Insolvent German chipmaker Qimonda will continue talks with potential investors beyond March and will reduce production to standby-mode by the end of this month, according to its insolvency administrator.

As anticipated, it will not be possible to reach a conclusive solution by the end of March, he said.

Qimonda has around 3,000 staff at its main European site in Dresden, the state capital of Saxony. It is expected to begin insolvency proceedings after it filed for insolvency in January.

That means, from next month on the company would have to cover all wage and salary payments itself, Jaffe said, adding production in Dresden will gradually be ramped down and put into standby mode by March 31, 2009.

Qimonda filed for insolvency after it said a 325 million euro ($418.3 million) rescue attempt by its home state of Saxony, parent company Infineon and a group of banks had not come in time.

Jaffe reiterated that Qimonda -- the world's fourth-biggest maker of DRAM chips -- would be liquidated if it could not find a financial investor.

Qimonda is suffering from a massive drop in prices for dynamic random access memory (DRAM) chips, its main product, and shares this with competitors such as Elpida and Samsung.

(Reporting by Nicola Leske)