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Infineon Technologies AG ADR IFNNY

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Morningstar’s Analysis

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Infineon Enjoys Impressive Gross Margin Expansion, Thanks to Strong Demand; EUR 40 FVE

Brian Colello, CPA Sector Director

Analyst Note

| Brian Colello, CPA |

Narrow-moat Infineon Technologies reported strong fiscal fourth-quarter results and provided investors with an upbeat forecast for the December quarter and for fiscal 2022 (ending September 2022). Infineon should continue to see robust demand in the near term amid the global semiconductor shortage, which should lead to healthy chip pricing and strong gross margins as the company fully utilizes its existing capacity and strives to bring more capacity online. We raise our fair value estimate to EUR 40 from EUR 34, thanks to both the strong near-term results and as we update our valuation model for the time value of money. Shares appear fairly valued to us.

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Company Profile

Business Description

Infineon was spun off from German industrial conglomerate Siemens in 2000 and today is one of Europe's largest chipmakers. The company is a leader in the automotive and industrial chip markets and has also focused on ID cards and security solutions that include semiconductor content. Infineon has divested itself of some less profitable businesses in recent years, most notably the sale of its wireless chip division to Intel in 2010.

Am Campeon 1-15, Neubiberg
Munich, 85579, Germany
T +49 892340
Sector Technology
Industry Semiconductors
Most Recent Earnings Sep 30, 2021
Fiscal Year End Sep 30, 2022
Stock Type
Employees 50,288