Infineon forecasts more than 20% revenue growth in fiscal 2027 on AI data center power demand

German semiconductor maker Infineon on November 10 forecast revenue growth of more than 20% for fiscal 2027 and an increase of about 5 percentage points in profitability, driven by demand from data centers, power infrastructure and software-defined vehicles.

A record quarter

Fourth-quarter revenue, for the period ended September 30, came in at a record 4.706 billion euros, with a segment result of 1.119 billion euros and a segment result margin of 23.8%, the company said. Full-year revenue rose 12% to 16.353 billion euros, with a segment result margin of 19.7% and adjusted free cash flow of 1.925 billion euros.

Fiscal 2027 outlook

Infineon expects fiscal 2027 revenue of around 20 billion euros, including close to 4 billion euros from power supplies for data centers. It forecasts a segment result margin in the mid-20% range, investments of 3.0 billion to 3.5 billion euros and adjusted free cash flow of about 2.2 billion euros. Management plans to propose raising the dividend to 0.38 euros per share from 0.35 euros.

Infineon does not make AI processors like those designed by Nvidia, but supplies the power chips that help deliver electricity from the grid to data center equipment.

On the US backlash

Opposition to the environmental and energy costs of data centers has grown in the United States, with many Democratic winners in the recent midterm elections vowing to put a brake on projects. Chief executive Jochen Hanebeck nonetheless told an earnings call that the buildout would not slow, calling the debate a "rather American-centric topic," according to AFP. He said hyperscalers would find sites outside the US, in sparsely populated regions, and that data center expansion would diversify regionally.

"AI delivers real value, and its importance will only grow," Hanebeck said, calling the technology a key driver of Infineon's growth and profitability.

Sources: Infineon, StreetInsider / Reuters, AFP