Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Infineon Technologies AG (IFNNF, Financial) reported revenue and margin numbers slightly ahead of expectations for the December quarter, with group revenues amounting to EUR3.424 billion.
- The company has a strong position in the automotive semiconductor market, with significant design wins and increased orders, particularly in China.
- Infineon is experiencing strong growth in its silicon carbide market, outpacing other established players and securing major design wins.
- The company is well-positioned in the AI server power solutions market, with expectations to achieve around EUR600 million in AI-related revenue this fiscal year.
- Infineon is implementing its Step Up Initiative, which is expected to yield significant financial benefits in the coming years, contributing to improved structural profitability.
Negative Points
- Infineon Technologies AG (IFNNF) is facing cyclical market headwinds, particularly in the automotive and industrial sectors, with ongoing inventory corrections.
- The company's Green Industrial Power division experienced a steep revenue decline of 32% due to weak market momentum and elevated supply chain inventories.
- The Connected Secure Systems segment saw a 15% revenue decline, reflecting ongoing weakness in consumer and IoT markets.
- Infineon is dealing with high idle charges due to underutilized capacities, which are expected to be a margin headwind of around 500 basis points for the fiscal year.
- The company faces uncertainties from geopolitical tensions and potential trade conflicts, which could impact customer demand and overall business performance.
Q & A Highlights
Q: Can you discuss the dynamics of the automotive market, particularly in China, and what gives you confidence in the trajectory into 2025?
A: Jochen Hanebeck, CEO, explained that Infineon's strong position is due to its exposure to growth drivers like AI and xEV in China. The company has a broad customer base and does not rely heavily on individual customers, which provides stability. Infineon saw a 10% quarter-on-quarter increase in automotive revenue in China, reaching an all-time high.
Q: Are you expecting growth in silicon carbide for 2025, and what are the dynamics behind it?
A: Jochen Hanebeck confirmed that Infineon expects low double-digit growth in silicon carbide for 2025. The company has a broad customer base and applications, with significant success in automotive silicon carbide, particularly in China.
Q: Can you elaborate on the AI server power side and your market share expectations?
A: Andreas Urschitz, Chief Marketing Officer, highlighted Infineon's unique position in providing complete power flow solutions for AI servers. The company is ahead of competitors due to its comprehensive portfolio, including silicon, silicon carbide, and gallium nitride. Infineon expects to continue gaining market share in AI power solutions.
Q: How does the current FX environment impact your full-year guidance, and are there any potential upsides?
A: Sven Schneider, CFO, explained that the stronger US dollar adds approximately EUR450 million to the top line. While the guidance remains cautious due to geopolitical uncertainties, the stronger dollar increases the likelihood of achieving the higher end of the margin range.
Q: What is your outlook for EVs and hybrids in FY25, and how does it translate into revenue for Infineon?
A: Jo
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
