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Infineon eyes Toshiba link
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August 27, 2001: 6:10 a.m. ET
German chipmaker talks with Japan's Toshiba, seeks efficiencies
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LONDON (CNNfn) - Falling semiconductor prices have prompted chipmakers Infineon of Germany and Toshiba of Japan to discuss ways of cooperating.
The Germany company said on Monday it was in talks with its Japanese counterpart about working together in memory-chip production, but wouldn't give details of the measures being discussed.
Several options for an agreement with Toshiba are being considered, an Infineon Technologies (FIFX) spokeswoman told Reuters.
The news came after Toshiba Corp. said earlier on Monday that it plans to cut staff by 10 percent, or about 19,000 people, in the next two and a half years. The company also warned that its expects to report a net loss of 115 billion yen ($956 million) for the financial year ending next March.
A slowdown in sales of microprocessors to makers of personal computers and cellular phones, beginning in the second half of 2000, has undermined the price of chips, forcing semiconductor firms to look at ways of cutting costs.
Infineon's shares were trading up 2.6 percent at  27.46 in Frankfurt after the announcement. In Tokyo, shares of Toshiba closed 5.6 percent higher at 604 yen.
Infineon last month said it fell to a loss of 598 million ($544 million) in the third quarter of its financial year, with sales dropping 30 percent. Writedowns reflecting the falling value of unsold stock made up a large part of the deficit.
The company warned at the time that it was unable to issue a clear forecast of future business, saying "visibility remains low".
Some market players and commentators have said in recent weeks that the industry could be on the point of stabilizing or even enjoying a gentle upturn, however.
"The decline of the semiconductor market has bottomed out," Philips Electronics CEO Gerard Kleisterlee told a news briefing Friday.
And investment bank Goldman Sachs earlier this month upgraded its ratings on a range of chip-related stocks as it said it anticipates improving fundamentals for the industry. 
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