Chip Maker Infineon Lifts AI Sales Goal on Strong Data-Center Demand

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Infineon Technologies raised its artificial-intelligence sales forecasts for the new fiscal year, a sign it expects the buildout of data centers to continue at pace and appetite for advanced semiconductors to remain strong.

The German chip maker said revenue from data centers in the year through September 2027 should be close to 4 billion euros, equivalent to $4.49 billion, up from prior guidance of roughly 2.5 billion euros.

The upgrade shows that Infineon sees growing demand for AI infrastructure in the coming months despite fears from some investors that Democrats' win of majorities in both chambers of Congress could jeopardize the buildout of data centers in the U.S.

Infineon shares in Frankfurt gained more than 4% on Tuesday, lifting the stock more than 50% over the past 12 months. Infineon, like other rivals that make chips needed to power data centers, has emerged as a beneficiary of hundreds of billions of dollars in spending commitments from some of the world's largest tech groups to build out AI infrastructure.

The technology has made Infineon less reliant on an auto industry that had been a source of pain in recent years as carmakers slowly digested chip inventories they built at the height of the pandemic. That translated into subdued demand for Infineon's chips and several quarters of underwhelming sales. Now, even that end-market is recovering.

Chief Executive Jochen Hanebeck said he expected a significant increase in revenue and profitability in fiscal 2027, singling out semiconductors for data-center power supplies, the expansion and modernization of energy infrastructure, electromobility, and software-defined vehicles as key contributors.

For fiscal 2027, Infineon is projecting revenue of about 20 billion euros, compared with 16.35 billion euros it reported for fiscal 2026. Its segment result margin--a key profitability measure--is expected to come in the mid-twenties percentage range compared with 19.7% in fiscal 2026.

The timing of Infineon's fiscal year means the company is among the first chip makers in Europe to provide annual guidance, giving investors a sneak peek of where demand is heading. Its annual forecasts compare with analysts' estimate of 19.81 billion euros for revenue and a 24.9% margin, according to Vara Research.

"Overall, Infineon tends to guide cautiously at full-year results and thus this guidance should be seen in that light," J.P. Morgan analysts wrote in a note to clients.

Revenue for the three months to the end of September grew 19% from a year earlier to 4.71 billion euros, in line with analysts' forecasts, according to Vara Research.

Net profit climbed to 532 million euros from 231 million euros a year earlier. Its segment result increased to 1.12 billion euros from 717 million euros, generating a 23.8% margin. Analysts had forecast a net profit of 678 million euros, a segment result of 1.10 billion euros and a 23.3% margin, according to Vara Research.

Infineon said it would propose a dividend of 0.38 euros a share for fiscal 2026 at its annual general meeting in February, above the 0.35 euros a share it paid for fiscal 2025.

 
 

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