Infineon gets nod to manufacture for power chips on large wafers

Written By Unknown on Selasa, 19 Februari 2013 | 21.43

VILLACH: Germany's Infineon will become the world's first chipmaker to produce more profitable chips on large, 300 mm (12 inch), thin wafers, it said.

This means higher margins as two-and-a-half times as many chips can be made from a single wafer as from the 200 mm wafers used for power chips now, while the near paper-thinness reduces the amount of the raw material silicon that is needed.

Chief Executive Reinhard Ploss told journalists on Tuesday the company was ready to ramp up production in Villach, Austria and Dresden, Germany as soon as there was sufficient demand for the energy efficient chips, which are used in industries including energy supply and carmaking.

Power chips provide more computing power while using less electricity.

Infineon shares rose 2 percent to 6.38 euros by 1027 GMT, and were among the top gainers in the European technology index , which rose 0.6 percent.

"It's a milestone in the history of the company. I hadn't expected them to reach it so quickly," said analyst Guenther Hollfelder of Baader Bank. "It gives them a chance in the medium term to get back to their peak margins of about 20 percent."

Infineon is targeting a core operating profit margin of between 5 and 9 percent this fiscal year to end-September, down from 13.5 per cent the previous year.

Hollfelder said the endorsement gave Infineon a significant advantage over its main rivals in power chips, Fairchild and International Rectifier of the United States, while also protecting it from emerging competitors in Asia.

Showing the possible
Ploss said no significant revenue should be expected from power chips produced from 300 mm wafers this fiscal year, which runs to end-September, while a net return on investment would take "a couple of years" to be seen on the bottom line.

"We are not thinking about the cyclicality of the market," Ploss said. "We want to show the market what is possible."

The global chip market has suffered post-financial crisis as consumer and industrial demand collapsed across all sectors.

Infineon said last month it believed the bottom of the market had been passed, and that its biggest carmaker customers were beginning to replenish run-down inventories - although other chipmakers are less optimistic.

Ploss said Infineon had won support for its 300 mm wafer power chips from several key distributors, who supply chips to numerous companies of all sizes.

More than half of the sales of Infineon's power management and multi-market unit, its most profitable division, go through distributors.

Infineon has invested about 255 million euros ($340 million) in the new power-chip technology at its plants in Villach and Dresden - where it plans volume production.

Like many other chipmakers, it has reduced its capital expenditure plans to maximise profits, and plans to invest about 400 million euros this fiscal year.


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