German chip giant lowers 2024 forecast as electronics slowdown bites

German chip giant lowers 2024 forecast as electronics slowdown bites
German chip giant lowers 2024 forecast as electronics slowdown bites

Infineon, one of the biggest chip makers in Europe, has lowered its revenue outlook for the year, citing “weak” demand from its major target markets.

The German company is now expecting a revenue of €15.1bn, plus or minus €400mn. That’s down from the previous forecast of €16bn, plus or minus €500mn.

In the second quarter of 2024, Infineon saw a 2% drop in revenue compared to the previous quarter, generating €3.36bn. The decline stands, however, at 12% year-on-year.

Revenue in the first quarter of 2024 also decreased by 11% compared to the last quarter of 2023.

Jochen Hanebeck, Infineon’s CEO, attributes this year’s more conservative earnings forecast to “a prevailing difficult market environment.”

“Many end markets have remained weak due to economic conditions, while customers and distributors have continued to reduce semiconductor inventory levels,” Hanebeck said in a statement.

This includes the automotive sector, consumer electronics, and the decarbonisation industry — three of Infineon’s key markets.

To increase its competitiveness, the chip manufacturer is launching measures on productivity, operating cost optimisation, and portfolio management.

Amid a slowdown for the chip market, Infineon is joining a growing number of semiconductor companies struggling with profit drops.

Just last month, chip giant ASML also reported a decrease in sales and earnings for Q1 2024, stressing the challenging economic environment and the industry’s donwturn.

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