Germany's central government and the state of Saxony also teamed up to guarantee an additional amount of €280 million for Qimonda. The chip maker is in talks to draw on €150 million of that amount immediately.

The financial package, which includes a loan of €150 million from the state of Saxony, a €100 million loan from an unnamed financial institution in Portugal and a €75 million loan from Infineon, is aimed at giving Qimonda a chance to revamp its finances and finish ramping up new production technology to volume levels, Qimonda said in a statement.

In return for the deal, Qimonda pledged to continue to invest in its research and development and manufacturing sites in Porto, Portugal and Dresden, in the state of Saxony, Germany.

Infineon, which owns 77.5 percent of Qimonda's stock, thanked the various government offices for their "generous support."

"This is good news for the employees of our subsidiary Qimonda before the Christmas season," said Peter Bauer, CEO of Infineon, in a statement.