GEORGE FREY

FRANKFURT (AP) ¿ German computer chip maker Infineon Technologies AG said Thursday that it narrowed its second-quarter loss, but the global economic crisis pushed down sales and the company predicted a full-year operating loss.

Infineon's net loss for the January-March period, its fiscal second quarter, was euro258 million ($343 million), which the company said compared with a loss of nearly euro2 billion a year earlier. That figure was weighed down by charges related to struggling memory chip unit Qimonda AG

Neubiberg-based Infineon, which makes semiconductors and products for computerized systems, said second-quarter sales were down 25 percent to euro747 million from euro1 billion a year earlier. Infineon's fiscal year begins in October.

The company said that, while it expects business to improve in the current quarter, "considerable uncertainties remain for the year."

It said it expected full-year revenues to be 20 percent below 2008 levels, causing operating results "to decrease significantly and be negative."

In 2008, the company had total revenues of euro4.3 billion.

Infineon said sales dropped in the second quarter at divisions including its chip card, security, and wireline communications. However, they rose at the wireless solutions division.

Infineon makes components for sectors including the car industry and telecommunications.

"Strategically, Infineon is positioned well," chief executive Peter Bauer said.

However, he added that "in this challenging environment, we further need to have a tight grip on expenses."

Infineon said it had saved about euro60 million in the second quarter, largely in operating expenses.

It said it had also made progress on previously announced staff reductions, as the payroll now stands at around 26,400 people ¿ compared with 29,100 at the end of September 2008.

Infineon said it would also reduce capital expenditure for the current year to between euro170 and euro190 million, compared with the euro370 million it spent in 2008.

Shares of Infineon were only slightly higher at euro1.90 in Frankfurt morning trading.

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