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Infineon sees no end to slump
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November 13, 2001: 5:15 a.m. ET
Europe's No. 2 chip maker posts hefty loss, sees no end to worst-ever chip slump
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LONDON (CNN) - Infineon Technologies posted a hefty loss on Tuesday and warned there was no end in sight to the chip sector's worst-ever slump.
Europe's second largest semiconductor maker, like rivals STMicoelectronics and Philips Electronics, has seen demand plummet because of over capacity and a sharp economic slowdown.
The German company said its fourth quarter net loss widened to  523 million ($467 million) from a loss of 371 million in the previous quarter.
It said sales in the quarter ended September 30 fell 15 percent from the
previous quarter to 1.09 billion.
Analysts polled by Reuters forecast a net loss in a range of 526 million to 330 million. Sales were seen in a range of 978 million to 1.108 billion.
"The result is worse than expected and the outlook shows no great sign of improvement in market conditions. I'm lacking optimism for the stock," said Harald Schnitzer, an analyst at DZ Bank in Frankfurt.
Infineon, the world's fourth largest producer of computer memory chips, has been particularly hard hit as prices for dynamic random access memory chips (DRAM) - used in personal computers -- have sunk to around a third of production costs.
The Munich-based group offered little comfort to the sector, saying market forecasts expected a 30 percent decline in calendar year 2001 with only moderate growth next year.
"The market development in the next six months remains uncertain and will be impacted by the slowdown of the world economy and the uncertainty of the current global political environment," the company said.
"These factors will impact the overall product demand, the intensity of competition in an already competitive market environment, continued pricing pressure and excess manufacturing capacity," it said.
Infineon shares have climbed more than 40 percent since hitting a lifetime low of 11.52 on September 27, outperforming the Eurostoxx tech index, which has risen about 26 percent. In early Frankfurt trading, the stock rose 5.5 percent to 21.25.
--Reuters contributed to this report 
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