Infineon: Revenue to decline in fiscal year 2025, with excess inventory of automotive chips
Nov 13,2024
Infineon announced in a statement on Tuesday (November 12) that it expects its revenue for the 2025 fiscal year to "slightly decrease" from the 14.96 billion euros ($15.9 billion) for the 2024 fiscal year ending at the end of September this year. By comparison, the average analyst expectation is 15.75 billion euros. This indicates that demand from European and American automotive customers will continue to be sluggish.
Infineon is the first major European chip manufacturer to announce its 2025 performance expectations, with sales from the automotive industry accounting for over half of its revenue. Despite the booming demand for artificial intelligence (AI) chips, other areas of the semiconductor industry are struggling.
Currently, apart from artificial intelligence, our end market has almost no growth momentum, and cyclical recovery is being delayed. Therefore, we are preparing for a sluggish business trajectory in 2025, "said Jochen Hanebeck, CEO of Infineon, in a statement
According to a statement, the management's preferred measure of operational profitability - departmental performance profit margin - is expected to decrease from 20.8% to between 15% and slightly below 20% in fiscal year 2025.
Infineon announced a revenue of 3.919 billion euros for the fourth quarter of 2024, a decrease of 6% compared to the same period last year, which is basically consistent with the company's forecast of 4 billion euros, but lower than the average analyst expectation of 3.98 billion euros. The departmental performance profit margin was 21.2%, compared to 25.2% in the same period last year.
In the fiscal year 2024, due to the failure of the expected recovery in the automotive industry, Infineon has lowered its revenue forecast three times.
The statement stated that the revenue for the first quarter of 2025 is approximately 3.2 billion euros, with a departmental profit margin of around 15%. Analysts have an average expectation of 3.8 billion euros for this fiscal quarter.
The company plans to invest approximately 2.5 billion euros in fiscal year 2025, with a focus on its Dresden factory in Germany, for intelligent power technology used in applications such as powering artificial intelligence.
Infineon's Chief Financial Officer Sven Schneider stated in an interview that European car manufacturers find it difficult to compete with cheap Chinese models, and the electric vehicle market has also impacted peers such as STMicroelectronics and NXP Semiconductors. Due to still weak demand, the industry still faces the problem of excess chip inventory.
The European Commission has warned that chip manufacturers on the European continent face the risk of losing market share in more mature semiconductor markets.
Infineon is the first major European chip manufacturer to announce its 2025 performance expectations, with sales from the automotive industry accounting for over half of its revenue. Despite the booming demand for artificial intelligence (AI) chips, other areas of the semiconductor industry are struggling.
Currently, apart from artificial intelligence, our end market has almost no growth momentum, and cyclical recovery is being delayed. Therefore, we are preparing for a sluggish business trajectory in 2025, "said Jochen Hanebeck, CEO of Infineon, in a statement
According to a statement, the management's preferred measure of operational profitability - departmental performance profit margin - is expected to decrease from 20.8% to between 15% and slightly below 20% in fiscal year 2025.
Infineon announced a revenue of 3.919 billion euros for the fourth quarter of 2024, a decrease of 6% compared to the same period last year, which is basically consistent with the company's forecast of 4 billion euros, but lower than the average analyst expectation of 3.98 billion euros. The departmental performance profit margin was 21.2%, compared to 25.2% in the same period last year.
In the fiscal year 2024, due to the failure of the expected recovery in the automotive industry, Infineon has lowered its revenue forecast three times.
The statement stated that the revenue for the first quarter of 2025 is approximately 3.2 billion euros, with a departmental profit margin of around 15%. Analysts have an average expectation of 3.8 billion euros for this fiscal quarter.
The company plans to invest approximately 2.5 billion euros in fiscal year 2025, with a focus on its Dresden factory in Germany, for intelligent power technology used in applications such as powering artificial intelligence.
Infineon's Chief Financial Officer Sven Schneider stated in an interview that European car manufacturers find it difficult to compete with cheap Chinese models, and the electric vehicle market has also impacted peers such as STMicroelectronics and NXP Semiconductors. Due to still weak demand, the industry still faces the problem of excess chip inventory.
The European Commission has warned that chip manufacturers on the European continent face the risk of losing market share in more mature semiconductor markets.