German chip maker Qimonda has filed for insolvency after it failed to nail down a rescue package amid a huge drop in memory chip prices.

The Munich-based DRAM vendor had attempted to secure €325m following an agreement it inked in late 2008 with the German state of Saxony, an unnamed bank in Portugal and parent company Infineon.

However, the deal didn’t complete in time due to “irreconcilable” differences between the parties involved. Qimonda, which has seen its shares tumble more than 90 per cent in the past year, said its failure to gain access to capital it desperately needed meant the firm had no choice but to file for insolvency.

Qimonda boss Kin Wah Loh hoped the move will help the firm restructure more quickly and "put the company back on a solid foundation".

Loh insisted the company hasn’t gone bust, but rather would undergo a painful restructuring process “to continue our business with the support of a provisional insolvency administrator," he said.

“Everyone involved fought to the very end in an attempt to save Qimonda,” said Infineon, which holds a 77.5 per cent equity interest in the beleaguered chip maker.

“We sincerely regret that these efforts have not ultimately succeeded in achieving the desired outcome and that Qimonda’s employees now face an uncertain future.”

Infineon spun off its loss-making DRAM unit in 2006, when it also renamed the subsidiary to Qimonda. ®