- Infineon informed that economic impact resulting from coronavirus pandemic can not be reliably assessed
- The company is about to complete acquisition of Cypress Semiconductor Corporation in next four days
Infineon Technologies AG (Infineon) said it is withdrawing its outlook for the 2020 fiscal year. Originally the company had anticipated to grow revenues by five per cent year-over-year (plus or minus 2 percentage points).
“The impact of the coronavirus pandemic can result in a deviation from this expectation and can lead to a noticeable decline in revenue compared to the last fiscal year. The anticipated reduction in revenue will weigh on Infineon’s profitability in the 2020 fiscal year, as under-utilisation charges will go up further compared to the original assessment,” read Infineon’s official statement.
It continued, “At this point in time, given the uncertainty regarding the severity and the length of the pandemic’s economic impact, the specific implications on sales and earnings for the 2020 fiscal year can not be reliably assessed or quantified.”
All major manufacturing sites of Infineon are operational
The company also informed that its major manufacturing facilities are operational. However, Infineon has reduced loading levels at fabs located in geographies with government-imposed lockdown regulations.
“At the moment, sufficient procurement of raw materials is in place. Logistic chains including alternative freight routes have been set up for continuous deliveries to customers. Also, research and development, marketing, sales and administrative areas stay functional, largely by working remotely from home offices,” read Infineon’s official statement.
Infineon had recently informed that the acquisition of Cypress Semiconductor Corporation will be complete within next few days. The duo had announced the development back in 2019.
Second half of the 2020
The second half of the 2020 fiscal year, as per the company, will be impacted by the negative economic consequences of disruptions caused by virus containment measures across several of Infineon’s key end markets and regions. The number of cars produced and sold is predicted by market researchers to decline considerably in all major markets compared to 2019, caused by a combined supply and demand shock: several leading automotive OEMs and Tier-1s have announced temporary shutdowns of their production facilities in Europe and in the U.S.
The situation in China appears to normalize slowly. Furthermore, automotive customer demand is negatively affected by stay-at-home regulations in a multitude of countries. Also market expectations for several industrial applications are being meaningfully reduced. In contrast to this, certain areas of Infineon’s business are holding up comparatively well amid current turbulence. This applies to products for data-centers and communications, driven by the surge in online collaboration and data traffic. In general, fiscal and monetary responses by governments and central banks will take time to show effect.
“The management of Infineon is monitoring the situation closely, has implemented a coronavirus crisis management and is prepared to react in an agile way. Infineon expects to be able to give a comprehensive business update in its next quarterly earnings call on Fifth May 2020,” read Infineon’s official statement.
