- Pandemic lockdown hits Malaysian plant, Texas still struggling
- Auto industry faces “acute supply limitations” – CEO
- Automotive and power / sensors divisions weigh on third quarter sales
- German auto industry faces worst chip crisis in 30 years-Ifo
- Equities down 1.4%
BERLIN, Aug. 3 (Reuters) – Chipmaker Infineon Technologies (IFXGn.DE) said on Tuesday that production shutdowns at two of its factories had affected deliveries to major auto customers, as the German auto industry grapples with the worst supply shortage in three decades.
As Munich-based Infineon was recovering from a winter storm that crippled its Austin, Texas plant, a new wave of coronavirus infections forced the closure of one of its plants in Malaysia in June.
The production shutdowns mean that, compared to its European rival STMicroelectronics (STM.BN), Infineon was less able in its fiscal third quarter to take advantage of strong demand for everything from smartphones to automobiles.
Germany’s auto industry, the export powerhouse of Europe’s largest economy, is also struggling: BMW (BMWG.DE) on Tuesday warned that chip shortages would kick into its results later this year after a first half solid. Read more
Commenting on the auto industry, which accounts for two-fifths of Infineon’s sales, Ploss said the recovery was being held back by “acute supply limitations across the entire value chain.”
“Inventories are extremely tight and final demand is postponed. Overall, it will take time to return to a supply-demand balance. In our view, it will take until 2022,” Ploss told analysts at ‘a conference call. .
Infineon shares cut their steep losses early to trade down 1.4% by mid-morning in Frankfurt.
Ploss said inventory was “at an all time low; our chips are shipped from our factories directly to end applications.”
Under these circumstances, any government-imposed lockdown – like the one in Melaka in Malaysia where Infineon has a production site – was particularly serious.
While the Melaka plant is only expected to resume production at full capacity this month, Infineon faces a double-digit blow in millions of euros (dollars) that will run from the fiscal fourth quarter through September 30, a he declared.
Confirming the grim picture, economic research group Ifo said on Tuesday that the German auto industry and its suppliers were facing the worst chip supply shortage in 30 years. A survey showed that 83% of businesses were affected, up from 65% in April.
“This leads to production shutdowns,” said Ifo’s Oliver Falck. “Semiconductor shortages will persist for some time to come.”
Infineon will be able to increase production of specialized power management chips with the commissioning of its new plant in Villach, Austria, but it still relies heavily on Asian subcontractors running at full speed.
Infineon revenue increased 1% to € 2.72 billion ($ 3.23 billion) in fiscal third quarter from previous three months, below expectations of survey conducted from 22 analysts by Vara Research.
And, while year-over-year revenue growth was 25%, it is lower than the 43% reported by STMicro, which last week raised its outlook for strong demand and improving power to grow. pricing. Read more
Infineon maintained its revenue forecast for its fiscal year as at September 30 of 11 billion euros, while pushing its forecast for segment profit margin – a measure of operating profitability – to more than 18%.
($ 1 = 0.8421 euros)
Reporting by Douglas Busvine Editing by Caroline Copley and Anil D’Silva
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