BERLIN, February 4, 2026, 20:08 CET
- Infineon raised its projected FY2026 investments to roughly €2.7 billion, up from €2.2 billion
- The chipmaker aims for roughly €1.5 billion in AI data-centre revenue this year, growing to around €2.5 billion by FY2027
- CEO Jochen Hanebeck revealed the company is accelerating expenditures to boost manufacturing capacity
On Wednesday, Infineon bumped up its planned investment for fiscal 2026 by roughly €500 million, bringing the total to €2.7 billion. The boost targets expanding manufacturing capacity for chips powering AI data centers. The German chipmaker expects AI-related revenue to climb to around €2.5 billion in fiscal 2027, up from approximately €1.5 billion this year. (Reuters)
This shift highlights how rapidly expanding AI infrastructure is disrupting the chip supply chain, putting pressure on power conversion and control components as data-centre operators ramp up capacity. For Europe’s chipmakers, traditionally focused on industrial and automotive sectors, AI-driven spending offers a cushion against weaker demand in other areas.
Infineon’s traditional strength lies in automotive and industrial sectors, but these markets can shift rapidly as customers clear out inventory. The company is ramping up factory investments now, betting that the AI boom will hold steady, making early spending and an extended production ramp worthwhile.
“The sharply rising demand for AI, despite a generally weak market, is giving Infineon a big boost,” CEO Jochen Hanebeck said. He added that the company is “accelerating” investments to better match capacity with this growing demand.
Hanebeck said the focus is “power supply solutions for AI data centers,” with grid infrastructure set to follow “in the coming years.” He also noted that a “significant portion” of the budget will accelerate the launch of Infineon’s new Smart Power Fab in Dresden, planned to open this summer.
Infineon posted first-quarter revenue of €3.662 billion for the period ending December 31, 2025. The company’s segment result margin—which it uses as its key measure of operating profitability across divisions—stood at 17.9%.
Revenue in the Power & Sensor Systems division, covering products for servers and AI data centres, dropped 3% from the previous quarter to €1.171 billion. Infineon expects this segment to outpace the group’s overall growth this year, fueled by strong data-centre demand.
Infineon expects revenue of about €3.8 billion in the second quarter, with a segment result margin falling somewhere in the mid-to-high teens. The company maintained its full-year 2026 outlook for moderate revenue growth, based on an assumed exchange rate of $1.15 per euro.
The larger investment plan brings some trade-offs. Infineon lowered its free cash flow forecast to around €1.0 billion from €1.1 billion and also reduced its adjusted free cash flow target to about €1.4 billion, citing increased spending and the timing of the ramp-up.
Chipmakers not typically associated with data-centre processors are now jostling for AI-driven growth. NXP’s CEO Rafael Sotomayor told Reuters this week that products featuring “inherent AI capabilities” represent “the fastest growing part” of its industrial lineup. He also noted that the global data-centre expansion is boosting some segments of their business. (Reuters)
Jefferies analyst Janardan Menon noted that Infineon’s Q2 guidance matched expectations. He highlighted the €2.7 billion investment plan, saying it’s “mainly targeted at raising AI power capacity for future years,” reflecting the growing share of AI-related revenue in the company’s business. (Investing)
