Infineon revealed revenue of 1.77 billion euro (about $1.93 billion) for the quarter ended March 31, representing growth of 7 percent compared to the previous quarter, and an increase of 10 percent year on year. Growth was largely fueled by increased sales in the automotive semiconductor segment, with industrial and power products also growing.
“Business at present is running extremely well, in the first quarter the market for Infineon developed very encouragingly and the trend continued from January to March,” said Infineon’s CEO, Reinhard Ploss. “The order situation is excellent and exceeds our early expectations. Against this backdrop, at the end of March we raised our forecast for earnings and revenue.”
As in previous quarters, Infineon’s automotive segment was the strongest, growing 11 percent over last quarter to 783 million euro (about $855 million) in revenue. “The increase was due to good demand for products in driver assistance systems and for hybrid and electric vehicles. In Europe and China in particular, many microcontrollers, power semiconductors and sensors were sold,” Ploss said, highlighting that an automotive boom in China has seen the market for semiconductors grow by 20 percent while Infineon’s share there has increased by almost 50 percent, allowing the company to expand on its position as number 2 in the market in that region.
Strategy Analytics’ latest figures estimate that Infineon’s share of the automotive semiconductor market worldwide has grown from 10.4 percent in 2015 to 10.7 percent in 2016, cementing the company’s position as No. 2 in the market behind NXP Semiconductors. Infineon’s increasing market share in automotive power semiconductors, sensors and microcontrollers all contributed.
Overall, sequential revenue growth of 1 to 5 percent is expected for the next financial quarter, while year on year revenue growth between 8 and 11 percent is forecast. Fiscal 2016-17 is expected to achieve the company’s highest profitability for six years, with growth in the automotive segment expected to be faster than the group average.
During a conference call about the results, Ploss also noted that customers were enthusiastic about the company’s first silicon carbide (SiC) MOSFET samples. “Customers’ positive feedback shows us that we are pursuing the correct strategy with our compound semiconductors,” Ploss said. “We expect that compound semiconductors based on SiC will be broadly successful in the market for solar inverters, while we have seen great interest for a whole series of industrial applications: charging stations for electric vehicles, uninterruptible power supplies, air conditioning units and automation.”
Asked about the failed acquisition of Wolfspeed (the deal was blocked in February by the Committee for Foreign Investment in the Unites States), Ploss replied that Infineon had continued developing its in-house SiC products in the mean time. While the company is confident of an “outstanding” position in the automotive sector for its SiC products, without access to Wolfspeed’s full compound semiconductor portfolio, a broader approach to product development for the next generations of SiC will be necessary.
“In this field, we will continue to grow organically and push developments in-house,” Ploss said. “We don’t believe that there are any other suitable potential [acquisition targets] at present. But that doesn’t mean that we won’t look around.” While Wolfspeed would have been the best fit, he said, the company is continuing to look for other options, with a priority on the U.S.
“We just have to heed the [regulatory] environment when tackling any further potential acquisitions,” he said. “That doesn’t mean that it’s impossible.”