Infineon upbeat on AI chips but cautious on automotive, industrials

By Hakan Ersen and Miranda Murray

BERLIN (Reuters) -Germany's Infineon lifted its full-year sales forecast for chips used in AI data centres on Wednesday, while flagging a cautious automotives and industrial outlook.

Infineon raised its previous chip revenue target by 50% to 1.5 billion euros ($1.75 billion) for its 2026 fiscal year beginning October 1 after sales nearly tripled year-on-year to more than 700 million euros.

"Global investment in AI infrastructure is continuing to rise rapidly," CEO Jochen Hanebeck said in a statement, adding: "By the end of the decade, Infineon's addressable market will reach 8 billion euros to 12 billion".

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Hanebeck said growth momentum in the automotive and industrial sectors was modest and there is a risk firms will reduce inventories to unsustainable levels by the end of 2025.

"Many customers are proceeding cautiously and placing short-term orders," said Hanebeck, adding that he expects a larger-than-usual 9% quarter-on-quarter drop in sales to 3.6 billion euros for the current three-month period.

For the 2026 fiscal year, Infineon forecasts total revenue increasing moderately from 2025's 14.7 billion euros, despite currency headwinds.

Infineon's shares were up 4.5% at 0926 GMT, with JP Morgan analysts calling the guidance "vague, but not negative".

($1 = 0.8575 euros)

(Reporting by Miranda Murray and Hakan Ersan; Editing by Ludwig Burger and Alexander Smith)