Chip Maker Infineon Forecasts Strong Revenue Growth on Booming AI Demand — Update

By Mauro Orru

Infineon Technologies said it expects strong revenue growth in the current fiscal year as the race to build artificial-intelligence infrastructure keeps adding fuel to red-hot semiconductor demand.

The German chip maker on Wednesday detailed its revenue guidance for the year to the end of September, projecting roughly 16.3 billion euros ($18.80 billion) compared with 14.66 billion euros it reported for fiscal 2025. The company had previously guided for significant revenue growth, but without specifying a figure.

"An increasing number of our target markets are showing a positive trend. Our power supply solutions for AI data centers remain in very high demand and continue to be our most important growth driver," Chief Executive Jochen Hanebeck said.

Infineon said it had secured multiyear capacity agreements for AI data centers with several customers and that it was in talks for more. Those deals, it said, cover a cumulative revenue volume of a high single-digit billion-euro amount and also include some prepayments.

Like many of its peers, Infineon has been cashing in on surging demand for chips as some of the world's largest tech groups pledged hundreds of billions of dollars to build and power energy-hungry data centers.

Infineon shares have gained nearly 70% since January, riding a wave of investor fervor that propelled global semiconductor stocks to new highs on expectations that appetite for chips will continue to outpace supply.

The company in November lifted its AI revenue target for fiscal 2026 to around 1.5 billion euros from 1 billion euros and, in February, it said that AI revenue should grow to roughly 2.5 billion euros in fiscal 2027.

In a sign of how intertwined AI has become with the fortunes of chip makers, Infineon rival and SpaceX supplier STMicroelectronics in July raised its data-center revenue target for a second time this year, just over a month since the first upgrade.

Aside from AI, Infineon is also reaping the benefits of a recovery in demand for chips from the automotive sector, a weak spot in recent years as carmakers slowly digested chip inventories they built at the height of the pandemic, weighing on demand for new orders. Hanebeck said automotive orders were picking up noticeably.

Revenue for the three months to the end of June grew 13% from a year earlier to 4.17 billion euros. Analysts had forecast revenue of 4.13 billion euros, according to Vara Research.

Net profit increased to 423 million euros from 305 million euros a year earlier. Its segment result--a closely watched profitability metric--rose to 797 million euros from 668 million euros, generating a 19.1% segment-result margin. Analysts had forecast a net profit of 452 million euros, a segment result of 809 million euros and a 19.6% segment-result margin, according to Vara Research.

The company said revenue in the quarter to the end of September should come in at roughly 4.7 billion euros, up from 3.94 billion euros a year earlier. Infineon's segment result margin is expected at about 23% compared with 18.2% the year-prior quarter.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

August 05, 2026 02:07 ET (06:07 GMT)