Infineon Technologies AG, the chip-making arm of German electronics conglomerate Siemens AG, says that the company’s partners and customers may take a stake in the company when it floats on the stock market in Spring 2000. Chief executive Ulrich Schumacher told a news conference in Munich that it was conceivable that these close associates could take a stake of under 10% in Infineon.
Prospects for the IPO have improved enormously after the company revealed that it made net income of 69m euros ($69.5m) in the year to September 30 compared with a loss of 790m euros ($793.7m) in the previous 12 months. Schumacher said that Infineon was likely to be valued at the upper end of the Dm10bn to DM20bn ($5.1bn to $10.2bn) price range, though some company sources have put the top end at 25bn marks ($12.8bn).
Infineon works closely with a range of companies including IBM and Toshiba on memory chip production and technologies. NEC, Hitachi, Nokia and Motorola are all involved in partnerships with Infineon in application technologies.
Siemens plans to list around 25% of the share capital in the initial IPO, with the shares quoted in Frankfurt and New York. It plans to reduce its stake to a minority position by the following year and eventually cut its holding to zero.
Sales last year grew 33% to 4.2bn euros ($4.2bn) which it rates as twice the industry’s average. While it doesn’t anticipate this growth rate continuing, it expects to continue to outpace the market. Sales of memory chips, its largest sector and the company’s Achilles heel in case of a market downturn, increased 86% to 1.2bn euros. Schumacher said he expected DRAM chip sales in the current financial year to increase significantly above market growth of 19%.
