Infineon lowers guidance amid broader slump in chip demand
INFINEON Technologies guided lower-than-expected revenue this year as the German chipmaker is hit by a broader slump in semiconductor demand from industrial customers.
Revenue is expected to be 15.5 billion euros (US$16.7 billion) to 16.5 billion euros, lower than previous guidance of 16.5 billion euros to 17.5 billion euros, the German chipmaker said in a statement on Tuesday (Feb 6). That compared to the 16.8 billion euros average analyst estimate, according to a consensus compiled by Bloomberg.
The second quarter is expected to be particularly difficult with a “noticeable decline” in sales for power and sensor chips for industrial applications.
Sales for the industrial business are expected to fall to 3.6 billion euros in the quarter, missing the 4.06 billion euros average analyst estimate.
Infineon said its overall segment result margin is expected to be about 18 per cent, missing analysts’ estimates for 23.1 per cent.
Infineon is the latest industrial semiconductor supplier to give weaker-than-expected guidance for this year, as a slowdown in industrial production also impacted competitors including STMicroelectronics and Texas Instruments.
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Demand for automotive chips, which typically account for more than 50 per cent of the company’s revenue, is expected to remain strong, with revenue growth in the low double-digit percentage range.
“In consumer, communication, computing and IoT applications, we are not anticipating a noticeable recovery in demand until the second half of the calendar year,” said Jochen Hanebeck, chief executive officer of Infineon.
Hanebeck added that the company’s expectations for the automotive market remains “virtually unchanged,” despite the slowdown in demand for electric vehicles.
Infineon shares gained 3.1 per cent to close at 34.66 euros in Frankfurt trading on Monday. The stock had declined 8.3 per cent this year. BLOOMBERG
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