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Infineon considers shifting more chip capacity to the US

Update time : 2023-06-15 10:29:36

Infineon, the world's largest supplier of silicon carbide chips for vehicles, said it is considering moving more production capacity to the US to better comply with recently passed US legislation aimed at boosting the US semiconductor industry, according to foreign media reports. Last year, 11% of Infineon's revenue came from the US, while 29% came from mainland China.

Peter Wawer, head of Infineon's environmental technology division, said the company was reviewing the requirements of the Inflation Reduction Act in relation to the value of goods made in the US. "We need to make sure we comply with these rules and requirements," said Wawer, "We don't want to be excluded from critical business because we don't have a certain value share in the US."
Infineon currently has seven manufacturing sites in the US and one in Mexico, thanks in large part to the company's acquisitions over the past decade, such as the $3 billion purchase of International Rectifier in 2015 and the $9 billion acquisition of rival Cypress Semiconductor in 2019. Wawer said that Infineon is currently satisfied with its production footprint in the US, but that in the future the company "may need to move some amount of products or capacity to the US".
Forty-five percent of Infineon's sales come from the automotive industry. Although car sales are slowing, Infineon believes that the company will benefit from the industry's transition to electric vehicles, which require more chips than internal combustion engine vehicles.
Amit Harchandani, Citi's head of European technology research, said Infineon's power chips make it a "big beneficiary of the transition to renewable energy". He said, "I expect any company that can benefit from the energy transition will evaluate the incentives in the US Inflation Reduction Act."
In 2022, Infineon had sales of €14.2 billion, with Wawer's Environmental Technologies division contributing 13 per cent of those sales. But Wawer said the increase in green energy infrastructure such as wind turbines, solar panels, electric car chargers and the transmission lines needed to connect all devices to the grid meant that demand for chips "will be explosive". Wawer said that the division expects annual revenue growth of more than 10 per cent "over the next few years".

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