What you need to know:
- DE) adjusted its full-year revenue forecast for the third time in recent months on Monday, following a disappointing third-quarter performance driven by sluggish demand.
- The company’s cost savings program, announced in May, is expected to begin positively impacting the segment result starting in the 2025 fiscal year.
German chipmaker Infineon (IFXGn.DE) adjusted its full-year revenue forecast for the third time in recent months on Monday, following a disappointing third-quarter performance driven by sluggish demand. The company reported revenue of €3.702 billion ($4.04 billion) for the April-June period, missing the €3.8 billion forecast and marking a 9% year-over-year decline.
Infineon now expects full-year revenue to be around €15 billion, revising its earlier guidance of €15.1 billion, plus or minus €400 million. The company’s shares dropped 4.5% in early trading in Frankfurt.
“The recovery in our target markets is progressing only slowly. Prolonged weak economic momentum has led to higher inventory levels, impacting end demand,” said Infineon Chief Executive Jochen Hanebeck.
Despite the revenue shortfall, Infineon maintained its outlook for the segment result margin, which came in above expectations at 19.8%. “In a challenging market environment, Infineon continues to perform well,” Hanebeck added.
The company’s cost savings program, announced in May, is expected to begin positively impacting the segment result starting in the 2025 fiscal year.
Infineon is not alone in facing weak demand. Rival STMicroelectronics (STMPA.PA) has also reduced its full-year revenue and margin forecasts, while U.S. chip giant Intel (INTC.O) has suspended dividends and cut its workforce as part of a costly turnaround strategy.
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