Trump significantly alters Infineon's projected performance

Infineon's Revised Forecast: Navigating US Trade Disputes

Trump Disrupts Infineon's Predictions - Trump significantly alters Infineon's projected performance

In the face of chaos in the US, Infineon is grappling with a downward shift in its annual outlook. Owing to the looming tariffs and the rapid depreciation of the dollar in recent months, the semiconductor company situated in Neubiberg near Munich has lowered its projection for the current year. CEO Jochen Hanebeck now anticipates a slight revenue decline and narrower margins, and is planning to scale back investments. The positive revenue expectations expressed by Hanebeck in February, when the dollar was stronger, have vanished.

Even the past few months' dollar devaluation alone would not have been enough to cause Infineon to alter its forecast. According to Hanebeck, "Infineon managed a strong performance in the second quarter. We'd still be on track and well within the scope of our earlier expectations, even with an unfavorable dollar rate of 1.125." However, the projected impact of the tariffs appears too substantial. "Given the continued healthy order intake, we can only estimate the overall effects of the trade conflicts," remarks the Infineon CEO. The company is making its best guess by trimming its anticipated fourth-quarter revenue by 10%.

Priority markets, apart from the US, offer little solace for the Neubiberg-based company. For the second quarter of the fiscal year (January – March), profits totaled 232 million euros, descending by 41% compared to the preceding year and just slightly short of the previous quarter's figures. Sales, however, remained robust at 3.6 billion euros, only slightly lower than the previous year and even slightly higher than the previous quarter.

The Automotive segment, responsible for roughly 50% of sales and offering the highest margins, is still performing relatively well. Nevertheless, even in this area, the numbers have deteriorated slightly compared to the previous year. In the automotive sector, the coming months could present new challenges due to the tariffs imposed by US President Donald Trump.

• Infineon Technologies
• Semiconductor Industry
• US-Infineon Trade Disputes
• Neubiberg
• Monetary Turmoil
• Trade Tariffs
• Forecast Adjustments
• Munich
• Automotive Segment

The US tariffs' striking impact on Infineon's revenue and outlook becomes evident in the 2024/2025 fiscal year. In the 2024 fiscal year, Infineon's revenue reached 15 billion euros ($17 billion)[1][3][4]. Earlier, the company anticipated a flat or modestly improved performance in the subsequent year. However, uncertain tariffs and a weakening US dollar have prompted Infineon to adjust its revenue projection for the 2024/2025 fiscal year to a slight decline, deviating from earlier expectations[5].

The tariff uncertainty, particularly the imposition of tariffs potentially starting at 25% or more on semiconductor chips, has produced significant uncertainty for Infineon[3][4]. Despite ongoing order intake, the company has reduced its anticipated fourth-quarter revenue by 10% to reflect the potential tumult caused by these trade disputes[3][4].

Furthermore, modifications in exchange rate assumptions have further affected Infineon's outlook. Initially, the stronger US dollar benefitted Infineon, but its recent decline required adjustments[5]. The operating margin is now projected to be within the mid-teens percentage range, narrower than the earlier anticipated mid-to-high-teens range[3][4].

Overall, the persistent trade disputes and exchange rate fluctuations present challenges for Infineon, requiring a revised forecast for the current fiscal year.

1. The trade tariffs imposed by the US government are causing Infineon Technologies, a semiconductor company based in Neubiberg near Munich, to adjust their revenue projection for the 2024/2025 fiscal year, with a slight decline now predicted due to uncertainties around the tariffs.
2. Infineon has reduced their anticipated fourth-quarter revenue by 10% due to the projected impact of the US-Infineon trade disputes, suggesting a significant impact on their revenue and outlook.
3. The ongoing trade tariffs and monetary turmoil, including the weakening US dollar, are causing Infineon to make modifications in exchange rate assumptions and are expected to result in a narrower operating margin, now projected to be within the mid-teens percentage range.

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