UPDATE 2-Chipmaker Infineon plans 50% hike in investments

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* 2022 investment seen at 2.4 billion euros

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* 2021 revenue, margin guidance confirmed

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* 2022 revenue seen around 15%

* Share up to 0.8% (adds description, background)

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BERLIN, Oct 5 (Businesshala) – German chip maker Infineon Technologies plans to increase investment by 50% next year, boosting its shares as it benefits from rising demand and global shortages in semiconductors.

In a release issued ahead of an investor day, Infineon said on Tuesday it would invest about 2.4 billion euros ($2.8 billion) in 2022, up from about 1.6 billion euros this year.

It said the expenditure would be on property, plant and equipment, without giving further details.

The company estimates revenue will grow by a mid-teens percentage next year, with a segment result margin — a measure of operating profitability — of about 20%, up from its 2021 target of 18%.

It reaffirmed guidance for 2021 revenues of 11 billion euros.

“CO2 reduction and the desire to connect things intelligently and safely are key trends across all industries,” said chief executive Reinhard Ploss. “2022 is shaping up to be a strong year.”

Shares of Infineon jumped 2% in the open market and were up 0.8% to 34.23 euros at 0810 GMT.

Ploss recently said that he expects significant price increases for semiconductors as Infineon passes on the higher cost to customers, noting that the industry is prepared to pay “astronomical prices.”

Infineon has attributed the tightness in semiconductor markets to a lack of investment in new capacity by its manufacturing partners, as demand picks up after the coronavirus lockdown, disrupting chip supplies, particularly in the car industry.

Contracted chipmakers have invested primarily in the production of high-margin processors used in devices such as smartphones, leaving existing plants unable to meet demand for older chips used in cars.

But Infineon, a major supplier to the auto industry, has faced problems meeting distribution commitments after a winter storm knocked down a plant in the United States and disrupted operations in Malaysia.

The Munich-based firm last month opened a 1.6 billion euro plant in Austria, expanding its capacity to supply power chips for cars, data centers and renewable energy.

$1 = 0.8622 euros Reporting by Riham Alkausa and Emma Thomson Editing by Jason Neely and Mark Potter


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