Infineon beats quarterly forecast, raises 2025 outlook

Chip company Infineon Technologies AG (Munich, Germany) has beaten its own revenue forecast for its first quarter fiscal year 2025 and raised its outlook for the fiscal year.

Infineon did suffer from its exposure to automotive and industrial markets, similarly to STMicroelectronics and NXP, but by beating its estimate was able to provide a little brightness in an otherwise dismal results season. But 2025 will be a tough a year with the outlook raise being based on a currency exchange rate change.

Infineon announced 1QFY25 revenue of €3,424 million, significantly above the guidance of €3.2 billion, but down 13 percent sequentially and down 8 percent compared with the same quarter a year before. The company was able to swing to a net profit of €246 million compared with a loss in the previous quarter.

As has been the pattern across other major European chip companies, the various Infineon business units all showed declining sales and – with one exception – reduced contributions to profit.

Infineon’s automotive business achieved revenue of €1,919 million in 1QFY25, an 11 percent sequential decline. The Green Industrial segment revenue declined by 32 percent to €340 million. This sharp decline was due to inventory build up, Infineon said.

Power & Sensor Systems achieved revenue of €820 million, down 5 percent. It was able to expand its segment result partly due to a compensation payment from a customer of a mid-double-digit euro millions amount.

The Connected Secure System segment achieved revenue of €344 million, down 15 percent sequentially primarily due to lower sale of payment cards and weaknesses in some consumer applications, Infineon said.

CEO Hanebeck says

“Infineon has held up well in a weak market environment, closing its first quarter slightly ahead of expectations,” said Jochen Hanebeck, CEO of Infineon, in a statement. “Against a continued uncertain economic backdrop, our business trajectory in this fiscal year is following the pattern we expected: Following the expected inventory reduction, we continue to anticipate that the recovery in demand will be gradual for the current fiscal year. The positive stand-out is the move towards increased use of artificial intelligence, which is driving demand for our leading power supply solutions for AI data centers. This is a prime example of our long-term growth drivers, digitalization and decarbonization,” he added.

The outlook for 2QFY25 is set at €3.6 billion on the assumption of  an exchange rate of US$1.05 to the euro. This is flat with the 2QFY24 revenue of €3,632 million of a year before.

For the whole year the change in the assumed exchange rate from US$1.10 to the euro down to US$1.05 lifted the full year forecast. Full fiscal 2025 revenue is now expected to be slightly above the €14,995 million recorded for FY24 rather than slightly below.