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Despite the politicking, Russia couldn't handle Qimonda

April 22, 2009 //

The idea that Russia might save Qimonda to any great effect in the global chip industry is, I am afraid, ridiculous. And that's with or without the involvement of Russian prime minister Vladimir Putin in the discussions.


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LONDON The idea that Russia might save Qimonda to any great effect in the global chip industry is, I am afraid, ridiculous. And that's with or without the involvement of Russian prime minister Vladimir Putin in the discussions.

But that does not mean an attempt will not be made. And beyond that, any such attempt could have implications for Qimonda's parent Infineon Technologies AG, which is already said to be seeking state-aid. While Qimonda largely seems to have gone, these difficult times could yet prove dangerous to Infineon, which also needs to undergo a radical transformation. So far that has largely been limited to putting its child at arm's length and saying that no more support is available.

Sure, Russia could pump some money into Qimonda in Dresden and keep employment up. After all Russia, notwithstanding the current global economic recession, has plenty of money. But along with the amount of cash that Qimonda needs to refinance itself, would go control and Russia has not shown itself able to organize chip manufacturing at anything but a parochial scale.

We certainly applaud the steps taken at Angstrem, Mikron and Sitronic, but we also note that protected markets and trailing-, rather than leading-edge, manufacturing have been the hallmarks of their progress.

Russia has come a long way in a decade but mainly it has come a long way by virtue of the windfall benefits of its vast reserves of gas and oil. Rather like a householder who feels rich as the market value of the house inflates, Russia has not had to do much by way of technological development or the adoption of global capital markets. There are some notable exceptions in entrepreneurial software and firmware companies, but in general semiconductor manufacturing still seems to be treated as a quasi-state enterprise in Russia. And this is not a recipe for success.

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