Company Reports

Narrow-moat Infineon Technologies reported decent fiscal second-quarter results amid a tough demand environment while providing investors with a soft forecast for the third quarter and reducing its guidance for fiscal 2024 (ending September). On the bright side, Infineon believes that June will be the bottom of an ongoing cyclical downturn in power semiconductors, which is commentary echoed by several peers in recent weeks. Further, Infineon disclosed its strong momentum in microcontroller revenue, which we believe is more insulated from the rise of Chinese chip development than its low- to mid-range power semiconductor business is. We believe these two factors are why the stock rose nearly 13% after the earnings report on May 7. We maintain our EUR 50/$54 fair value estimate and still view Infineon as one of our top picks in the semiconductor space, as we believe the long-term risks around its auto business and Chinese competition are more than overdone.

Narrow-moat Infineon Technologies reported fiscal first-quarter results and provided investors with forecasts for the March quarter and all of fiscal 2024 (ending September) that were modestly below our expectations, as the company is also feeling the repercussions of chip inventory corrections at many of its key customers in the automotive and industrial end markets. Still, we’re encouraged that Infineon still foresees revenue growth in automotive, its largest end market. We believe that shares have more than priced in this near-term cyclical downturn. We maintain our EUR 50 fair value estimate and still view Infineon as undervalued and one of our top picks in the technology sector.

Narrow-moat Infineon Technologies is one of our top picks in the technology sector, as our fair value estimate of EUR 50 per share offers an attractive margin of safety for long-term, patient investors, in our opinion. We continue to like the long-term secular tailwinds in the automotive end market, as Infineon should profit from increased chip content per car, especially in electric vehicles. We’re also fond of Infineon’s green industrial power business and its exposure to renewable energy. Infineon has expanded its gross and operating margins in recent years, and we foresee the company maintaining these margins in the long run.

Infineon is a leading broad-based European chipmaker, with significant exposure to secular growth drivers in the industrial and automotive chip sectors. Infineon should emerge as a leading supplier for electric vehicles and active safety systems used in cars, with increasing exposure to car "infotainment" systems. However, like most chipmakers, Infineon's business remains highly cyclical as demand rises and falls with the health of its various end markets.

Infineon reported solid fiscal fourth-quarter results and provided investors with an upbeat forecast in fiscal 2024 (ending Sept. 24), despite some near-term weakness in certain end markets. Importantly, the secular tailwind of rising chip content per car (especially in electric vehicles) appears to be full steam ahead, as management expects low-double digit revenue growth next year even if global light vehicle unit sales are flattish in 2024. We raise our fair value estimate to EUR 50 from EUR 47 as we adjust our near-term and long-term profitability assumptions. Shares still appear undervalued to us, and we remain fond of Infineon's opportunities within the electrification of vehicles and its exposure to EVs.

In 2022, battery electric vehicles represented nearly 10% of global auto sales, up from a little less than 6% in 2021. Much of the growth occurred in China, which has been a leader in EV sales over the past decade. However, with national EV subsidies in China expiring in 2022 and far lower sales in the U.S. and Europe, the market questions if EV sales can continue to grow without subsides.

Narrow-moat Infineon Technologies reported solid fiscal third-quarter results but provided investors with a more modest outlook for the September quarter. Shares are down 10%, perhaps out of concern for the company’s announcement for massive manufacturing expansion to its silicon-carbide, or SiC, power semis business. We’re net neutral on the announcement. We view it as a positive sign for long-term SiC demand and Infineon’s product roadmap, but is the exact type of expansion that adds risk to the business if it were to encounter factory underutilization or a SiC price war. We maintain our EUR 47 fair value estimate and view the selloff as a potential buying opportunity for investors.

Infineon reported strong results for the March quarter and provided investors with an upbeat forecast for the June quarter and fiscal 2023 (ending in September), as the company is still prospering from robust demand for power semiconductors used in electric vehicles and “green” industrial products. Pricing remains strong, and we remain impressed with Infineon’s ongoing gross margin expansion, which we think the firm can maintain (cycles permitting) in the long term. We are raising our fair value estimate for narrow-moat Infineon to EUR 47 from EUR 43 (and to $52 from $48 for U.S. shares), and continue to view the firm as undervalued.

Infineon is a leading broad-based European chipmaker, with substantial exposure to secular growth drivers in the industrial and automotive chip sectors. Infineon should emerge as a leading supplier for electric vehicles and active safety systems used in cars, with increasing exposure to car "infotainment" systems. However, like most chipmakers, Infineon's business remains highly cyclical as demand rises and falls with the health of its various end markets.

Narrow-moat Infineon reported strong fiscal first-quarter results on the profitability front and provided investors with a relatively bright forecast for the March quarter and for all of fiscal 2023 (ending in September). Although Infineon, like its peers, is seeing very soft demand for chips going into personal electronics devices, the company’s automotive and renewable energy products are still prospering from robust demand. We maintain our fair value estimate of EUR 43 for German shares but raise our U.S. ADR to $48 from $44 due to currency effects. Shares were up 8% on the bright news, but we still view Infineon’s shares as undervalued and one of our top picks, thanks to the firm’s healthy exposure to electric vehicles.

Infineon is a leading broad-based European chipmaker, with substantial exposure to secular growth drivers in the industrial and automotive chip sectors. Infineon should emerge as a leading supplier for electric vehicles and active safety systems used in cars, with increasing exposure to car "infotainment" systems. However, like most chipmakers, Infineon's business remains highly cyclical as demand rises and falls with the health of its various end markets.

Narrow-moat Infineon Technologies’ fiscal fourth-quarter earnings call struck a bullish tone, as the company is optimistic in the secular tailwinds around decarbonization and digitization, especially in automotive. Consistent with our note published on Nov. 14 when Infineon announced its earnings and guidance, we are modestly raising our fair value estimate to EUR 43 from EUR 40 (and to $44 from $42 for U.S. shares). Infineon still appears undervalued to us.

Infineon is a leading broad-based European chipmaker, with substantial exposure to secular growth drivers in the industrial and automotive chip sectors. Infineon should emerge as a leading supplier for electric vehicles and active safety systems used in cars, with increasing exposure to car "infotainment" systems. However, like most chipmakers, Infineon's business remains highly cyclical as demand rises and falls with the health of its various end markets.

Narrow-moat Infineon Technologies released its fiscal fourth-quarter earnings a bit early, ahead of its Tuesday, Nov. 15 morning (European time) conference call. We view it as a consequential report as the company reported strong fourth-quarter results, gave investors a bright outlook for fiscal 2023, lifted its long-term revenue growth and operating margin targets, and expects to boost its manufacturing capacity. We think Infineon’s prior long-term targets were outdated, and we view its new goals of 10% revenue growth and 25% adjusted operating margins to be achievable for the most part. We will update our valuation after the earnings call, but at first glance, we don’t foresee a material change (i.e., plus or minus 10%) to our EUR 40 fair value estimate. European shares were up 8% on the news to around EUR 31 but still appear undervalued to us.

Infineon Technologies reported strong fiscal third-quarter results and provided investors with a healthy fiscal fourth-quarter outlook, as the company continues to see chip demand well more than available supply. We will maintain our EUR 40 fair value estimate for narrow-moat Infineon and continue to view shares as undervalued, as we like the firm's exposure to rising chip content per vehicle (and especially electric vehicles).

Narrow-moat Infineon Technologies reported solid fiscal second-quarter results and provided investors with a relatively upbeat forecast for the rest of fiscal 2022 (ending September) as it still foresees robust chip demand, more than offsetting macroeconomic concerns such as COVID-19 restrictions in China and the Russia-Ukraine war. We maintain our EUR 40 fair value estimate but lower our fair value estimate for the U.S. shares to $42 from $46 because of currency fluctuations. We see upside in the shares, thanks to Infineon's position as an automotive chip leader and the strong secular trend of rising chip content per car.

Infineon is a leading broad-based European chipmaker, with substantial exposure to secular growth drivers in the industrial and automotive chip sectors. Infineon should emerge as a leading supplier for electric vehicles and active safety systems used in cars, with increasing exposure to car "infotainment" systems. However, like most chipmakers, Infineon's business remains highly cyclical as demand ebbs and flows in line with the health of its various end markets.

Infineon reported strong fiscal first-quarter results and provided investors with a hearty outlook for the March quarter and all of fiscal 2022 (ending September) amid the global semiconductor shortage. We maintain our EUR 40 fair value estimate, and with shares down about 4% in early trading, we see a modest buying opportunity for investors.

Infineon is a leading broad-based European chipmaker, with substantial exposure to secular growth drivers in the industrial and automotive chip sectors. Infineon should emerge as a leading supplier for electric vehicles and active safety systems used in cars, with increasing exposure to car "infotainment" systems. However, like most chipmakers, Infineon's business remains highly cyclical as demand ebbs and flows in line with the health of its various end markets.

Infineon is a leading broad-based European chipmaker, with substantial exposure to secular growth drivers in the industrial and automotive chip sectors. Infineon should emerge as a leading supplier for electric vehicles and active safety systems used in cars, with increasing exposure to car "infotainment" systems via its acquisition of Cypress Semi. However, like most chipmakers, its business remains highly cyclical as demand ebbs and flows in line with the health of its various end markets.