Infineon Revised Projections and Industry Challenges
Infineon, the eminent German semiconductor manufacturer (IFXGn.DE), has recalibrated its annual revenue projections, signaling a second-quarter revenue below market expectations. The company attributes this adjustment to the impact of subdued industry demand on its initial quarterly results.
The updated full-year revenue target is now set at 16 billion euros ($17.20 billion), with a fluctuation margin of plus or minus 500 million euros. This marks a departure from the previous projection of 17 billion euros, maintaining a similar margin. A significant portion of this modification is associated with adjustments in the assumed exchange rate, transitioning from $1.05 to $1.10.
In conjunction with the revenue outlook, Infineon has fine-tuned its anticipated margin for the year, expecting it to fall within the low to mid-twenties percentage range. This contrasts with the earlier guidance of approximately 24%, leading to a premarket trade decline of around 5% in Infineon shares on Lang & Schwarz.
Global Semiconductor Challenges
The semiconductor industry, grappling with challenges amid global economic uncertainties, witnesses a dip in demand for chips across diverse devices, spanning from tablets and cellphones to automobiles.
Looking forward to the second quarter, Infineon predicts revenue of 3.6 billion euros, falling short of the initial estimate of 4.02 billion euros. This aligns with recent guidance updates from industry peers such as STMicroelectronics and Texas Instruments, raising concerns about a potential downturn in the automotive chip sector.
Despite a dip in revenue within its automotive segment during the fiscal first quarter ending Dec. 31, Infineon remains resolute in its full-year forecast, navigating through a deceleration in demand from the electric vehicle sector outside China.
The first-quarter revenue witnessed an 11% decline compared to the previous quarter, totaling 3.7 billion euros, below the 3.84 billion estimated in a survey of analysts provided by the company.
Acknowledging challenges in consumer electronics, communication, computing, and IoT applications, CEO Jochen Hanebeck anticipates a discernible recovery in demand in these sectors only in the second half of the calendar year.
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