Infineon Reports Sales Growth, Capacity Expansion

Infineon grew faster than the market and its direct competitors during the third quarter of the fiscal year, with Total Segment Result margin remaining at last quarter's high levels.

"Our excellent results continue to prove that Infineon's focus on energy efficiency, mobility and security is the right strategy," says Peter Bauer, CEO of Infineon Technologies.

Infineon has also announced that it will further extend its technology leadership by driving 300mm thin wafer manufacturing of power semiconductors out of the newly-acquired facility in Dresden. The company will also expand the cost-efficient 200mm manufacturing site in Kulim, Malaysia.

Fiscal Third Quarter 2011: Growth in IMM and ATV drives sales and Total Segment Result
The original guidance called for flat revenues. Sales growth was driven by strong demand in Industrial & Multimarket (IMM) as well as revenue growth in Automotive (ATV). Counter to original expectations, the ATV division did not experience any significant negative impact neither on revenue nor on Segment Result from disruptions within the automotive supply chain after the Japan earthquake.

Infineon reported net income from continuing operations of Euro175 million, up from Euro 173 million in the second quarter. Basic earnings per share from continuing operations stayed unchanged compared to the preceding quarter at Euro0.16 and diluted earnings per share from continuing operations increased from Euro0.15 to Euro0.16.

Income from discontinued operations, after income taxes, was Euro15 million for the third quarter, down from Euro 399million in the second quarter. Net income from discontinued operations decreased mainly as the second quarter of the 2011 fiscal year contained a non-recurring after tax gain of Euro378 million relating to the closing of the sale of the Wireless mobile phone business to Intel on January 31, 2011.

Net income for the group was Euro190 million in the third quarter, a decrease from Euro572 million in the previous quarter. Third quarter basic and diluted earnings per share were Euro0.17, down from Euro0.53 and Euro0.50, respectively, for basic and diluted earnings per share in the second quarter of 2011 fiscal year.

Operating cash flow from continuing operations amounted to Euro311 million for the third quarter of the 2011 fiscal year, up from Euro177 million in the prior quarter.

Investments from continuing operations, which the company defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized research & development (R&D) expenses, were Euro319 million in the third quarter of the 2011 fiscal year, compared to Euro 164 million in the second quarter.

Cash position remains comfortable
As of June 30, 2011, the company's gross cash position stood at Euro2.585 billion with a net cash position of Euro2.246 billion. Compared to the end of the prior quarter, both positions decreased versus values of Euro2.691 billion and Euro 2.335 billion for gross and net cash, respectively.

Expansion of production capacity
In order to secure further growth, Infineon decided to begin building a shell for a second 200mm clean room at its existing, highly cost-competitive front-end site in Kulim, Malaysia. Capitalizing on its competitive lead in the manufacturing of power semiconductors on 300mm wafers, Infineon furthermore resolved that it will use the clean room that was purchased in May 2011 for the mass manufacturing of power devices on 300mm wafers. Until 2014 Infineon will invest around Euro250 million and create approximately 250 jobs in Dresden. If the market, revenue and underlying conditions develop in line with forecasts, further expansion would be possible.

Infineon Technologies