The Infineon boss promises a strong increase in sales in the new fiscal year and a higher margin.
(Photo: Bloomberg)
Munich The chip boom will continue to drive Infineon in the fiscal year that has just begun. Sales will increase by around 15 percent, announced Europe’s largest semiconductor manufacturer on Tuesday. At the same time, the operating margin should climb to 20 percent. At the same time, the Dax group wants to invest significantly more.
“2022 will be a strong year. We are continuing on our path of profitable growth and sustainable value creation, ”explained CEO Reinhard Ploss. In the fiscal year that ended on September 30, revenues climbed to eleven billion euros, as forecast, and the operating margin had reached 18 percent.
For Ploss, the last full fiscal year at the top of Infineon began at the beginning of the month. The electrical engineer has been running the group since autumn 2012 and will be leaving on New Year’s Eve 2022. In the afternoon the manager will explain his plans for the coming months at an investor day.
The significantly increased investments are likely to meet with the greatest interest: Ploss plans to spend 2.4 billion on machines and factories in the new financial year; that is 800 million more than in the past fiscal year. It corresponds to around a fifth of the expected sales and is well above the target of 13 percent. It is about taking advantage of growth opportunities, the group justified the high investments.
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Infineon cannot deliver enough
For months now, Infineon has not been able to deliver as much as customers would like. The acute delivery bottlenecks are arguably the company’s biggest problem. However, the deficiency can only be partially resolved through your own investments. Because the Munich-based company does not get enough goods from contract manufacturers, the so-called foundries. These specialists produce the chips for corporations like Infineon that cannot or do not want to have their own factories in certain areas.
Above all, there is a lack of capacity for more mature technologies, complained CEO Reinhard Ploss in the summer. There is little the manager can do about that. The 65-year-old has to rely on foundries such as TSMC, Samsung and Globalfoundries to invest more. The corporations have promised that too. But it will take months before new machines are installed. Additional works will be ready in two to three years at the earliest.
However, Infineon must of course also expand its own plants in order to be able to meet the significantly increased demand. The company has just inaugurated its most modern factory in Villach. Infineon is investing 1.6 billion euros in the location in Carinthia.
Infineon is sticking to its long-term goals
However, Ploss is sticking to its long-term goals. Sales should increase by a good nine percent per year over an industry cycle. The operating margin should be 18 percent and the investment ratio 13 percent.
Investors have not been that convinced of Infineon for some time. Since the beginning of the year, the share price has climbed by around eight percent. In the last four weeks, however, the paper has given in about four percent and was most recently quoted at around 34 euros.
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