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Infineon's DRAM unit lowers IPO price, lists

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The DRAM company spun off by Infineon Technologies AG earlier this year will list on the New York Stock Exchange Wednesday for about half as much as the two companies had been seeking.

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The initial public offering of Qimonda AG, the world's second largest DRAM (dynamic RAM) maker by market share, attracted just US$546 million, far lower than the $1.1 billion the companies were looking for when they announced the offering last month.

A total of 42 million shares will be sold in the U.S. for $13 each, Qimonda said, lower than the 63 million Qimonda shares initially on offer to the public for between $16 and $18 each.

In a statement, Qimonda said it "encountered a challenging market environment" during the share sale. It gave no further reason for the lack of interest in its IPO.

One stock market analyst blamed the delayed launch of Windows Vista for the lack of interest in Qimonda. "I don't see any reason for explosive growth in the DRAM market until Vista launches," said Andrew Teng, a manager at Taiwan International Securities Corp. in Taipei. People expect the launch of Vista to really stir up demand for new PCs, he added.

About three-quarters of all DRAM chips are used in PCs. The chips retain data as it's being used.

The IPO is important for Infineon and Qimonda. Infineon is focusing on chips with higher profit margins, and getting away from the volatile DRAM business. Cutthroat competition in the industry over the past several years forced companies often to sell their products at a loss, and a number of chip makers have exited the business.

Qimonda, which will be listed under the stock symbol QI, had hoped to use proceeds from the stock sale to pay for chip factories, equipment and research and development.

Aside from DRAM operations in Germany, Qimonda runs a joint venture DRAM maker in Taiwan, Inotera Memories Inc., with partner Nanya Technology Corp.

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