BERLIN (Reuters) - German chipmaker Infineon Technologies (IFXGn.DE) on Thursday withdrew its forecast for revenue to grow by 5% in the fiscal year to Sept. 30, saying the coronavirus pandemic could lead to a noticeable decline in revenue.
Infineon is a leading maker of power management chips used in electric drivetrains, exposing it to a sudden stop in car production and sales after coronavirus broke out in China at the turn of the year and then spread around the world.
“The anticipated reduction in revenue will weigh on Infineon’s profitability in the 2020 fiscal year,” Munich-based Infineon said in a statement issued through the Frankfurt Stock Exchange.
Infineon said that all of its production sites were operational, some at reduced levels, including in Malaysia and the U.S. state of California that have imposed lockdowns, while raw material supplies were currently sufficient.
For the current quarter to March 31, revenue is seen towards the lower end of the guided range of 5%, plus or minus 2 percentage points, the company said.
“The second half of the 2020 fiscal year will be impacted by the negative economic consequences of disruptions caused by virus containment measures across several of Infineon’s key end markets and regions,” the company said.
The number of cars produced and sold is predicted by market researchers to decline considerably in all major markets compared to 2019, it said. The China situation is normalizing slowly but automotive demand is being negatively hit by stay-at-home rules in many countries.
Infineon’s shares, which have lost around a third in value in the year to date, traded around 2% weaker.
Reporting by Douglas Busvine;Editing by Elaine Hardcastle