30% over 0.14-micron processing. Other DRAM suppliers are taking similar steps to increase output on leading-edge processes. This development will further depress DRAM prices and make it even more difficult for companies like Infineon to return quickly to profitability, analysts said.