Infineon is to quit the DRAM market. The German chip maker will split up its DRAM unit and sell the bits to Micron and Nanya.

So claims US investment bank Needham & Co., by way of a Reuters report.

Terms of the deal - which none of the parties have yet confirmed or denied - remain unknown. Will the companies pay cash, offer up shares or a mixture of the two? We shall see.

Nanya and Infineon already have a relationship through Inotera, their soon-to-IPO DRAM joint venture. And in September, the two firms also agreed to extend their DRAM development co-operation agreement. The deal will see the two work on a 60nm production process at Infineon's Dresden fab - due to be taken over by Nanya, if Needham is correct - to be used by "both companies and at their manufacturing joint venture Inotera".

Infineon is the world's fourth largest DRAM maker by sales revenues, but the company's memory division has been struggling of late. In July, the DRAM business' chief, Andreas von Zitzewitz, resigned under a cloud of motorsport sponsorship irregularity allegations. His replacement is Kin Wah Loh, formerly in charge of Infineon's communications product division. Infineon itself has been losing money over recent quarters, in part thanks to falling memory prices and slowing demand. ®

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