German chipmaker Infineon disappoints as production falters

Frankfurt (dpa) – A modest rise in profits at German chipmaker Infineon despite strong demand for its products disappointed analysts on Tuesday and hit the company’s share price on the Frankfurt Stock Exchange.

In the three months through the end of June, turnover rose just 1 per cent on the previous quarter, to 2.72 billion euros (3.23 billion dollars), disappointing analysts.

The company attributed the relatively weak turnover figures to pandemic-related restrictions on its Melaka plant in Malaysia and the effects of a storm in Austin in Texas.

“Demand for semiconductors is unbroken, as they play a key role in enabling the energy transition and digitalization. Currently, however, the market is faced with an extremely tight supply situation,” chief executive Reinhard Ploss said.

Inventories were at an historic low and chips were being shipped for immediate use. “Under these circumstances, any pandemic-related restrictions on manufacturing, such as those recently imposed in Malaysia, are especially grave,” he noted.

The company was working to build up additional capacity, Ploss said.

Third quarter operating profits for the financial year running to the end of September rose to 496 million euros, from 470 million euros in the second quarter, meeting analysts’ expectations. Income from continuing operations rose to 245 million euros from 209 million.

Infineon is expecting a further rise in turnover in the fourth quarter amid strong global demand for chips. Revenues are predicted at around 2.9 billion euros on the basis of increasing margins.

After performing well through the week in anticipation of the results, Infineon shares fell just under 1 per cent and were trading at 33.16 in Frankfurt at around midday in a generally rising market.