Qimonda Richmond, LLC (“Debtors”), the U.S. subsidiary of Qimonda AG, filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware on February 20, 2009. According to Debtors’ Affidavit in Support of its Bankruptcy Motions (the “Affidavit”), Qimonda AG is one of the largest producers of semiconductor “memory products” with operations in Europe, Asia and North America. Qimonda AG specializes in the production of “dynamic random acess memory” (“DRAM”) memory products with end users such as HP, Dell, IBM and Sony. Debtors’ U.S. operations are located in North Carolina, Virginia, California and Texas.
Why Qimonda Filed For Bankruptcy
Beginning in March of 2007, the market price for Qimonda AG’s memory products began to drop due to decreased demand. As more and more DRAM products came onto the market, prices continued to fall. According to Debtors’ Affidavit, DRAM prices dropped 85% in 2007 and 58% in 2008. In an effort to restructure its business, Qimonda AG closed its Vermont operations in June 2008. In October, Qimonda AG let go over 1,000 employees at its Richmond facility. Two months later Qimonda was notified by the New York Stock Exchange that it was not in compliance with the NYSE’s listing standards as its market capitalization fell below $100 million. Qimonda AG began insolvency proceedings in Germany on January 23, 2009 and this bankruptcy proceeding soon followed.
Objectives In Bankruptcy
Debtors intend to finance their operations going forward by using their cash flow. At the time Debtors filed for bankruptcy, they had over $10 million in cash. Debtors hope to find a buyer for the Qimonda Richmond facility quickly. According to Debtors’ bankruptcy petition, Debtors’ top trade creditors include Applied Materials ($9.9 mm claim); Sumco USA Corp. ($6.4 mm); Tokyo Electron ($5.9 mm); Siltronic ($4.0 mm) and Mem Electronic ($3.0 mm). This bankruptcy is before the Honorable Mary F. Walrath, former Chief Judge of the Delaware Bankruptcy Court.