Infineon Technologies AG shares rose after the German chipmaker said a hit from tariffs in the fourth fiscal quarter would be less than it anticipated and it forecast better-than-expected margins this year as the industry recovers from several quarters of depressed demand.
Infineon Chief executive officer Jochen Hanebeck said the company’s forecast in May — that tariffs would contribute to a 10 percent revenue reduction in the period — was too pessimistic.
The impact for the quarter ending next month “will be less pronounced than expected,” Hanebeck said on a call with reporters after the company’s financial results were released yesterday.
Photo: AFP
Profitability is also set to improve. Infineon raised its outlook for its segment result margin to a “high teens” percentage from “mid teens” for the year. The company also slightly raised the forecast for its adjusted gross margin in the fiscal year to at least 40 percent, from about 40 percent previously.
Infineon shares had risen 3.9 percent to 35.06 euros at 9:55am in Frankfurt trading. The stock has gained about 11 percent this year.
The industry is starting to recover from a supply glut that depressed sales for the past several quarters, blunting the impact of global trade issues, such as tariffs and a weaker US dollar.
Hanebeck said that while the oversupply is easing, “we and our customers are continuing to navigate our way through an uncertain macroeconomic and geopolitical situation.”
Still, Hanebeck said at an event at the company’s Dresden site with German Minister for Economic Affairs and Energy Katherina Reiche on Monday that some investments, particularly in the automotive industry, are being held back due to trade tensions.
Europe’s semiconductor industry is assessing the impact of tariffs, which were set at 15 percent following a trade agreement between the US and EU last week.
Revenue in the period ending next month would be flat from a year earlier at about 3.9 billion euros (US$4.5 billion), Infineon said in the statement.
That compares with an average analyst estimate of 4 billion euros, according to data compiled by Bloomberg.
The company expects revenue for the current fiscal year of 14.6 billion euros, compared with 14.96 billion euros last year.
Infineon previously said that revenue would be slightly lower this year.
There is a risk that demand might soften after some customers built up inventories before the levies were announced.
Texas Instruments Inc executives last month said they saw strong orders early in the second quarter, which then returned to more normal levels.
“While overall revenue trends are slightly below our and the market’s expectations, we believe this is mainly due to tariff uncertainty in the US and some signs of weakness in the Chinese car market,” Jefferies Group LLC analysts Janardan Menon and Om Bakhda wrote in a reaction to the results. “With tariff uncertainty subsiding, we remain positive on the cyclical and structural growth outlook, and further margin recovery.”
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Singapore-based ride-hailing and delivery giant Grab Holdings’ planned acquisition of Foodpanda’s Taiwan operations has yet to enter the formal review stage, as regulators await supplementary documents, the Fair Trade Commission (FTC) said yesterday. Acting FTC Chairman Chen Chih-min (陳志民) told the legislature’s Economics Committee that although Grab submitted its application on March 27, the case has not been officially accepted because required materials remain incomplete. Once the filing is finalized, the FTC would launch a formal probe into the deal, focusing on issues such as cross-shareholding and potential restrictions on market competition, Chen told lawmakers. Grab last month announced that it would acquire
Shares of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) have repeatedly hit new highs, but an equity analyst said the stock’s valuation remains within a reasonable range and any pullback would likely be technical. The contract chipmaker’s historical price-to-earnings (P/E) ratio has ranged between 20 and 30, Cathay Futures Consultant Co (國泰證期) analyst Tsai Ming-han (蔡明翰) told Central News Agency. With market consensus projecting that TSMC would post earnings per share of about NT$100 (US$3.17) this year, supported by strong global demand for artificial intelligence (AI) applications, and the stock currently trading at a P/E ratio of below 25, Tsai said the valuation
The artificial intelligence (AI) boom has triggered a seismic reshuffling of global equity markets, with Taiwan and South Korea muscling past European nations one by one. With its stock market now valued at nearly US$4.3 trillion, Taiwan surpassed the UK, Europe’s biggest market, earlier this month, data compiled by Bloomberg showed. South Korea is about US$140 billion away from doing the same. The tech-heavy Asian markets have shot past Germany and France in the past seven months. The shift is largely down to massive gains in shares of three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),
RSS