Infineon bets on strong EV growth after 40% auto chip revenue climb last quarter

Electric vehicle only highway sign
Infineon is expecting continued strong growth from sales of chips for electric vehicles and sees the impact of a clean mobility push from the Biden administration. (Bet_Noire/iStock/Getty Images Plus)


Infineon Technologies AG expects continuing strong momentum in chips for electric vehicles, a market that is growing rapidly in Europe and China as compared to the U.S.

The German-based chipmaker estimated 40% growth in sales of its products used in EVs for fiscal year 2020, compared to 2019. In calendar 2020, the overall EV market grew by 36% versus the prior year and that growth is expected to double into 2021, coming strongly from hybrids but also battery EVs, the company noted on an earnings call last week.

For its first fiscal 2021 quarter, which ended December 31, the company announced revenues of 2.6 billion Euros ($3.1 billion US), an improvement of 37% year-on-year.  Infineon is the 10th largest semiconductor company globally by revenues.

Infineon’s strongest market segment for the quarter was automotive, accounting for 44% of sales with 40% improvement year-on-year.

CEO Reinhard Ploss also said the company will move up its starting date of its new 300 mm power semiconductor plant in Villach by a quarter to fourth fiscal quarter, which starts in July.

Noting the global component shortage that has led to some auto plant slowdowns, Ploss said that demand in microcontrollers and IoT products “is outstripping supply…inventories are on the lean side,” according to a transcript by Seeking Alpha of the earnings call.

“The road to recovery will have speed bumps in the near term related to component shortage in several areas,” Ploss said. “Covid and trade tension remain significant uncertainties that might well cause volatilities.”

Nonetheless, he said current supply constraints “should not overshadow underlying trends.  2021 is shaping up to be a strong year for automotive semiconductors.”

For the December quarter, he said the top five western European carmakers had about 14% share of all new battery electric and plug-in hybrids, companied to about 8% in China and 3% in the U.S.

“However, under the new [Biden] administration, the regulatory framework and public infrastructure spending are expected to favor clean mobility,” Ploss added. “Overall, electromobility is taking off and Infineon has an unrivaled product portfolio…for all types of vehicle electrification.”

Shares closed on Monday at $42.86, near the high of the last six months of $43.55 on Jan. 21.

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