Infineon launches savings program in face of weak demand
German semiconductor giant Infineon will launch a company-wide savings program as the company again cuts its full-year revenue outlook for 2024.
Infineon points to the ongoing industry-wide weak demand as it cut its revenue outlook to EUR 15.1 billion plus or minus EUR 400 million from the previous guidance of EUR 16 billion, plus or minus EUR 500 million.
Infineon already lowered its forecasts in February but said that it expected a recovery in the second half of the year.
However, Jochen Hanebeck, CEO of Infineon, says that many end markets are developing weakly due to the economic situation, and that customers and distributors continue to reduce their inventory levels. Especially in the automotive sector, where the company has seen a noticeable deceleration in growth.
"We are therefore taking a cautious approach to the outlook for the rest of the fiscal year and are lowering our forecast," the CEO says in the 2Q24 report.
Revenues for the second quarter of 2024 amounted to EUR 3.63 billion, down from EUR 4.11 billion in the same quarter the year before. Profit for the period amounted to EUR 394 million, a significant drop from EUR 826 million in the second quarter of 2023.
Due to the development, Infineon is now launching a "structural improvement program" aimed at strengthening the company's competitiveness. With the program, which goes by the name Step Up, the company is focusing on a targeted, sustainable improvement of its cost structure.
The program includes various packages of measures focusing on the areas of manufacturing productivity, portfolio management, pricing quality and operating cost optimisation.
