Infineon piles on European gloom with weak outlook for 2025

Business news | November 12, 2024

By Peter Clarke

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Infineon Technology AG (Munich, Germany) cast gloom on the Electronica trade show opening in its home town with a downbeat forecast for 2025 as it reported a loss the fourth quarter of its fiscal year.

“Currently, there is hardly any growth momentum in our end markets except from AI, the cyclical recovery is being delayed. The inventory correction is continuing,” said Jochen Hanebeck, CEO of Infineon, in a statement.

He added: “Short-term ordering patterns and inventory digestion are clouding visibility on demand trends beyond the next couple of quarters. We are therefore preparing for a muted business trajectory in 2025.”

Infineon’s guidance is similar to that of STMicroelectronics given a few days previously.

ST tips restructuring program and a weak start to 2025

Infineon made a net loss of €84 million on sales revenue of €3,919 million in the 4QfiscalY24.

Sales were up 6 percent sequentially but down 6 percent on the same quarter a year before. The loss was impacted by the settlement of a dispute with the insolvency estate of memory chip company Qimonda.

The outlook for 1QfiscalY25 was for a significant sequential drop in revenue to around €3.2 billion.

For the full fiscal year Infineon achieved revenue of €14.96 billion, down 8 percent on the prior year and for fiscal year 2025 Infineon gave the outlook of a “slight decline” compared to fiscal 2024.

Like most European chip companies Infineon is heavily exposed to automotive, industrial and communications infrastructure markets. With the exception of microcontrollers Infineon, like other European chip companies, has largely exited digital logic and high-performance computing. At the end of the fiscal year (September 30, 2024) Infineon had 58,060 employees.