Infineon Forecasts Over 20% Revenue Growth on Data-Centre Demand

German chipmaker Infineon Technologies expects revenue to grow by more than 20% to about EUR20 billion in fiscal 2027, lifted by demand for power chips used in data centres, Investing.com reported on Tuesday. The revenue target came in above the EUR19.81 billion analysts had expected, and the company’s shares jumped more than 6% in Tuesday trading.

The company said revenue from power supplies for data centres, covering both AI and classical servers, should reach close to EUR4 billion, up from EUR2.2 billion. Chief executive Jochen Hanebeck said the combined volume of multi-year supply and capacity agreements had now exceeded EUR10 billion.

Cash flow outlook falls short

Not every target beat forecasts. Infineon guided for free cash flow of about EUR1.8 billion against expectations of EUR2.26 billion, and adjusted free cash flow of about EUR2.2 billion versus the EUR2.74 billion analysts had pencilled in, according to Investing.com.

Capital spending is planned at EUR3.0 billion to EUR3.5 billion, with investment going to sites in Dresden, Kulim and Villach. The company is targeting an adjusted gross margin in the mid-to-high 40s per cent and a segment result margin in the mid-20s. The guidance excludes the planned sale of its memory business to Winbond, which Investing.com said could add up to EUR1 billion in free cash flow in fiscal 2027.

By division, Infineon expects automotive revenue to rise by a mid-teens percentage, edge systems to grow by a low-teens percentage, and power systems to grow significantly faster than the group as a whole.

Record fourth quarter

Fourth-quarter revenue reached a record EUR4.71 billion, in line with expectations and up 13% from the previous quarter, Investing.com reported. The segment result was EUR1.12 billion, giving a margin of 23.8%, ahead of the 23.3% forecast. Profit for the period, however, was EUR532 million, below the EUR677 million expected, and adjusted diluted earnings per share of EUR0.60 missed estimates of EUR0.64.

For the full fiscal year 2026, revenue rose 12% to EUR16.35 billion. Revenue in the power systems division climbed 31% to EUR5.43 billion, with AI and data centres making up 40% of that unit’s sales. Revenue from dedicated AI power products more than doubled to EUR1.7 billion.

The company plans to propose a dividend of EUR0.38 per share, up three cents, at its annual general meeting in February 2027. Chief financial officer Sven Schneider told analysts that AI is a strong growth driver but stressed the business is broad-based.

What’s next

For the first quarter of fiscal 2027, Infineon forecast revenue of about EUR4.6 billion and a segment margin of around 23%, which the company described as significantly better than usual seasonality. Automotive and power systems are expected to hold stable, while edge systems are seen declining moderately.

Infineon raised power semiconductor prices twice in fiscal 2026, in April and July. Chief operating officer Ulrich Spiesshofer said, “In 2027, we will see a positive price environment.” The company also said it will stop reporting its order backlog.

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