German auto chipmaker Infineon Technologies said it expects flat sales in the current quarter, as uncertainties about tariffs weigh on customers’ spending plans and dampen an industry recovery.
Revenue in the period ending in September will be flat from a year earlier at about EUR3.9 billion ($5.8 billion), Infineon said in a statement on Tuesday. That compares to an average analyst estimate of EUR4 billion, according to data compiled by Bloomberg.
CEO Jochen Hanebeck said that while the glut that’s been pressuring the industry for several quarters is easing, “we and our customers are continuing to navigate our way through an uncertain macroeconomic and geopolitical situation”.
Europe’s semiconductor industry is assessing the impact of tariffs, which were set at 15% following a trade agreement between the US and European Union last week.
Hanebeck cut the company’s outlook for the year in May, shaving 10% off of expected revenue in the fourth fiscal quarter due to tariff disputes. The company’s peers, including NXP Semiconductors and STMicroelectronics, didn’t flag such a negative impact.
“Investments are being held back, especially in the automotive industry” due to trade tensions, Hanebeck said at an event with German Economic Minister Katherina Reiche on Monday at the company’s Dresden site.
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There’s also a risk that demand may soften after some customers built up inventories before the levies were announced. Texas Instruments executives said last month they saw strong orders early in the second quarter, which then returned to more normal levels.
Infineon’s third quarter revenue was EUR3.7 billion, in line with expectations. Net income fell 24% from a year earlier to EUR305 million.
The company expects revenue for the current fiscal year of EUR14.6 billion, compared to EUR14.96 billion in 2024. Infineon previously said that revenue would be slightly lower this year.
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Infineon also slightly raised the outlook for its adjusted gross margin in the fiscal year to at least 40%, from around 40% previously.
“While overall revenue trends are slightly below our and the market’s expectations, we believe this is mainly due to tariff uncertainty in the US and some signs of weakness in the China car market,” Jefferies analysts Janardan Menon and Om Bakhda wrote in a reaction to the results. “With tariff uncertainty subsiding, we remain positive on the cyclical and structural growth outlook, and further margin recovery.”
