Memory chips drive Infineon Q1 results

Increased demand for memory chips used in computers, portable media players, and other consumer electronic devices helped Infineon Technologies offset a first-quarter drop in sales in the German chip maker’s communications products.

Infineon group revenue, including sales of Qimonda, the memory chip unit spun off in May, rose 27 percent to €2.13 billion ($2.81 billion as of Dec. 31, the last day in the period being reported) from €1.67 billion in the same period a year earlier, the company said Monday.

Qimonda, which Infineon owns more than 85 percent of, saw first-quarter revenue jump 73 percent to €1.17 billion from €678 million a year earlier.

That compares with a 29 percent drop in first quarter revenue in Infineon’s communications segment, which supplies chips to handset makers, manufacturers of broadband access equipment, and others. Revenue in the segment fell to €239 million from €334 million year-on-year. Compared to the previous quarter at €297 million, first-quarter revenue dipped 21 percent.

Contributing to the revenue loss in the communications segment was BenQ Mobile, the former Siemens AG mobile phone manufacturing unit that was acquired by Taiwan’s BenQ but declared bankruptcy last year. Infineon was a major supplier of chips to BenQ Mobile.

Revenue in the automotive, industrial, and “multimarket” segments was €710 million, up 9 percent from €652 million year-on-year but down 4 percent from €740 million compared to the previous quarter.

On the positive side, Infineon posted its first profit in several quarters. First-quarter net income came in at €120 million, or €0.15 per share, after a loss of €183 million, or €0.25 per share, in the same period a year earlier.

Infineon said that in a “challenging environment,” its first-quarter results “came out better than originally expected.”

For the second quarter, the company expects revenue to “remain at least flat” compared to the fiscal first quarter.

Qimonda expects continued strong growth in its memory chip business, driven largely by demand for consumer electronic devices, including MP3 players, and either new or upgraded computers running Microsoft’s new Windows Vista operating system.