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To: Johnny Canuck who wrote (45184)	12/4/2008 12:29:16 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71914

Market Scan Infineon Faces Dark Future Lionel Laurent, 12.03.08, 09:20 PM EST Chip maker posts worse than expected quarterly loss and warns sales will fall in 2009. * Infineon Technologies AG ADS Thu Dec 04 2008 00:03 EST $1.19 $-0.84 -41.38% Chart Infineon Technologies AG ADSChart Infineon Technologies AG ADSChart Infineon Technologies AG ADS o 1 day o 3 mo o 1 year o Advanced Tearsheet \| Chart \| News * STMicroelectronics NV Thu Dec 04 2008 00:03 EST $6.55 $+0.28 +4.47% Chart STMicroelectronics NVChart STMicroelectronics NVChart STMicroelectronics NV o 1 day o 3 mo o 1 year o Advanced Tearsheet \| Chart \| News It's looking infinitely bad for Infineon. Among the chip maker's woes: a gloomy outlook for 2009, dwindling cash reserves and a large stake in Qimonda. Shares of Infineon tanked 39.6%, or 66 euro cents (84 cents), to an all-time low of 1 euro ($1.27), at the close in Frankfurt on Wednesday after it forecast a sharp decline in sales for 2009. Infineon's New York-listed shares fell 41.4%, or 84 cents, to $1.19. The stock has lost 90.9% in New York since it hit its 52-week high of $13.06 in December 2007. Article Controls imageemail imageprint imagereprint imagenewsletter imagecomments imageshare imagedel.icio.us imageDigg It! imageyahoo imageFacebook imagerss Yahoo! Buzz The company warned that deteriorating demand in the automotive sector meant sales would fall by "at least" 15.0% in the coming year. The chipmaker also posted a quarterly loss attributable to shareholders of 711 million euros ($898.4 million) Wednesday, missing expectations because of higher than expected restructuring costs and a 1.3 million euro ($1.6 million) write-down on its New York-listed Qimonda (nyse: QI - news - people ) unit. But other concerns are dominating investor sentiment in the stock. Infineon has corporate bonds worth nearly 1.0 billion euros ($1.3 billion) maturing in 2010, and it is difficult to see how these can be repaid without refinancing or a macroeconomic miracle. The likeliest route, according to analysts, will be a share issue--not a popular move in the current environment. "The management and the chief financial officer did not have a convincing refinancing strategy," said Juergen Wagner, an analyst with Oppenheim Research, "therefore people are just selling." Then there is Qimonda. Infineon (nyse: IFX - news - people ) is desperately trying to reduce its stake in Qimonda to 50.0%, from 77.5%, before February, but the company said on Wednesday that there was no guarantee it would be able to do this. With Qimonda facing the threat of bankruptcy if it does not find a buyer or some sort of bailout, Infineon warned it might also be hit with the possibility of shareholder lawsuits. "It must be every chief executive's nightmare, what's happening right now," said Lee Simpson, an analyst with Jefferies. "They're really getting it from all the angles." Comment On This Story Qimonda specializes in DRAM chips, a type of memory that is commonly used in appliances like computers. But a glut in the market has hurt prices and crippled investor sentiment in Qimonda over the past two years. (See "Qimonda On Brink Of Bankruptcy.") Related Quotes Thu Dec 04 2008 00:03 EST Qimonda AG ADS * * $0.13 * -0.02 * -13.33% Tearsheet \| Chart \| News \| Executives Infineon Technologies AG ADS * * $1.19 * -0.84 * -41.38% Tearsheet \| Chart \| News \| Executives STMicroelectronics NV * * $6.55 * +0.28 * +4.47% Tearsheet \| Chart \| News \| Executives Nokia Corp ADS * * $13.30 * -0.34 * -2.49% Tearsheet \| Chart \| News \| Executives Related Stories * Investor Exodus Wipes 40% Off Infineon * Auto Misery Hurting Infineon * Failing Memories At Infineon and STM * Memory Improves For Infineon * Infineon's Loss, Investors' Gain Related Videos * Autos On Capitol Hill * NBA's Big Bounce * U.S. Stocks Seesaw * Cyber Shoppers Complain * Street's Volatile Session * Quotes * Stories * Videos Infineon's forecasts also looked worse in comparison with rivals'. Infineon said sales in the current quarter were expected to fall by 30.0%, whereas rival STMicroelectronics (nyse: STM - news - people )' recent forecast slashing pointed to a less severe drop of 12.8%-18.4%. Markets Brief December 03, 2008 04:50 PM EST Seesaw Tilts Higher For U.S. Stocks A topsy-turvy day on Wall Street finished on a high note Wednesday as investors shook off a slate of bleak economic readings to end a volatile session in positive territory.The market righted itself f... Read More Full Markets Coverage > Infineon said sales would reflect "a worsening global recession, significant production cuts in the automotive markets worldwide … and a general global weakening in demand." It also said wireless sales would be hurt by a reduction in demand from one unnamed customer. Infineon supplies chips to Nokia (nyse: NOK - news - people ), Samsung (other-otc: SSNLF - news - people ) and Motorola (nyse: MOT - news - people ), among others. Analysts at DZ Bank in Frankfurt recommended selling Infineon stock and opting instead for Dialog Semiconductor (other-otc: DLGNF - news - people ), a smaller German chip maker that boasts Apple (nasdaq: AAPL - news - people ) and mobile-phone maker Sony Ericsson as clients.