By Mauro Orru
Infineon Technologies raised its sales and margin forecasts for the fiscal year as artificial intelligence continues to fuel demand for semiconductors.
The German chip maker said revenue for the year to the end of September should grow significantly from the 14.66 billion euros ($17.14 billion) it reported for fiscal 2025, compared with a prior forecast of a moderate increase. Meanwhile, its segment result margin--a closely watched profitability metric--is expected to climb to around 20% from 17.5% last year, compared with previous guidance of a margin in a high-teens percentage range.
Chief Executive Jochen Hanebeck said Infineon would grow more strongly than previously expected in the second half thanks to solid semiconductor demand across many end markets, particularly AI.
The AI race has unleashed an unrelenting wave of investments as companies seek to build out the data centers needed to power the energy-intensive technology, driving demand for increasingly advanced chips for AI infrastructure.
"The AI boom strengthens further, and our power supply solutions for AI data centers are in very high demand. The expansion of power infrastructure is gaining momentum and is becoming an increasingly important growth driver for our industrial business," Hanebeck said.
In a sign of how promising AI has become to the fortunes of semiconductor suppliers, Infineon in November lifted its AI revenue target for the fiscal year through September 2026 to around 1.5 billion euros from 1 billion euros. In February, it said that AI revenue should grow to roughly 2.5 billion euros in fiscal 2027.
The AI boom represents an opportunity for a semiconductor industry that has faced years of weak demand from carmakers and their suppliers as they slowly digested chip inventories they built at the height of the pandemic. The industry remains a key end market for companies like Infineon as its automotive business still accounts for the lion's share of sales.
"In automotive, we are seeing positive developments, especially in software-defined vehicles, dampened by a challenging high-voltage business for e-mobility," Hanebeck said. "Further market share gains in Automotive confirm we are overall on the right track."
Infineon said that the number of divisions--automotive, green industrial power, power and sensor systems, and connected secure systems--would be reduced to three as of July 1 to better allocate responsibilities. The new structure will consist of automotive, power systems, and edge systems.
Revenue for the three months to the end of March grew 6% from a year earlier to 3.81 billion euros. Analysts had forecast quarterly revenue of 3.82 billion euros, according to Vara Research.
Infineon's net profit increased to 301 million euros from 232 million euros a year earlier. Its segment result grew to 653 million euros from 601 million euros, generating a 17.1% segment-result margin. Analysts had forecast a net profit of 334 million euros, a segment result of 677 million euros and a 17.7% segment-result margin, according to Vara Research.
The company said that revenue in the quarter through June should come in at roughly 4.1 billion euros, up from 3.70 billion euros a year earlier. Infineon's segment result margin is expected to be in the high-teens percentage range.
Write to Mauro Orru at mauro.orru@wsj.com
(END) Dow Jones Newswires
May 06, 2026 02:29 ET (06:29 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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