Infineon hit by chip shortages

The German chipmaker Infineon Technologies has warned of ‘extreme tightness’ in its markets due to the COVID-19 pandemic continuing to disrupt production in Asia.

The company said that inventories had hit all-time lows and Chief Executive Reinhard Ploss warned that while demand for semiconductors was ‘unbroken’, the market was faced with, “an extremely tight supply situation.”

The company’s fiscal third quarter reflected that strain and quarterly revenue growth came in at just 1%, well below analyst expectations even as profit margins widened. The company reported revenues for the quarter of $3.2bn.

According to Ploss, “Our chips are being shipped from our fabs straight into end applications,” due to inventories being at historic lows.

Infineon said that while it would be able to raise output of specialist power-management chips with the commissioning of its new plant in Villach, Austria, it was still heavily relient on Asian contract manufacturers that are running flat out.

Ploss added that that any government-imposed lockdowns – such as one in Malaysia where Infineon has a production site – were especially grave and that the company was still having to deal with the aftermath of a winter storm that crippled its chip fabrication plant in Austin, Texas.

The Ifo economic research group has said that the German car industry and its suppliers are now facing the worst chip supply shortage in 30 years, with a recent poll showing that 83% of companies were affected, up from 65% in April.