Analyst Note| Brian Colello, CPA |
Narrow-moat Infineon reported strong fiscal second-quarter results and provided investors with a solid fiscal third-quarter forecast while raising its guidance for the rest of fiscal 2021 (ending September). We have raised our fair value estimate to EUR 32/$38 from EUR 30/$36 and view the shares as fairly valued. Similar to the situation at peers, semiconductor demand is outpacing supply, and Infineon noted supply constraints with some of its products like microcontrollers and Internet of Things chipsets, which are outsourced to external foundries. Infineon estimates that the constraints may extend into 2022, a sentiment shared by peers.