By Mauro Orru
Infineon Technologies expects sales to grow in the new fiscal year as demand for chips powering artificial-intelligence data centers shows no sign of abating.
The German chip maker said revenue in the year to the end of September 2026 should increase moderately from the 14.66 billion euros it reported for fiscal 2025. Its segment result margin--a key profitability measure--is expected to come in a high-teens percentage range compared with 17.5% in fiscal 2025.
The projected return to growth after two fiscal years of lower sales comes as global investments in AI infrastructure keep rising. Chips that power AI data centers have been in high demand since the viral release of ChatGPT in late 2022.
Infineon is betting that AI demand will continue to grow strongly, lifting orders and sales. The company raised its AI revenue target to about 1.5 billion euros in fiscal 2026 from 1 billion euros previously.
The upgrade comes as Infineon seeks to turn the page on a protracted downturn in demand for less sophisticated chips used in cars, industrial machinery and consumer electronics.
Automakers and their suppliers have been digesting chip inventories they built at the height of the pandemic, weighing on new orders. Infineon is particularly exposed to carmakers as its automotive business generally accounts for the lion's share of annual sales. The company expects sales at its automotive business to grow more slowly than at other units in the new fiscal year.
"Growth momentum in the automotive, industrial and consumer markets remains modest," Chief Executive Jochen Hanebeck said. "Many customers are proceeding cautiously and placing short-term orders."
Infineon and its rivals have had to contend with subdued demand in those markets for years, though signs of a recovery have emerged recently. Last month, Tesla supplier STMicroelectronics said all end-markets except automotive were back to year-on-year growth as it forecast lower sales for 2025. Meanwhile, Texas Instruments said the recovery in the semiconductor market was progressing at a slower pace than in previous downturns.
Infineon said it would propose a dividend of 0.35 euros a share for fiscal 2025 at its annual general meeting in February, stable from the prior year.
The company posted 3.94 billion euros ($4.53 billion) in sales for the three months to the end of September, up 1% on year. Analysts had forecast quarterly sales of 3.91 billion euros, according to a Vara Research consensus.
Infineon swung to a quarterly net profit of 231 million euros from a net loss of 84 million euros a year earlier. However, its segment result slipped to 717 million euros from 832 million euros, generating an 18.2% margin.
Analysts had forecast a net profit of 467 million euros, a segment result of 733 million euros and an 18.8% margin, according to the consensus.
For the current quarter, Infineon is expecting sales of around 3.6 billion euros and a segment result margin in a mid-to-high-teens percentage range.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
November 12, 2025 02:37 ET (07:37 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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