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New CEO reorganizes Infineon, denies merger rumors

Posted: 07 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Infineon merger rumor? company restructure? automotive unit?

New Infineon CEO Peter Bauer has announced restructuring efforts in the company, embracing five business units instead of two. Bauer also rebuffed speculations on an imminent merger.

With the move, the company hopes to improve its customer orientation and speed decision processes.

d in two large business units: Communications, which comprises products for mobile and landline communications; and Automotive, Industrial and Multimarket, which combines all activities in the respective segments including power electronics and smart card chips.

With the start of Infineon's next financial year (Oct. 1), the company will consist of five business unitsAutomotive, Industrial Electronics, Security, Wireline and Wireless. In the company's management board, the competencies also will change. Hermann Eul, currently head of the communications unit, will take the responsibilities for sales, marketing and product development. The newly created divisions will be managed by directors who report directly to Bauer but do not belong to the management board.

No mergers
In the press meeting with financial and business journalists, Bauer also countered speculations on imminent mergers, saying that there are no M&A decisions to take. He pointed out that "in the semiconductor industry everybody is talking to everybody", but he also made clear that Infineon "won't hurl into any adventures for the sheer sake of size."

Bauer also elaborated on the Infineon's IFX 10-plus program aiming to strengthen the company's profitability. The program will improve the company's margins in two ways, Bauer explained: "By product portfolio management, i.e. by focusing to highly attractive business segments, and by reducing manufacturing costs. With the implementation of the program, the company hopes to cut costs in the triple-digit million Euro range."

While Bauer ruled out to transfer entire manufacturing units from Europe to Asia, he announced to outsource production activities to foundry service providers in cases where production would not contribute to create a differentiation in the competition. Such a differentiation is generated in the first place in the automotive and power electronics segment, Bauer said. With respect to the manufacturing strategy, Bauer insofar maintains the company's course of a fab-lite approach and the abdication of own production facilities for geometries smaller than 65nm.

In addition, he did not rule out job cuts. But no decisions are taken yet nor can be expected soon, he said.

- Christoph Hammerschmidt
EE Times Europe

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