Infineon to cut €1bn as it lowers forecast
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Infineon Technologies has started a major cost cutting programme as it forecasts prolonged weakness in a number of electronics markets.
Infineon has launched a programme it calls ‘Step Up’ which aims to see almost €1bn of annual savings by 2027. The move comes as the company posted revenues of €7.2bn for the first six months of 2024, down 9% from €8.05bn in H1 2023.
“Many end markets have remained weak due to economic conditions, while customers and distributors have continued to reduce semiconductor inventory levels,” said Jochen Hanebeck, CEO of Infineon.
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The Q2 revenue was €3.632bn, down from €3.7bn in Q1 and €4.2bn from Q2 2023, with margins falling from 43% to 38%, indicating the pressure on pricing. The company expects Q3 to be around €3.8bn and now expects to generate revenue of around €15.1 billion plus or minus €400 million, down from the previous forecast of €16bn.
“Weak demand for consumer applications persists and there has also been a noticeable deceleration in growth in the automotive sector,” said Hanebeck.
In the Automotive segment, revenue growth in the low to mid-single-digit percentage range is now expected. A decrease in revenue in the Green Industrial Power segment is expected to be a low-teens percentage figure while the fall in revenue for Power & Sensor Systems is forecast to be in the high-teens and in the Connected Secure Systems segment in the low-twenties percentage range.
“We are therefore taking a cautious approach to the outlook for the rest of the fiscal year and are lowering our forecast,” he said.
“In order to realize the full potential of our Company, we will further strengthen our competitiveness. To this end, we are launching the company-wide “Step Up” programme. We are aiming to achieve structural improvements in our Segment Result in the high triple-digit million euro range per year.”
The programme includes various packages of measures focusing on the areas of manufacturing productivity, portfolio management, pricing quality and operating cost optimization, he says.
It is trimming its capex investments from $2.9bn to €2.8bn but is committed to its silicon carbide fab in Kulim, Malaysia and an analog and mixed signal expansion at Dresden, Germany..
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