"Manufacturing at Munich Perlach will be phased out by early 2007. Production will be largely transferred to our plant in Regensburg, south Germany, and to a lesser extent to Villach, in Austria," Infineon said in a statement.

Some 800 people were employed at the Perlach factory in the south of Munich and the restructuring "will be done in a manner that is as socially acceptable as possible," the computer chip maker said.

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