It's a similar story — just another company telling it.
Infineon Technologies AG told industry watchers this week that the global economic jitters are causing a general slowdown, and that customers are pushing back on orders. The semiconductor maker had a profitable but flat fourth fiscal quarter, and it's predicting that sales will drop by a “mid-single-digit percentage” in fiscal 2012, said CEO Peter Bauer.
“It's extremely difficult to make any good forecasts for 2012 at this time,” Bauer conceded during a call with journalists. “We ask customers today about their orders, and tomorrow it's different. It's very hard to assess right now.”
Despite the uncertainty, Bauer said Infineon is not expecting — or planning for — a crash of the magnitude seen in 2009. It anticipates a “slight recessionary cycle” instead.
“What we are seeing are more postponements for future quarters. In the current quarter, there were a few cancellations, but there have been more pushouts” on orders, Bauer said. “This is related to the psychological effect of the economic situation. People aren't saying they don't need the parts, but everyone is being more cautious” about saying when they need them.
This isn't much different from what we've been hearing from other companies, and it seems to be in line with the general economic reports coming out. (See: Siemens Reports Growth but Expects Slower 2012 and ST’s Q3 Results Signal Broader Market Problems.)
For the quarter that ended Sept. 30, Infineon booked sales of €1.04 billion ($1.4 billion), up 10% from a year earlier but almost flat from the third fiscal quarter. The company posted a quarterly net profit of €125 million ($169 million), down 68 percent from a year earlier and 34 percent from the third fiscal quarter.
For the full fiscal year, sales rose 21 percent to slightly under €4 billion ($5.4 billion), and income from continuing operations more than doubled to €744 million ($1 billion). Including gains from the sale of its wireless mobile phone business, net income exceeded €1 billion ($1.3 billion).
For the current quarter, the company expects a 10 percent sales decline. For this fiscal year, it expects its revenue decline to level off at a mid-single-digit level, Bauer said.
Two area executives said a plus for Infineon, particularly in the longer term, is its continued focus on R&D and ongoing investment in 300mm wafer production.
Bauer said that since his company provides more tailored, less commodity-oriented semiconductors, demand from R&D innovations remains robust, and spending will be relatively on par with previous years' levels. “In semiconductor design, standing still is a step backwards. Most of our development work is closely linked to our customers' projects, and there is no decline in interest there.”
Infineon is also evaluating how it will develop its 300mm capacity — which Bauer said brings about a “quantum leap” in semiconductor manufacturing and will secure higher-volume production of power semiconductors — while balancing the need for less expensive 200mm wafer output in other regions. This year the company purchased manufacturing facilities and property in Dresden, Germany, and it is committed to expanding this know-how out of its European base. Its Malaysian plant will remain the company's 200mm sweet spot.