Chip crisis: Infineon benefits – economy

The bad news came right on time for the anniversary: ​​Exactly 90 years ago, the first Ford model built in Germany rolled off the production line in Cologne. Hardly anyone at the company is in the mood to celebrate, because Ford had to announce at the same time that production will now be temporarily suspended. The reason: The US company is also missing important semiconductors for the German plant. Ford is not an isolated case; automakers around the world are currently unable to produce because the chip manufacturers cannot deliver. Daimler, for example, is sending thousands of employees on short-time work, especially in the Mercedes plants in Rastatt and Bremen. Other important industries, such as manufacturers of electronic goods, are also affected by the chip crisis.

There is no quick remedy in sight. “We expect the imbalance between supply and demand to persist for some time – with the risk that it will continue until 2022,” said Reinhard Ploss on Tuesday. The CEO of Infineon primarily blames suppliers for the bottleneck. Large contract manufacturers who in turn supply Infineon have not invested enough to meet demand. Infineon, the largest chip supplier in Europe, produces so-called power semiconductors and logic chips itself, but for microcontrollers they are also dependent on suppliers.

The new plant in Villach is due to go into operation three months earlier

Some semiconductor companies have already announced massive investments. One of the big players, TSMC from Taiwan, is already planning further factories in the US state of Arizona and had announced that it would invest 100 billion dollars in the expansion of capacities over the next three years. Intel is investing billions more in the expansion of its production in the USA and also brought Germany into discussion as a possible location. In Europe, the production of chips is to be expanded anyway, and the responsible EU Commissioner Thierry Breton is pushing for this. Infineon is currently building a production facility in Villach, Austria, which will now be put into operation three months earlier than planned, announced Ploss. Even more can be produced at the Dresden production site. All factories are currently running at full speed. One problem was that the Infineon plant in Austin, Texas, had to be shut down due to a winter storm and the subsequent power outage. Production could not be fully resumed until June.

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The shortages in semiconductors result primarily from the high demand, and the industry cut back production during the pandemic last year. The new Intel boss Pat Gelsinger had already warned repeatedly that the chip bottlenecks could last for several years, also because investments do not take effect immediately. Infineon boss Ploss now also said that a significant increase in capacities would take time. Infineon itself invested earlier than many of its competitors. It is unclear whether the semiconductor industry as a whole will now – as in the past – invest in a new pig cycle, i.e. now invest heavily in the construction of plants, so that in a few years there will be a massive oversupply on the market and the industry will face deep problems.

In any case, Infineon is currently benefiting from the crisis. After a good quarter, the forecast for the current financial year was raised for the second time until the end of September. “Chips are in demand like never before,” says Ploss. It will continue like this for the time being. Electronics for the energy transition and for work and life at home remain in demand, and more and more chips are also being built into cars. But the share was in the red.


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