Wednesday, February 12, 2020
Reporting its quarterly results this week, Infineon Technologies said silicon microphones and its server business were bright spots in a quarter that otherwise saw a sequential revenue decrease of 7% to €1.916 billion (US $2.1 billion). It also expects to close the Cypress acquisition transaction at the end of this quarter or the beginning of the next.
Reinhard Ploss, CEO of Infineon, said, “Demand for the latest generation of our silicon microphones is growing dynamically. We are also seeing signs of improvement in individual areas such as the server business. Overall, however, we do not expect to see a broad-based recovery of demand before the second half of the fiscal year. Our long-term growth drivers remain intact and we are making a crucial contribution to shaping the future of mobility and energy efficiency.”
The company expects revenue growth for its current fiscal year to be in line with expectations, at around 5%, based on higher than average revenue growth in its power management and multimarket segment.
Infineon witnessed a strong market uptake for its silicon microphones, which it said provide superior active noise cancellation for phones and accessories as a result of the combination of an innovative sealed dual membrane MEMS, its own package, and good signal-to-noise ratio. “Based on current design-ins, we estimate to generate about 50% growth in revenue with our microphone family in the current fiscal year compared to the last fiscal year,” Ploss commented.
US, China and coronavirus
In the analyst call, Ploss said that while the first phase of a trade agreement between the US and China is a step in the right direction, it is not sufficient to “bend macro uncertainties”. And with the coronavirus outbreak in China, he said this adds to near-term uncertainties. He commented, “Trade-related uncertainties continue to persist and there is no meaningful macro improvement. On the contrary, the recent outbreak of the coronavirus in China has potential, apart from the human tragedy, to significantly dampen economic activity and weigh on GDP growth. We’ll monitor the situation carefully, first and foremost, in order to protect the health and safety of our employees. Regarding our business, we have not yet seen major impact on either supply or the sales side. However, there clearly is a disruption to at least Chinese economy and it is too early to fully assess potential impacts.”
“Given this picture, and assuming no major impact of the coronavirus situation on us, we confirm our guidance for the 2020 fiscal year. Excluding Cypress, year-over-year revenue growth should be 5%.”
Automotive decline in China impacts revenue
As indicated in other semiconductor company results, the global decline in the automotive market as a result of a decline in China contributed to a revenue decline in 2019. “For 2020, volumes are predicted to stay essentially flat. This view contains the assumption of a return to growth in the second half of the calendar year. With our fiscal year running until September, we’ll only partially benefit from this development,” Ploss said.
The electric vehicles market in China continued to be weak, but the slowdown appears to be gradually tapering off according to Infineon. In October, sales numbers of electric and plug-in hybrid light vehicles declined by 48% year-over-year. In November, the decline was 40%; and in December, around 25%.
Ploss indicated Infineon had secured a significant triple-digit million Euro automotive MOSFET design win from a major European tier 1 for its 48V mild hybrid platform. “The key success factor for this project was the newly developed package which allows topside cooling instead of heat dissipation via the printed circuit board.”
Energy efficiency for high performance computing
Infineon said it supports the open accelerator modular form factor specified by the Open Compute Project Association. Some of these accelerator modules are designed specifically for machine learning boards, hosting a number of high-performance special processors. These ports consume up to 750 watt per processor. Considering up to eight processors per board, this leads to a total power consumption of 8 kW, about 5 to 7 times that of a standard server. “For such high-end applications, energy efficiency is a key factor influencing operating cost. Our reference power stage, currently about to launch, provides a digital power conversion solution addressing these requirements,” Ploss said.
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