LONDON — The German state of Saxony has agreed to loan 150 million euros (about $200 million) to struggling DRAM maker Qimonda AG if parent company Infineon Technologies AG puts up an equal amount of money, according to a Bloomberg report. However, Qimonda has decided to cut nearly 30 percent of its Dresden workforce as part of the restructuring plan, the report added.

"Saxony is ready to help. We believe in Qimonda's technological advantage," the report quoted state premier Stanislaw Tillich, saying in a statement emailed to Bloomberg.

The 300 million euro (about $400 million) package would be used to convert Qimonda's wafer fab in Dresden so that it can make other chips and requires approval by the European Commission, the report said.

While it makes sense to convert a fab to make something other than DRAM — which has been an overcapacity slump that has lasted two years — it is not clear whether Qimonda would evolve its business model with the change to become a maker of alternative memory, logic or a foundry.

As of Sept. 1 Qimonda employed 3,200 people at the Dresden wafer fab and will cut 950 jobs, the report said quoting Qimonda spokesman Ralph Heinrich.

The semiconductor market is predicted to fall by 16.3 percent in 2009, by market researcher Gartner Inc., because of a collapse of demand that will deepen in the first half and only begin to rebuild in the second half. Qimonda delayed reporting its full-year results on Dec. 1.

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