The parent company admitted in a statement that losses at the unit, which have been estimated at more than $100m a month, are "unsustainable". BenQ had been keeping the company afloat with injections of capital.
Siemens paid BenQ more than $300m to take the troubled mobile division off its hands, but the acquisition became a millstone for the Taiwanese company, which has been unable to restore it to profitability.
BenQ still retains the right to use the Siemens brand on mobile phones until 2010. Some 3,000 of BenQ Mobile's 8,000 staff work at the troubled unit.
Analysts estimated last month that the BenQ-Siemens business had lost $315m in the second quarter of the year, a deficit which the company offset by selling its optical drive manufacturing division to Lite-On.
The losses were so serious that BenQ moved its target date for a return to true profitability from the end of this year to the second half of 2007, before the decision to cut off funding to the German mobile operation.
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