Infineon says shutdowns, US storms holding back sales growth


LONDON • Infineon Technologies AG said manufacturing constraints at its sites in Malaysia and Texas are holding back its ability to grow revenue, despite a global shortage in semiconductors.

Revenue rose 25% to €2.72 billion (RM13.7 billion) in the third quarter (3Q) from a year earlier, the company said in a statement yesterday.

That compared with the average €2.78 billion estimate of analysts surveyed by Bloomberg.

Automotive, and power and sensor systems were primarily affected, and the company was only able to increase its sales by 1% from the previous quarter even with heavy demand, Infineon said.

Malaysian production capacity was held back by Covid-19-related measures and the company is still dealing with the aftermath of the winter storm in Texas.

“Inventories are at a historic low; our chips are being shipped from our fabs straight into the end applications,” CEO Reinhard Ploss said in the statement.

“Under these circumstances, any pandemic-related restrictions on manufacturing, such as those recently imposed in Malaysia, are especially grave.”

The company said full-year sales are expected to hit €11 billion, matching the average analyst forecast.

Manufacturing bottlenecks in Malaysia are likely to continue to weigh on sales in the 4Q, the company said.

Net income in the fiscal 3Q, which ended in June, hit €245 million.

The company is a major supplier to automakers, which have been hard hit by a global chip shortage caused by a combination of diminished manufacturing capabilities during the Covid-19 pandemic and underestimated demand.

The shortage has led to sales growth across the industry, as electronics makers bought up as many chips as semiconductor companies could produce.

Infineon’s chief marketing officer Helmut Gassel said in May that the shortage would prevent about 2.5 million cars from being built in the first two quarters.

In response, Infineon and others are working to increase manufacturing capabilities.

The world’s top chipmaker, Taiwan Semiconductor Manufacturing Co, is spending US$100 billion (RM422 billion) over three years to meet surging demand.

This reaction has stoked some concerns that the industry will overshoot demand. Last month, Texas Instruments Inc warned that revenue could fall short of some analysts’ estimates.