German chipmaker Qimonda is seeking government protection after declaring itself bankrupt.
The company said on Friday that it would begin a restructuring programme in co-operation with a court-appointed administrator. Qimonda hopes that the move will help it avoid going into liquidation.
"We assume we will be able to continue our business within the context of our restructuring programme with the support of the temporary insolvency administrator and our employees," said Qimonda president and chief executive Kin Wah Loh.
"We are especially counting on the excellent relationships with our customers and suppliers, with whom we have made significant progress in developing our Buried Wordline technology during the last months."
Qimonda blamed much of its financial woes on a slow DRAM market which sent chip prices plummeting. With profits falling, the company said that the slow economic conditions prevented it from gaining new financing.
The chipmaker did not provide any estimates on how many jobs could be lost in the restructuring. It is already in the process of cutting costs at its US plant in Virginia, as well as consolidating its operations in Munich and China.
Qimonda was formed in 2006 as a spin off from the chip making operation at Infineon. The insolvency filing is being attributed as a major factor in a nearly five per cent drop in Infineon's stock on Friday.
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