Infineon has outperformed market expectations with impressive third-quarter results, prompting an upward revision of its full-year margin forecast. The chipmaker’s segment margin surged to 18%, significantly exceeding projections of 15%, while operating profit jumped 27% to €292 million. Revenue grew 3% to €3.7 billion despite a weaker U.S. dollar. Key drivers included unexpected strength in industrial segments (PSS and GIP) and steady growth in automotive and data center businesses. Management noted customer inventory reductions are "well advanced," signaling potential for sustained recovery.
From Caution to Confidence
Just months after lowering guidance due to dollar volatility and tariffs, Infineon now targets a "high single-digit percentage range" for annual margins, up from mid-single digits. The company maintains a cautious revenue outlook of €14.6 billion but raised its adjusted gross margin target to "at least 40%." Investors responded positively, lifting shares by 1.5%. Strategic investment cuts to €2.2 billion reflect geopolitical prudence while preserving room for further margin gains. The turnaround highlights operational resilience in a challenging market.
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