A Market View from Infineon's IPC Division

The current economic climate has not been kind to manufacturers. Last year was difficult as a dip in demand put a lot of pressure on companies. Just as that disruption was past, we were hit by the coronavirus crisis, which has halted almost all production of products that are not intended for the global medical industry. Hopefully the worst of that is now over and companies are starting looking to regain some normality. Last week I was on a business update call with Infineon, who talked about the current market and how the company is approaching its recovery. The call was hosted by Dr Peter Wawer, Division President of the company’s Industrial Power Control (IPC) division and Dr Peter Friedrichs. Senior Director Silicon Carbide Technology. This article will focus mainly on the market status, and hopefully in the future we can catch up with the Silicon Carbide part of the presentation.

Unsurprisingly the presentation started off on the subject of coronavirus. Although Infineon has suffered disruption over the previous two months, currently all manufacturing plants back in operation and the company was capable of fulfilling its commitments. At the time of the call, there were still some disruption in the supply chain, particularly with subcontractors. Logistics and distribution also showed some disruption and the company has faced some challenges in getting products to customers. Capex spending had been slightly reduced, but Wawer believed that it would catch up with projections in the medium term. No delays were expected for new product introductions as Infineon has remained focussed on R&D, particularly in IGBT and Silicon Carbide technology.

There was a mixed view of market segments. While all markets had experienced disruption, some, such as home appliances and photovoltaics, were expected to recover quickly. Other markets had an expected recovery that will be much slower. These markets include drives, traction and wind. In the 2021 fiscal year, Wawer stated that he expects to see improvements in all areas, with the possible exception of drives. As for the company’s own figures, it expects there to be no seasonal variation, with stable revenue throughout the year. Second half revenue is expected to be in the same range as the first half. The book to bill ratio remains hovering around one.

After the market overview, the subject moved on to Infineon’s acquisition of Cypress Semiconductor. Although the purchase won’t affect the IPC division directly, Cypress technology still offers it some opportunities in filling gaps in the Infineon product portfolio and the ability to offer full system solutions. Cypress connectivity and computing technologies especially will be vital for getting the full benefit of automation and cloud-based digitisation.  

The coronavirus scare is set to have a lasting effect on the market, but the disruption may not be as bad as first feared if the markets pick up again quickly. The next few months will be challenging until we find out how quickly that will happen. Every country seems to have a different plan for emerging from the crisis, so it is likely that some regions and markets will pick up quicker than others. 

PSD