German chipmaker Infineon narrows losses

Infineon, the world's fourth-largest maker of computer chips, narrowed its losses last quarter as demand for its key product picked up.

But it's still warning that prospects for the next few months remain uncertain.

The company lost €108m net in the January-March period, its fiscal second quarter.

That compares to a €23m profit in the same quarter the year before - but it's a third of the €331m loss in the previous quarter.

Munich-based Infineon, along with other computer and communications industry suppliers, has been struggling with a worldwide slowdown in business spending on new equipment that has seen chip prices plummet.

But results from the first three months of the year showed the company has made progress cutting its losses.

At its core chip-making business, the operating loss narrowed to €28m from €371m the quarter before, helped by a rise in the spot price of the 128-bit dynamic random access memory chip - a staple of the industry.

On the same comparison, losses also shrank at its operations making parts for cell phones, cars and security-card systems.

"Infineon's revenue performance was driven by the overall improvement of demand in all business groups and a strong increase in prices for memory products," chief executive Ulrich Schumacher said in a statement.

Still, the company expressed caution about the months ahead.

"The market outlook for the next six months still remains somewhat uncertain and will depend on the extent and sustainability of the recovery of the world economy, particularly in Europe and the United States," Infineon said.