Infineon Technologies (IFNNF, Financial) has been identified as one of the key partners supplying power IC solutions for Nvidia's latest advancement in AI data center infrastructure. Nvidia recently detailed their 800V high voltage DC power architecture, which is designed for next-generation AI data centers, highlighting Infineon alongside other semiconductor firms. Although Infineon, Navitas, and Texas Instruments collaborated on press releases related to this announcement, further specifics were not provided beyond Nvidia's initial blog post.
Industry experts anticipate significant growth for Infineon, given the rising power demands in AI data centers projected to need megawatt-scale capacities by 2027. This technological progress positions Infineon to potentially capture increased market opportunities as these infrastructure upgrades are implemented.
IFNNF Key Business Developments
Release Date: May 08, 2025
- Revenue: EUR3.591 billion, up 5% compared to the previous quarter.
- Segment Result: EUR601 million with a segment result margin of 16.7%.
- Automotive Revenue: EUR1.858 billion, reflecting a 6% sequential growth.
- Automotive Segment Result: EUR385 million, with a segment result margin of 20.7%.
- Green Industrial Power Revenue: EUR397 million, a 17% increase quarter-over-quarter.
- Green Industrial Power Segment Result: EUR38 million, with a segment result margin of 10%.
- Power & Sensor Systems Revenue: EUR979 million, flat compared to the previous quarter.
- Power & Sensor Systems Segment Result: EUR138 million, with a segment result margin of 14.1%.
- Connected Secure Systems Revenue: EUR356 million, a 3% increase compared to the previous quarter.
- Connected Secure Systems Segment Result: EUR40 million, with a segment result margin of 11.2%.
- Gross Margin: Adjusted gross margin at 40.9%, reported gross margin at 38.7%.
- Research and Development Expenses: EUR559 million, up from EUR544 million in the previous quarter.
- Selling, General and Administrative Expenses: EUR376 million, down from EUR395 million.
- Free Cash Flow: Improved to EUR174 million from EUR237 million in the previous quarter.
- Order Backlog: Approximately EUR20 billion, constant quarter-over-quarter.
- CapEx: EUR470 million, down from EUR731 million in the previous quarter.
- Net Leverage: 1.1 times.
- Effective Tax Rate: 22%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Infineon Technologies AG (IFNNF, Financial) reported a 5% increase in revenues for the March quarter, reaching EUR3.591 billion.
- The Automotive segment achieved healthy sequential growth of 6%, with revenues of EUR1.858 billion, confirming improvement in inventory digestion.
- Infineon remains the number one global automotive semiconductor provider with a market share of 13.5%, and has improved its regional positions.
- The company announced the strategic acquisition of Marvell's automotive Ethernet business for $2.5 billion, expected to strengthen its market-leading microcontroller franchise.
- Infineon is making significant strides in sustainability, with its SECORA Pay Green solution recognized by Mastercard for sustainable payment technologies.
Negative Points
- The geopolitical environment has become more volatile, with U.S. import tariffs likely to create headwinds for global vehicle production.
- Infineon revised its revenue outlook for fiscal 2025 to slightly down due to potential tariff-related demand effects and adverse currency impacts.
- The Green Industrial Power segment's revenue level is 15% below last year's, indicating a slow recovery in industrial markets.
- Pricing pressures persist in the industrial markets, particularly for standard power components in China, affecting market expansion.
- Idle charges in the second half of the fiscal year are expected to be higher than previously anticipated, constituting a margin headwind.
