Whether electric car or wind turbine – the industry needs chips for almost every product. The market has always been subject to great fluctuations. The Munich manufacturer Infineon is feeling this.
The chip manufacturer Infineon is lowering its forecast due to weaker demand and the stronger euro. The group now expects sales of around 16 billion euros for the financial year ending September 30th, he announced. Infineon had previously promised a billion more. This would mean a drop in sales of around two percent compared to the previous year.
The past financial year went very well for Infineon – the board had dampened expectations early on. However, the chip market has developed weaker than expected. A weaker dollar, in turn, affects the group’s balance sheet because Infineon reports in euros, but many customers pay in dollars. In the first quarter, sales fell by eleven percent to 3.7 billion euros compared to the previous quarter. Net profit fell from 753 million to 587 million euros compared to the previous quarter.
Infineon makes chips for a range of industries including auto, renewable energy, information technology and consumer electronics. CEO Jochen Hanebeck assumes that demand for chips in “consumer-related applications” will increase noticeably in the second half of the calendar year. According to him, the car business is doing better thanks to high demand from Chinese electric car manufacturers. “The bottom line is that we expect a year of transition for Infineon.”
The Infineon boss emphasized his optimism for the medium and longer term prospects – based on the assumption that the need for chips for e-mobility, automated driving, renewable energies, artificial intelligence and the Internet of Things will continue to increase.
Infineon is now saving on investments: these will be reduced from 3.3 billion to 2.9 billion euros. Hanebeck emphasized that the group does not question the majority of its investments. “We stand clearly by our strategic projects and are sticking to our future investments,” said Hanebeck. Infineon is investing a lot of money, among other things, in expanding its location in Dresden and production in Malaysia.
Source: Stern
