Infineon Guides to €20 Billion as Data-Center Power Nears €4 Billion

Infineon expects fiscal 2027 revenue of about €20 billion, growth of more than 20%, with data-center power sales approaching €4 billion. The Munich-area chipmaker set the guidance on Tuesday as it reported a record fourth quarter. Shares rose 6.6% in morning trading, according to Reuters.

The fiscal year began October 1. Alongside the revenue target, Infineon forecasts a Segment Result Margin in the mid-twenties percent and investment of €3.0-3.5 billion.

What drove the record quarter?

Q4 revenue rose 19% year on year to €4.706 billion, and 13% from the third quarter. Segment Result, the company's main operating profit measure, climbed 40% quarter on quarter to €1.119 billion. The margin widened to 23.8% from 19.1%.

Power & Sensor Systems, the unit selling power chips for AI servers, grew 25% from Q3 to €1.796 billion and posted a 30.8% margin. Infineon named AI server and data-center demand as the main driver. Automotive revenue rose 8% to €2.089 billion, Green Industrial Power rose 13% to €503 million, and Connected Secure Systems fell 9% to €318 million on lumpy ID-document and payment-card projects.

Adjusted gross margin reached 45.1%, up from 42.8% in Q3 and 40.7% a year earlier. Profit for the period was €532 million, against €423 million in Q3 and €231 million a year ago. Adjusted diluted EPS was €0.60.

How big is the data-center business now?

In fiscal 2026, Infineon sold €1.7 billion of power products for AI data centers — more than double the prior year and slightly over 10% of group revenue — plus about €500 million for conventional data centers. CEO Jochen Hanebeck gave the figures at the results press conference.

The February target of about €2.5 billion in AI power revenue for fiscal 2027 has been replaced by a broader figure: close to €4 billion covering both AI and conventional data centers. Hanebeck said multiyear supply agreements and capacity reservations, signed and under negotiation, now exceed €10 billion in revenue volume.

"Supported by an ongoing cyclical recovery and strong demand in our structural growth areas, we expect a significant increase in revenue and profitability in fiscal year 2027," Hanebeck said.

Where will the €3.5 billion go?

For the December quarter, Infineon guides to about €4.6 billion of revenue — nearly flat on Q4, which management called significantly better than usual seasonality — with a Segment Result Margin of about 23%.

Full-year plans include:

• Adjusted gross margin in the mid-to-high 40s percent
• Segment Result Margin in the mid-twenties
• Adjusted free cash flow of about €2.2 billion
• Investment of €3.0-3.5 billion, largely to ramp the fourth Dresden fab building, expand silicon carbide capacity in Kulim, Malaysia, and start 300mm gallium nitride production in Villach, Austria

The new Power Systems segment is expected to grow significantly faster than the group, Automotive by a mid-teens percentage and Edge Systems by a low-teens percentage.

For fiscal 2026 as a whole, revenue rose 12% to €16.353 billion and adjusted EPS was €1.73. The board plans to propose a dividend of €0.38 a share, up €0.03.

The forecast excludes the pending sale of the NOR Flash and F-RAM memory business to Winbond, which could add up to €1 billion to free cash flow if the deal closes. With €10 billion in committed volume and three fabs ramping at once, Infineon is betting that AI power delivery remains a seller's market through 2027.