Frankfurt: German chipmaker Infineon is in talks over a deal worth hundreds of millions of Euros to outsource its IT infrastructure, Germany's 'Financial Times Deutschland' reported on Monday (Feb 16, 2004).

"We are in the process of selecting a partner and are in negotiations over a large deal," Infineon's Chief Operating Officer Andreas von Zitzewitz said.

The contract would run for five years, with 250 workers going over to the IT service provider, he added.

Von Zitzewitz also said he saw the proportion of chip production done by Infineon's partners, already at 30 to 40 per cent in some divisions, increasing as demand picks up.

"I can imagine that the proportion of production outsourcing in some segments could temporarily rise as high as 50 percent," he said.

Infineon has in the past outsourced several parts of its business, not always with success, but von Zitzewitz said this time it would do so in a more structured way.

"What's new is that we want to reduce the amount of partners we have and to work with world-class firms," he said.

Infineon's accounting, which it consolidated into a single operation and moved to Portugal, would remain within the company.

"It's a demanding department," said von Zitzewitz. "In this case we're not ready at the moment to pass it to an out-of-house firm."