Infineon Technologies has agreed to pay €753.5m ($837m) to resolve a long-standing legal dispute with the insolvency administrator of its former subsidiary, Qimonda, a memory chipmaker.
This settlement by the German semiconductor manufacturer brings an end to a legal battle that has been ongoing since 2010, following the financial collapse of Qimonda in 2009 after a significant downturn in chip prices.
The dispute began in 2006 when Infineon spun off its memory chip division, creating Qimonda. However, by 2009, Qimonda was unable to weather the severe drop in chip prices and filed for insolvency after failing to secure a rescue package.
The insolvency administrator of Qimonda then filed a lawsuit against Infineon in 2010, claiming €3.35bn in damages. The lawsuit alleged that Infineon had transferred assets to Qimonda at inflated values, contributing significantly to the financial instability that led to Qimonda’s collapse.
Over the years, the legal case saw multiple court proceedings, with various expert opinions adding complexity to the case. Earlier in 2024, a court-appointed expert supported the claims made by the insolvency administrator, increasing the pressure on Infineon to reach a settlement.
The final settlement amount of €753.5m is slightly lower than the administrator’s initial demand of €800m. Infineon has stated that it will use funds previously set aside to cover this legal dispute. However, the company acknowledged that the settlement would impact its earnings and cash flow from discontinued operations.
Both Infineon’s supervisory board and the creditors’ committee of Qimonda have approved the settlement terms. This agreement resolves all outstanding legal disputes and claims against Infineon, allowing the company to move forward without the ongoing legal entanglement.
The insolvency administrator has indicated that the conclusion of Qimonda’s insolvency proceedings is expected by 2025, with the possibility of dividends being distributed to creditors at that time.
Last month, Infineon escalated its ongoing legal battle against Innoscience (Zhuhai) Technology, Innoscience America, and their affiliates by expanding the lawsuit in the District Court for the Northern District of California. The additional claims involve the infringement of three more patents related to Infineon’s gallium nitride (GaN) technology.
These claims concern the infringement of three additional patents related to Infineon’s gallium nitride (GaN) technology. Alongside this, Infineon filed a complaint with the US International Trade Commission (USITC), seeking a permanent injunction to prevent the infringement of these patents, which cover crucial aspects of GaN power semiconductors integral to the performance and reliability of Infineon’s GaN power transistors.
Earlier this month, Infineon reported its Q3 FY 2024 results, recording revenue of €3.7bn and a segment result margin of 19.8%. The company also projected Q4 revenue of around €4bn, with a segment result margin forecasted at approximately 20%.
In another significant development, Infineon opened the first phase of its new semiconductor fabrication plant in Malaysia, earlier this month. This €2bn investment focuses on producing silicon carbide (SiC) power semiconductors, with the second phase, involving an additional €5bn investment. The project, upon completion, is expected to generate up to 4,000 jobs.
Recently, Infineon also revealed plans to lay off 1,400 employees worldwide and relocate another 1,400 positions to countries with lower labour costs as part of its cost savings initiative.
