Infineon is backtracking on the idea of selling its DRAM unit to Micron, a move that we reported earlier this week.

According to a report in the Financial Times, the company now favours an initial public offering of shares in the DRAM unit as an alternative to an outright sale.

The FT reports that the German chip maker's board is set to sanction the splitting off of the DRAM business at a meeting this Thursday. This would be a prelude to an initial public offering of the unit by summer 2006.

The report goes on to say that the possibility of selling off the DRAM unit had not been ruled out but the flotation option was the preferred course of action.