The company in December secured a 325-million-euro (450-million-dollar) rescue package from the German state of Saxony, the federal government and a Portuguese development bank and Qimonda's majority shareholder Infineon.

But sources told Dow Jones Newswires on Thursday that the firm, which has been in trouble since before the global economy hit the rocks, still needed another 300 million euros to be able to continue operating.

An additional 280 million euros in guarantees from the federal government and from Saxony, the eastern state where the firm is a major employer, were also contingent on its raising the funds.

The economically depressed east state of Saxony, where Qimonda is a major employer, refused to put up another 150 million euros and talks in Berlin with Chancellor Angela Merkel's federal government also reportedly failed.

Media reports said that firm had been unable to present a convincing concept of how it intended to survive.

Qimonda makes dynamic random access memory (DRAM) semiconductors, but it has struggled to compete against larger rivals and stiff competition from Asia, where production costs are lower. Prices for the chips are also highly volatile.

Infineon, a former subsidiary of German industrial conglomerate Siemens, last month issued a highly gloomy report for itself and Qimonda, notching up a loss of three billion euros for its financial year ending September 30.

In October Qimonda said it was cutting almost a fifth of its workforce or 3,000 jobs.

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