© Reuters. FILE PHOTO: A general view of construction site next to Infineon Technologies AG building on the day of German Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock’s visit, in Dresden, Germany July 13, 2023. REUTERS/Annegret Hilse/file ph
BERLIN (Reuters) -German chipmaker Infineon (ETR:) (OTC:) said on Thursday it was massively increasing its investment in its Malaysia plant while reporting slightly better-than-expected quarterly revenue in a semiconductor market where trends remain a mixed picture.
Infineon, whose chips are used in cars and data centres, reported third-quarter revenue of 4.09 billion euros ($4.47 billion), up 13% from the same period last year and slightly above expectations of 4.05 billion euros in a company-provided consensus of analysts.
Shares in Lang & Schwarz premarket trade were down 2.7% after the results were released.
“Semiconductor market trends continue to present a mixed picture with both light and shade,” said Chief Executive Jochen Hanebeck, with demand high in electromobility and renewable energy but low for consumer products like PCs and smartphones.
For the full year, Infineon expects investments amounting to approximately 3 billion euros.
One investment focus is construction at its site in Malaysia, where it said on Thursday it plans to build the world’s largest 200-mm SiC Power Fab.
The planned expansion of the Kulim fab is backed by customer commitments covering about 5 billion euros and about 1 billion euros in pre-payments, said Infineon, which said it would invest up to an additional 5 billion euros over the next five years.
Ford and China’s Cherry and SAIC are among the first customers from the automotive sector, in additional to SolarEdge and three leading Chinese photovoltaic manufacturers.
“With the Kulim expansion, we will secure our leadership position in this market,” said Hanebeck.
The company expects the expanded facility – together with its plant in Villach, Austria – to generate annual revenues of 7 billion euros.
The company on Thursday confirmed its revenue outlook of around 16.2 billion euros, which it had raised in May.
Infineon’s third-quarter adjusted, or “segment”, result was down 10% from the previous quarter at 1.067 billion euros, while its margin came in slightly lower than expected, at 26.1%.
($1 = 0.9149 euros)