Infineon Delays Phase II Construction of 8-Inch Silicon Carbide Wafer Plant
On November 12, Infineon released its fiscal year 2024 fourth-quarter earnings report along with its full-year revenue results.
On November 12, Infineon released its fiscal year 2024 fourth-quarter earnings report along with its full-year revenue results.
In the fourth quarter of fiscal 2024, Infineon achieved revenue of €3.919 billion, with a profit of €832 million.
For the entire fiscal year 2024, Infineon reported revenue of €14.955 billion, an 8% decline year-on-year, with a profit of €3.105 billion, down by 28%. Free cash flow was only €23 million, while adjusted free cash flow was €1.69 billion.
Looking ahead to the first quarter of fiscal 2025, assuming an exchange rate of €1 to $1.10, Infineon expects revenue of around €3.2 billion. Based on this, the profit margin is expected to be approximately 14% to 16%.
For the fiscal year 2025, assuming the same exchange rate, the company expects revenue to slightly decrease compared to the previous year. The adjusted gross margin is expected to be around 40%, with a profit margin of 14% to 19%.
Infineon CEO Jochen Hanebeck stated, "In fiscal year 2024, Infineon performed well, meeting expectations. Currently, growth in our end markets is weak, except for the AI sector, and cyclical recovery is delayed. Inventory adjustments are ongoing. Short-term ordering patterns and inventory digestion make the demand outlook for the next few quarters unclear. Therefore, we are preparing for slower business growth in fiscal 2025."
Infineon also announced in its financial report that it will reduce its investments by 10% in fiscal 2025, with an estimated investment of €2.5 billion. The company will also delay the Phase II construction of its Kulim plant in Malaysia.
In February 2022, Infineon announced an investment of over €2 billion to build a third facility at its Kulim plant in Malaysia, intended for producing silicon carbide and gallium nitride power semiconductor products.
In August 2023, Infineon further announced an expansion of the Kulim wafer plant beyond the initial investment, aiming to build the world's largest 8-inch silicon carbide power wafer plant, with an additional investment of up to €5 billion over the next five years for the Phase II construction at the Kulim facility.
In August this year, Infineon announced the start of operations for the Phase I project of its third facility at the Kulim plant.
Hanebeck added, "In 2025, automotive production will be flat, and regions outside of China will also perform poorly. We expect inventory adjustments over the next six months. Some cash-conscious customers are reducing inventory, and this trend will continue. Final car sales in the second half of the year will only improve slightly. In this dynamic environment, visibility is very low due to inventory adjustments."
Notably, Infineon's data center power business is thriving. Hanebeck highlighted recent progress in 12-inch (300 mm) silicon-based gallium nitride (GaN) wafers and thinner wafers, which are key for future growth.
He stated, "Investment in AI data centers remains high, which will drive the doubling of the power business to over €500 million, with an expected increase to €1 billion in two years."
