MUNICH, Germany — The situation of Qimonda as one of the few major remaining semiconductor manufacturers in Germany and Europe is increasingly becoming a political issue. In an Interview with German newspaper Handelsblatt, Saxon Premier Stanislaw Tillich said he would accept the risk for job losses. And he did not find overly friendly words for Infineon as Qimonda's major shareholder.

As reported, memory chip maker Qimonda is in deep trouble: The company is losing money and the point in time is foreseeable when it will have to file insolvency. This could be the case as early as the first quarter 2009 — if no miracle happens. Such a miracle could be an investor for the 12,000-employee chip manufactuer. For instance there are constant rumors that Micron Technology is in negotiations with parent company Infineon.

Such a miracle could also be state aid. Indeed, the chip industry calls for EU subsidies on a pan-European basis, and in the case of Qimonda it is known that the memory chip maker as well as Infineon are in talks with politicians over that issue.

For the first time now, a representative of the political establishment publicly aired his position on this subject. In an interview with business paper Handelsblatt, the Prime minister of the state of Saxony explained to which extend politics could support Qimonda and the European chip industry — and where the limits are. Mr. Tillich was quite clear.

"As important as these jobs in 'Silicon Saxony' might be, we don't allow the management of Qimonda and Infineon to pressure us," Tillich said, adding that "it is not the purpose of the state of Saxony to do price nursing for Infineon."

Tillich said that on the national level as well as on the EU level public aid would come up short in this case since Qimonda's competitors are outside of Europe and get "bounteous subsidies," as Tillich put it. He called by name AMD (which has received state aid for a planned fab in upstate New York, but ironically also runs a large fab in Dresden, also not without help from the state), as well as Asian chip vendors Samsung and Hynix. In this context, he said Hynix is one of the suitors to buy Qimonda, which Hynix reportedly declined by immediate return.