German computer chipmaker Infineon missed quarterly earnings forecasts as unexpectedly weak demand for phone chips exacerbated the effect of falling memory chip prices and said it saw little improvement ahead.
Infineon shares fell nearly 4 per cent as executives said today they could not predict when its communications unit would return to profit, despite restructuring measures that cost the company €74 million.
Including this charge, Infineon swung to a loss before interest and tax of €117 million in its fiscal second quarter to end-March, almost three times that forecast in a Reuters poll of 16 analysts.
Infineon said its average selling prices had fallen 15 per cent in the first quarter of 2005 and that it saw a further significant price decline this quarter.
"Infineon anticipates no major improvement in demand in the third quarter of financial year 2005," Europe's biggest chipmaker said in a statement.
Chipmakers including Samsung Electronics, the world leader in standard DRAM chips, and Micron, the world's third-biggest memory chip maker, have reported a tough pricing market amid a glut of the commodity-like DRAM chips.