MUNICH, Germany — While Infineon and Qimonda maintain silence about negotiations with Micron, the press here already spreads details of a possible takeover by Micron Technology.

The uncertainty over the conditions of the probable takeover has triggered unrest among the workers at the joint Infineon and Qimonda campus in Munich, writes Sueddeutsche Zeitung. Quoting unnamed sources inside or close to the companies, the paper already sketches the outcome of the takeover which appears more likely with every day Infineon comes closer to its self-set deadline: The company repeatedly has committed to reduce its stake in loss-making DRAM manufacturer to significantly below 50 percent from currently 77.5 percent.

According to the paper, it is highly probable that Micron will get Qimonda for free or for a symbolic price. "Much more interesting than the takeover price is the question which guarantees the buyer will offer," Sueddeutsche Zeitung quotes an unnamed insider. Equally unnamed employee representatives admit in the article that against the background of Qimonda's financial situation their negotiation position is weak.

However, since Qimonda's Dresden fab has been highly subsidized by the German government and the Saxony state government, Micron probably will maintain the Dresden production activities in order to avoid hefty reclaims, the employee representatives hope. From their perspective, there are two possible scenarios: If Micron is only interested in buying market share, in the long term drastic job cuts or even the closure of the Dresden production as well as the Munich-based R&D activities would be possible. The second, and somewhat more likely, scenario would be that Micron is interested in Qimonda's technology. In this case, the chances to maintain the Munich and Dresden activities are higher.

The paper also quotes a recent Commerzbank study with the conclusion that a merger of Micron and Qimonda would make sense.

This opinion appears to prevail among analysts. An expert interviewed by EE Times Europe who asked for anonymity said he believes that such a move would have a positive effect on the DRAM market. He said Micron would strongly benefit from a takeover, since it could improve its productivity by integrating the Qimonda production sites in Dresden and Richmond, USA. "Micron still produces to a relatively large extend on 200-mm lines while Qimonda is largely equipped with 300-mm fabs," he said. "They probably will implant their production processes in Dresden and Richmond, replacing Qimonda's own processes which have proved to be less competitive under a yield aspect."

Despite producing red numbers at its own, Micron would be strong enough to swallow Qimonda, the expert said — especially if they get it a 'special price' of about 10 percent of its book accounting value or even less.

Another favorable factor for the takeover would be the product spectrum. According to the expert, both companies would complement each other almost ideally. "Micron currently has almost no exposure in the video graphics DRAM market where Qimonda is market leader," the expert said.