Infineon boosts investment target by 500 million euros to meet data centre demand

BERLIN, Feb 4 (Reuters) – Germany’s Infineon, whose chips power AI data centres, said it plans to invest an extra 500 million euros ($591.65 million) in manufacturing capacity this fiscal year as it expects revenue from that business to grow by two-thirds in 2027.

The company on Wednesday increased its planned investments for its 2026 fiscal year that began on October 1 to 2.7 billion euros, with a focus mainly on chips that power the data centres.

As a result, it said it expects revenue from its AI business to hit 1.5 billion euros in the current year and reach 2.5 billion euros in the next one.

Shares were up 2.6% in early trade after the results.

“The very dynamic demand for AI, against an otherwise subdued market backdrop, is providing strong tailwinds to Infineon,” CEO Jochen Hanebeck said.

“To serve our customers in the best possible way, we are aligning our manufacturing capacity to meet further rising demand and are bringing forward our investments in this area,” he added.

Infineon also reported group first quarter revenue of 3.66 billion euros, slightly above the 3.62 billion euros expected in a poll of analysts by Vara Research published on January 27.

Its segment result margin – Infineon’s preferred measure of operating profitability – also beat expectations by reaching 17.9% for the fiscal first quarter ending in December.

Revenue for Infineon’s power and sensor systems segment was down 3%, at 1.17 billion euros, compared with the previous quarter, but is expected to grow at a much faster rate than the group average over the year on data centre demand, it said.

($1 = 0.8451 euros)

(Reporting by Hakan Ersan and Miranda Murray, editing by Linda Pasquini and Andrew Heavens)