Shares of

Qimonda

(QI)

sank more than 30% Monday, as a long-rumored acquisition by

Micron

(MU) - Get Micron Technology, Inc. (MU) Report

remained elusive and the financial landscape continued to crumble.

Without a deal, Wall Street is worried that the memory chip maker may have trouble surviving on its own. And the latest spate of banking woes in Europe, where Qimonda is based, is exacerbating the company's grim outlook.

"My conclusion is it's

Qimonda's stock decline got to be related much more to what's going on in Europe today as well," says Daniel Amir, of Lazard Capital Markets.

Over the weekend, European regulators seized two large banks: Fortis, a Belgian-Dutch financial giant, and the British bank Bradford & Bingley. As European lenders come under pressure, Amir says that Qimonda may have trouble tapping funds to stay afloat.

Qimonda has lost roughly $2.3 billion so far this year, and is cash flow negative, as a severe oversupply of DRAM memory chips has compressed prices for its products. Some analysts believe the company has only enough capital to survive on its own for two or three more quarters.

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Shares of Qimonda, which has its headquarters in Munich, Germany, were down 48 cents, or 32%, at $1 in midday trading Monday.

Infineon Technologies

(IFX)

, which owns 77% of Qimonda, was down $1.82, or 25%, at $5.40.

Just one week ago, Qimonda and Micron appeared to have

reached agreement on the principal terms of a deal

.

Micron and Qimonda have both declined to comment on deal rumors in the past.

The big question for investors has been how Micron, itself badly bruised from the DRAM downturn, would finance a deal with Qimonda. As time goes by, that is becoming less of an issue.

In the past week, Qimonda's already battered market cap has lost another half of its value, declining from a little more than $700 million last week to roughly $350 million in midday trading Monday.

Still, Qimonda's increasing affordability has not been enough to convince the Street that a deal is inevitable.

"People are unwilling to take the risk now of owning the stock for a potential deal because that strategy has not really played out" Lazard's Amir said of Qimonda.