Qimonda AG, the German chipmaker that has filed for insolvency protection, has begun reducing production at its plant in Dresden to about one quarter of capacity, cutting the amount of silicon wafers it processes.

Michael Jaffe, the insolvency lawyer for Qimonda AG, will fly to Asia by the end of this week to meet potential investors for the German memory-chip maker.

Qimonda will shut its only U.S. plant with the loss of around 1,500 jobs, the insolvent German memory chip maker said on Tuesday, adding it faced liquidation if it cannot find investors with deep pockets.

Qimonda has four weeks to find an investor to save the core of its insolvent memory chip business before having to close production and dismiss 12,000 workers, say people close to the company. Rival chipmakers have shown the "first signs of interest" in Qimonda, since it filed for insolvency last week.

The collapse of German chip-maker Qimonda into insolvency sparked worries over its parent company Infineon. Qimonda has more than 12,000 workers worldwide, with some 3,500 in Saxony, 1,500 in Munich and several thousand in Portugal. Its New York-listed shares have fallen 95.0% over the past year, while Infineon's Frankfurt shares have fallen 88.2%.

Qimonda AG, the distressed German memory-chip maker majority-owned by Infineon Technologies AG, on Friday said it has filed for bankruptcy, barely a month after it secured 325 million euros ($422 million) in emergency loans.

Flextronics, a contract manufacturer that supplies about 75% of Nortel's finished product around the world, warned last week it is working to reduce its exposure to the Toronto-based company after Nortel filed for court protection from creditors.

Nortel Networks Corp, North America's biggest telephone equipment maker, filed for bankruptcy on Wednesday, hoping to save a once highflying business whose decade-long decline has accelerated with the global economic crisis.

Company bankruptcies in Japan jumped 24.7% in December from a year earlier, as the financial crisis pummelled the world's second-largest economy.

Factories in China and India joined much of Europe in slashing output and jobs at a record pace in December, another sign the biggest emerging markets were wilting under the recession gripping industrialized nations. "It feels like we've passed through the eye of the storm," Robert Rennie, chief currency strategist at Westpac in Sydney said of the financial crisis triggered by US bank failures last year.