FRANKFURT: Infineon Technologies AG has issued an upbeat revenue outlook for the current quarter, beating analyst estimates on the back of firm data‑centre chip demand and improved pricing.
Revenue in the fourth fiscal quarter, which ends in September, is set to come in at around €4.7bil (US$5.4bil), Infineon said in a statement yesterday.
That compares to an average analyst estimate of €4.6bil, according to data compiled by Bloomberg.
“Our power supply solutions for artificial intelligence (AI) data centres remain in very high demand and continue to be our most important growth driver,” chief executive officer Jochen Hanebeck said in the statement.
The results may help alleviate concerns about the sustainability of the current AI spending blitz and intensifying competition from China.
Investor fears about inflated chip stock valuations deepened a selloff in recent weeks, hitting shares in competitors, including Texas Instruments Inc, STMicro-electronics NV and NXP Semiconductors NV, even after they raised their earnings forecasts. Infineon’s stock has risen 69% so far this year.
Infineon said that several customers in the AI data centre sector are negotiating for or have reserved capacity over multiple years.
These agreements have a cumulative revenue volume of a high single-digit billion euro amount, according to the company.
“The company looks well-positioned to remain the leading player in AI power,” JPMorgan analysts including Sandeep Deshpande wrote in a note before earnings.
Demand has improved across all business segments, including moderate growth in the automotive sector, according to Infineon.
The company confirmed its June guidance of adjusted gross margin for the fiscal year in the low-to-mid 40s percentage range. It expects full-year revenue of around €16.3bil.
Third quarter revenue was €4.17bil, compared to an average analyst estimate of €4.13bil. The company increased prices for some chips in April and July.
While the car industry has been traditionally the most important market for Infineon, long with its European peers STMicroelectronics and NXP, the companies are now increasingly benefitting from demand for AI infrastructure. — Bloomberg
