Infineon warns of weak 2025 as chip demand slows

• Infineon expects “subdued” performance in 2025, revising its revenue forecast to 15 billion euros amid weak demand.
• The company plans 1,400 job cuts and the relocation of 1,400 roles as part of its cost-saving measures.

What happened

Infineon warned on Tuesday that it expects “subdued” performance in 2025 due to weak demand in its end markets. The company has already revised its annual revenue guidance twice this year, now forecasting around 15 billion euros. Infineon also expects a drop in its segment result margin, from 20.8% to between 15% and just below 20% for the 2024-2025 period.

For the financial year ending in September, the chipmaker reported fourth-quarter revenue of 3.919 billion euros, in line with company forecasts of 4 billion euros. Operating expenses for 2023-2024 amounted to 220 million euros, mainly due to Infineon’s “Step Up” cost savings programme, which will continue to improve competitiveness. This programme includes 1,400 job cuts and the relocation of a further 1,400 roles to countries with lower labour costs.

Infineon’s results are in line with its industry peers. Intel posted a revenue decline last month, while NXP Semiconductors forecast weaker-than-expected fourth-quarter revenue, citing uncertain demand and broader economic challenges in Europe and the Americas.

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Why it is important

Infineon’s warning of subdued performance in 2025 highlights the ongoing challenges facing the semiconductor industry. Weak demand in key markets, combined with revised revenue forecasts, signals potential difficulties for the company in the coming year. This is important as Infineon is a major player in the global chip market, and its struggles reflect broader trends affecting the industry. The forecasted drop in segment margins and job cuts due to cost-saving measures shows how companies are adjusting to economic uncertainty. Infineon’s “Step Up” programme, involving 1,400 job cuts and the relocation of roles, highlights the company’s efforts to stay competitive amid economic pressures. Infineon’s results also mirror those of other industry giants, such as Intel and NXP Semiconductors, which are facing similar challenges. These developments are significant as they signal potential disruptions in the tech supply chain, affecting everything from consumer electronics to the automotive industry.