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Qimonda AG 03 July 2008

Company News Alert

Significant appreciation in Qimonda’s ADR price on 02 July 2008

ADR BUY After demonstrating a declining trend for some time now, Qimonda AG’s (Qimonda) ADR price reported
a Direct
significantaccess
Fundamental stock to the full
price appreciation on report freefollowing
02 July 2008 of chargenews atof a reduction in production by
Rexchip Electronics Co. (Rexchip), which is forecast to ease inventory glut, and reports of higher
http://www.iirgroup.com/researchoracle/viewreport/show/20190
demand in China leading to an anticipated recovery in Dynamic Random Access Memory (DRAM)
prices. Although a recovery in prices is in line with our expectation, we remain conservative regarding
Ticker: QI the extent of recovery. However, given the recent decline in the ADR price, we believe the stock offers
Target price: US$4.84 an attractive investment opportunity at current levels.
Current price: US$2.74

Price change We will reassess the ADR (1 ADR = 1 common share)1 rating for Qimonda after the company
(32.8%) announces its 3Q 08 results on 24 July 2008.
since last report:

European BUY We reiterate our current BUY rating for the EDR in line with the company’s fundamentals and our
revised expectation of a positive currency impact on the EDR over the medium term.
Depository
Receipt2
Ticker: QI1Ay.F
Target price: €2.85
Current price: €1.57 We will reassess the EDR (1 EDR = 1 common share)1 rating for Qimonda after the company
announces its 3Q 08 results on 24 July 2008.
Price change (40.8%)
since last report:

Supervisor: Shilpen Shah

Analyst: Shazia Naik Investment horizon - short term actionable trading strategies
Editor: Heloise Capon This report addresses the needs of strategic investors with a long term investment horizon of 6-12 months. If this
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Next news due:

3Q 08 results, 24 July 2008
In our 2Q 08 update report dated 23 May 2008, we upgraded the Qimonda ADR rating from a HOLD to
a BUY on fundamental grounds with a 6-12 month target of US$4.84, indicating a 19% upside. The
stock price has since declined 32.8%.

However, the ADR appreciated 16.1% in a single trading session to close at US$2.74 on 02 July 2008.
We believe that this appreciation is attributable to new reports of an expected recovery in DRAM prices
by the end of September 2008. According to the 02 July 2008 news reports on Bloomberg, leading
market researcher Dramexchange.com expects a reduction in production at memory manufacturer
Rexchip, which had ramped up production in 1H 08 contributing to market oversupply, and an
anticipated improvement in demand in China following the Olympic Games, to result in a recovery in
prices. News of the anticipated price recovery is in line with our existing expectations of a recovery in
prices in 2H 08. However, we prefer to maintain a conservative outlook regarding the extent of price
recovery and maintain our reservations of Qimonda achieving profitability in the near term.
Nevertheless, given the recent decline in the ADR price, we believe the stock offers an attractive
investment opportunity at current levels and maintain our current BUY rating for the Qimonda ADR.

Page 1 Refer to page 2 for footnotes