Infineon Technologies Raises Margin Forecast for the Fiscal Year
According to reports, Infineon Technologies raised its margin forecast for the fiscal year as demand for semiconductors powering vehicles, energy infrastructure, and artificial-intelligence data centers is on the rise.
The German chip maker says it expects revenue of around 14.60 billion euros ($16.90 billion) in the fiscal year to the end of September, compared with nearly 14.96 billion euros it reported a year earlier. The company previously warned sales would be slightly lower, but hadn't provided a figure.
At the same time, Infineon's segment result margin--an important measure of profitability--is anticipated to fall within a high-teens percentage range, contrasting with earlier guidance in a mid-teens percentage range.
Infineon's stock in Frankfurt climbed over 3 percent on Tuesday morning. In an earnings call, Chief Executive Jochen Hanebeck stated that the effect of tariffs was milder than expected during the fiscal third quarter ending in June.
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The announcement follows only three months after the company lowered its sales and margin forecasts for the fiscal year, indicating it was eliminating 10 percent of the revenue it had initially projected for the last quarter due to the anticipated effects of tariffs.
Last month, President Trump reached an accord with the European Union in which the U.S. will impose a 15 percent tariff on the majority of EU exports.
The European Commission, the executive body of the bloc, stated that the 15 percent cap would apply to semiconductors even after Washington finalizes an inquiry under Section 232 of the Trade Expansion Act of 1962, which may lead to particular tariffs for the sector.
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However, the company continues to be susceptible to tariffs that the U.S. could impose on other countries due to the interconnected nature of supply chains. Years of reliable trade regulations have allowed chip manufacturers to create their designs in Europe and ship them for production to Asian hubs. Infineon conducts some production in China. It additionally launched a new facility in Malaysia last year.
"We and our clients are still finding our way through an unpredictable macroeconomic and geopolitical landscape," Hanebeck stated.