Infineon to make power chips on large wafers
Automakers to get more computing power with less electricity use
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VILLACH, Austria (Reuters) -- Germany's Infineon will become the world's first chipmaker to produce more profitable chips on large, 300mm (12-inch), thin wafers, it said. CEO Reinhard Ploss said Tuesday the company was ready to ramp up production in Austria and Germany as soon as there was sufficient demand from automakers and other industries for the chips.
Larger chips mean higher margins as two-and-a-half times as many chips can be made from a single wafer as from the 200mm wafers used for power chips now, while the near paper-thinness reduces the amount of the raw material silicon that is needed.
Power chips provide more computing power while using less electricity.
"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 percent and 9 percent this fiscal year to end-September, down from 13.5 percent 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.
Said CEO Ploss: "We are not thinking about the cyclicality of the market. 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 300mm wafer power chips from several key distributors, who supply chips to numerous companies of all sizes.
Infineon has invested about 255 million euros ($340 million) in the new power-chip technology at its plants in Villach, Austria, and Dresden, Germany, where it plans volume production. Like many other chipmakers, it has reduced its capital expenditure plans to maximize profits, and plans to invest about 400 million euros this fiscal year.
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