Chips are down for Infineon

However, it promised that sales of its DRAMs would boom by the end of the year although the next quarter would "remain difficult".

The company said: "The revenue decline of 30 per cent from the record level in the fourth (previous) quarter was due to the weakening of the market for memory products." Turnover for the first quarter was E1.66bn (£1bn).

Revenues for the memory products group were E497m (£317m) - down 26 per cent on the same period last year, and 61 per cent down from the previous quarter.

Dr Ulrich Schumacher, president and CEO of Infineon, said: "Infineon has delivered on its promise to improve margins in its non-DRAM business. We have successfully shifted our product mix towards higher margins, especially in our wireline communications and smartcard businesses."