BenQ said it was closing its German mobile phone division just a year after buying it from German group Siemens and was assessing its activities in other countries including Brazil.
BenQ Mobile GmbH is considering filing for insolvency in the next few days, a statement from the company said.
"Due to the discontinuation of further financial support from the parent company, BenQ, and the resulting lack of liquidity and implicated disruption to business, BenQ Mobile in Germany will file for insolvency at the local court in Munich within the next few days."
The decision will affect a total of 3,000 employees at production sites in the southern city of Munich and at Kamp-Lintfort and Bocholt in western Germany.
"Other subsidiaries in Brazil and other locations are reviewing their financial position," the statement said, without giving more details.
BenQ is struggling to establish itself in the mobile phone market in which it trails behind Nokia, Motorola and Samsung.
BnQ boss K.Y. Lee said: "Since October 2005, we have committed and invested an inordinate amount of capital and resources into our German mobile phone subsidiary.
"We have worked alongside our German colleagues from the beginning and were able to achieve quite a number of milestones.
"Despite the progress achieved in reducing cost and expenses, widening losses have made this very painful decision unavoidable."
BenQ plans to continue its global mobile business under the brand of BenQ-Siemens, and continue to utilise its associated research and development facilities, as well as production facilities, in Asia.