"In light of the continuing tense market situation, we plan to downsize our workforce," Infineon said in a statement.

"Up to 900 jobs will be reduced, including 500 in various corporate functions, plus another 150 in its secure mobile solutions division. There will also be cuts via transfers or outsourcing," the statement said.

The cuts were part of an additional programme of measures aimed at cutting costs by some 500 million euros (550 million dollars), of which 50 million euros would be cut this year.

Infineon had already undertaken radical cost-cutting measures in 2001 which had led to cost savings of 2.8 billion euros.

Chairman Ulrich Schumacher said "the lion's share of the savings would have an effect on earnings next year."

The group was also relocating a number of its businesses.

The automotive and industrial electronics division, for example, would be transferred to Austria.

And Infineon was also examining relocating its headquarters outside Germany.

"We are examining the financial benefits of relocating the corporate outside Germany," Schumacher said.

"We are currently examining various sites in Asia, the United States and Europe, amongst others Switzerland."

Such a move would generate cost savings which Infineon could use to invest in new technologies and infrastructures, the chairman argued.

SPACE.WIRE