Infineon cuts revenue prediction as market weakens

March 28, 2019 //By Nick Flaherty
Infineon cuts revenue prediction as market weakens
Infineon Technologies has cut its outlook for 2019 as a result of global economic uncertainties and weaker market demand.

A number of end markets continue to be sluggish; in particular, the trend of declining vehicle sales in China has accelerated in February, causing inventories to increase sharply, said the company. At the same time inventories in the broader distribution channel, in particular for Power Management & Multimarket in China have increased.

Revenue is now expected to come in at €8.0bn, up from €7.6bn in 2018 but still lower than it originally predicted. The Automotive and Industrial Power Control divisions should come in above group average, whereas the Power Management & Multimarket division is expected to grow slightly less. Revenue from the Digital Security Solutions division revenue is expected to fall by up to 10 per cent.

This has put pressure on margins, which are set to fall from 17.5 percent to 16 percent. Investment in R&D and fab capacity, mainly in Villach, Austria, will be kept for the time being at the projected level of about €1.5bn as this is predominantly due to business areas where current production capacity continues to be insufficient to satisfy demand, like electro-mobility.

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