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1. Company Snapshot

1.a. Company Description

Infineon Technologies AG designs, develops, manufactures, and markets semiconductors and related system solutions worldwide.Its Automotive segment offers automotive microcontrollers; 3D ToF, magnetic, and pressure sensors; discrete power semiconductors; IGBT modules; industrial microcontrollers; power and radar sensor integrated circuits (ICs); transceivers; silicon carbide diodes, MOSEFTs, and modules; and voltage regulators for use in assistance and safety systems, comfort electronics, infotainment, powertrain, and security products.The company's Industrial Power Control segment provides bare dies, discrete IGBTs, driver ICs, SIC diodes, and IGBT modules and stacks for home appliances, industrial drives, industrial power supplies, industrial robotics, industrial vehicles, and traction, as well as for energy generation, storage, and transmission.


Its Power & Sensor Systems segment offers gas sensors, MEMS microphones, and pressure sensors chips; discrete low-voltage, mid-voltage, and high-voltage power MOSFETs; control ICs; customized chips; GaN power switches; GPS low-noise amplifiers; low-voltage and high-voltage driver ICs; radar sensor ICs; RF antenna switches and power transistors; transient voltage suppressor diodes; and USB controllers for use in audio amplifiers, automotive electronics, BLDC motors, cellular communications infrastructure, electric vehicle charging stations, human machine interaction, Internet of Things, LED and conventional lighting systems, mobile devices, and power management applications.The company's Connected Secure Systems segment provides connectivity solutions, embedded security controllers, microcontrollers, and security controllers for authentication, automotive, consumer electronics, government identification document, Internet of Things, mobile communication, payment system, ticketing, access control, and trusted computing applications.Infineon Technologies AG was founded in 1999 and is headquartered in Munich, Germany.

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1.b. Last Insights on IFX

Infineon Technologies' recent performance was driven by strong demand for its power solutions in AI data centers. The company raised its 2026 sales target for the AI power supply segment, citing robust demand. Its revenue guidance increase, fueled by AI data center demand, has bolstered investor confidence. Additionally, Infineon's new PSOC Edge machine learning microcontrollers for robotics, industrial, and smart home applications are now available, expanding its product offerings. The company's valuation is also being reevaluated, with a projected fair value of €54.59, indicating potential undervaluation.

1.c. Company Highlights

2. Infineon Technologies AG Delivers Mixed Q1 FY2026 Results Amidst Semiconductor Market Recovery

Infineon Technologies AG reported revenue of EUR 3.662 billion for the first quarter of fiscal 2026, a decline of 7% compared to the previous quarter but in line with expectations. The company's adjusted revenue growth was almost 14% compared to the same quarter last year. The segment profit margin was 17.9%, relatively stable compared to the previous quarter. Earnings per share (EPS) came in at EUR 0.3482, beating analyst estimates of EUR 0.3304.

Publication Date: Feb -05

📋 Highlights
  • Revenue Decline with Seasonal Adjustment:: Q1 2026 revenue fell 7% to EUR 3.662 billion QoQ but rose 14% YoY after currency adjustments.
  • AI Investment & Growth Projections:: EUR 500 million allocated to AI manufacturing expansion; AI sales expected to reach EUR 2.5 billion in 2027 (+EUR 1 billion YoY).
  • Automotive Segment Resilience:: Q1 sales of EUR 1.821 billion (-5% QoQ), but 4% YoY growth amid seasonality and inventory management.
  • Green Industrial Margin Compression:: Segment profit margin dropped to 8.9% from 16.3% QoQ due to weak global industrial demand.
  • Connected Secure Systems Weakness:: Revenue fell 13% QoQ to EUR 321 million, with margins declining to 7.2% from 12.2%.

Segment Performance

The Automotive segment generated sales of EUR 1.821 billion, a decline of 5% compared to the previous quarter, but grew by 4% compared to the previous year. The segment earnings margin remained stable at 22.1%. The Green Industrial Power division posted a decline in sales, with a segment earnings margin falling to 8.9%. The Power & Sensor Systems segment saw an improvement in segment results, with a margin of 17.4%. As Jochen Hanebeck, CEO, noted, "We're seeing the first signs of a broader revival in demand for consumer, general computing, and communications applications."

Outlook and Guidance

Infineon expects to generate sales of approximately EUR 3.8 billion in the second quarter, with a segment result margin in the mid- to high teens. For fiscal 2026, the company continues to expect a moderate increase in revenue compared to fiscal 2025. Infineon is investing EUR 2.7 billion in the current fiscal year, with EUR 500 million allocated to expanding manufacturing capacity for power supplies in AI data centers, driving strong growth in the upcoming year.

Valuation and Growth Prospects

With a P/E Ratio of 51.5 and an EV/EBITDA of 16.79, Infineon's valuation suggests that the market is pricing in significant growth prospects. Analysts estimate next year's revenue growth at 11.9%. The company's ROIC is 4.29%, and ROE is 5.87%, indicating a relatively modest return on equity. Infineon's guidance and investment plans suggest that the company is well-positioned to capitalize on the growing demand for AI-related chips and power supplies.

Investment Implications

Infineon's focus on AI-related business and investments in manufacturing capacity expansion are expected to drive growth beyond the current fiscal year. The company's acquisition of ams-OSRAM's subunit is expected to be earnings and margin accretive. With a Free Cash Flow Yield of 2.26%, Infineon's shares may offer an attractive return for investors willing to take on the associated risks.

3. NewsRoom

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Infineon Technologies (ETR:IFX) Is Due To Pay A Dividend Of €0.35

Feb -11

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ams OSRAM Post Q4 Above Mid-point of Guidance, Delivers EUR 144 m FCF in FY25 and Launches EUR 200 m ‘Simplify’ Transformation and Savings Program

Feb -10

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Infineon Technologies (IFNNY) is an Incredible Growth Stock: 3 Reasons Why

Feb -05

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Infineon Ramps Up AI Push As Valuation Tracks Growing Automotive Focus

Feb -05

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Does Infineon (XTRA:IFX) Turning Up AI Capex Clarify or Complicate Its Core Investment Story?

Feb -05

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Infineon Technologies (XTRA:IFX) Valuation After AI Capacity Expansion Plans And Recent Earnings Update

Feb -05

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Infineon Technologies AG (IFNNF) Q1 2026 Earnings Call Highlights: Navigating Growth Amidst ...

Feb -04

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EV Semiconductors Market by Technology (Silicon-based, Wide-Bandgap), Propulsion, Application (Battery Management System, Powertrain, ADAS), Component (Power ICs & Modules, MCUs & Processors, Sensors)

Feb -04

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.87%)

6. Segments

Automotive

Expected Growth: 3.5%

Infineon's Automotive segment growth of 3.5 is driven by increasing demand for electric vehicles, advanced driver-assistance systems (ADAS), and autonomous driving technologies. The company's focus on providing innovative semiconductor solutions, such as power modules and sensors, positions it well to capitalize on these trends and expand its market share in the automotive industry.

Power & Sensor Systems

Expected Growth: 4.2%

The Power & Sensor Systems segment of Infineon Technologies AG is driven by growth in electric vehicles, renewable energy, and industrial automation. Increasing demand for energy-efficient solutions, government regulations, and advancements in sensor technologies are key drivers. This segment's 4.2% growth is fueled by Infineon's expanding product portfolio and strategic acquisitions, enabling the company to capitalize on emerging trends.

Green Industrial Power

Expected Growth: 5.0%

The Green Industrial Power segment growth of 5.0% is driven by increasing demand for energy-efficient solutions, government regulations promoting sustainable practices, and Infineon's innovative product portfolio, including power semiconductors and modules for electric vehicles and renewable energy systems.

Connected Secure Systems

Expected Growth: 3.8%

The Connected Secure Systems segment of Infineon Technologies AG is driven by growing demand for secure and connected devices, increasing adoption of IoT, and rising need for cybersecurity solutions. Strong growth in automotive, industrial, and smart infrastructure applications also contribute to its 3.8% growth rate.

Other Operating Segments

Expected Growth: 2.5%

The 2.5% growth in Other Operating Segments of Infineon Technologies AG is driven by increased demand for industrial and automotive applications, particularly in power management and sensor technologies. This growth is also attributed to the company's strategic focus on expanding its product portfolio and improving operational efficiency.

7. Detailed Products

Power Systems

Infineon's Power Systems product line includes a range of power semiconductors, such as IGBTs, power MOSFETs, and thyristors, designed for high-power applications

Automotive Systems

Infineon's Automotive Systems segment offers a variety of products, including microcontrollers, sensors, and power management devices, for applications in vehicles

Industrial and Infrastructure

This segment provides products for industrial applications, such as motor control, industrial communication, and power supplies

Security and Smart Solutions

Infineon's Security and Smart Solutions segment offers products for secure identification, authentication, and data protection, as well as smart card and chip card solutions

Memory Products

Infineon's Memory Products segment includes a range of non-volatile memory products, such as NOR and NAND flash memory

Microcontrollers and Embedded Systems

Infineon's Microcontrollers and Embedded Systems segment provides a range of microcontrollers and embedded systems for various applications

Discrete Semiconductors

Infineon's Discrete Semiconductors segment offers a range of discrete semiconductors, such as diodes, transistors, and thyristors

Radar and Sensing Solutions

Infineon's Radar and Sensing Solutions segment provides products for radar and sensing applications, including automotive and industrial radar systems

8. Infineon Technologies AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Infineon Technologies AG operates in the semiconductor industry, where substitutes exist but are limited. While there are alternative technologies and products, they may not offer the same performance, quality, or compatibility as Infineon's products. The company has a strong reputation and brand recognition, which makes it difficult for substitutes to gain traction.

Bargaining Power Of Customers

Infineon Technologies AG has a diverse customer base across various industries, including automotive, industrial, and consumer electronics. While some large customers may have significant bargaining power, the company's broad product portfolio and strong technical support make it difficult for customers to negotiate significant discounts or concessions.

Bargaining Power Of Suppliers

Infineon Technologies AG relies on a network of suppliers for raw materials, equipment, and manufacturing services. While some suppliers may have significant bargaining power, the company has a strong procurement strategy and long-term partnerships with key suppliers, which mitigates the risk of supplier power.

Threat Of New Entrants

The semiconductor industry is highly competitive and requires significant investments in research and development, manufacturing capacity, and talent acquisition. New entrants face significant barriers to entry, including high capital expenditures, complex technology, and established relationships between existing players and customers.

Intensity Of Rivalry

The semiconductor industry is highly competitive, with many established players competing for market share. Infineon Technologies AG competes with companies like Texas Instruments, STMicroelectronics, and NXP Semiconductors, among others. The competition is intense, with companies investing heavily in research and development, marketing, and sales to gain market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.08%
Debt Cost 4.28%
Equity Weight 76.92%
Equity Cost 11.90%
WACC 10.14%
Leverage 30.01%

11. Quality Control: Infineon Technologies AG passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Momentum: 10.0

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ASML Holding

A-Score: 4.8/10

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ASM International

A-Score: 4.2/10

Value: 1.3

Growth: 8.2

Quality: 8.4

Yield: 1.2

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Yield: 3.1

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Infineon Technologies

A-Score: 3.6/10

Value: 2.3

Growth: 4.9

Quality: 4.7

Yield: 1.2

Momentum: 5.0

Volatility: 3.3

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STMicroelectronics

A-Score: 3.6/10

Value: 5.4

Growth: 5.2

Quality: 4.7

Yield: 1.9

Momentum: 2.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

43.51$

Current Price

43.51$

Potential

-0.00%

Expected Cash-Flows