By Nina Kienle


Infineon Technologies lowered its sales forecasts for fiscal 2024 for the second time this year as it grapples with slower growth in the automotive sector.

The German chip maker said Tuesday that it is aiming for around 15.1 billion euros ($16.26 billion) plus or minus EUR400 million in sales for the year ending in September, down from EUR16.31 billion in fiscal 2023. Its segment result margin--a key profitability metric--is expected at around 20% compared with 27% the prior year. The group previously guided for roughly EUR16 billion in revenue and a segment result margin in the low to mid-20s percentage range.

Chip makers have been grappling for months with low demand for semiconductors in consumer devices as manufacturers of smartphones and computers held off ordering more chips that they had stockpiled in recent years. Earlier this year, Infineon lowered its guidance for fiscal 2024 to account for that weak demand.

The automotive industry has long provided a lifeline to the sector as car makers sought smaller and more energy-efficient chips in their push for electric vehicles. Now, the tide is changing.

Last month, Elon Musk's electric-vehicle maker Tesla reported its first year-over-year decline in quarterly deliveries since 2020, a sign that the EV market is slowing and translating into fewer orders for chip makers like Infineon. Rival STMicroelectronics also cut its own forecasts last month, citing slower demand for chips from the auto industry.

Infineon posted revenue of EUR3.63 billion for its second quarter through the end of March compared with EUR4.12 billion a year earlier. Its automotive division contributed EUR2.078 billion to sales, slightly down from EUR2.080 billion. Revenue at Infineon's power and sensor systems unit fell to EUR713 million from EUR925 million.

Net profit fell to EUR394 million from EUR826 million, while its segment result dropped to EUR707 million from EUR1.18 billion, generating a 19.5% margin.

Analysts had forecast revenue of nearly EUR3.60 billion and a net profit of EUR397.34 million, with a segment result of EUR647.67 million, according to consensus estimates compiled by Visible Alpha.

Shares traded 4.0% higher at market open.


Write to Nina Kienle at nina.kienle@wsj.com


(END) Dow Jones Newswires

05-07-24 0348ET