Infineon and AMS Warn Investors as Demand Hits Europe Tech

Infineon and AMS Warn Investors as Demand Hits Europe Tech
Fotolia

Infineon and AMS have warned investors about future growth, adding to investor concerns about prospects for chipmakers and Apple suppliers, according to Bloomberg. Infineon said it sees revenue growth at the lower end of the forecast range in the 2019 financial year, and plans to reduce investments.

AMS, which supplies sensors to companies including Apple, said it would suspend its cash-dividend policy and scrap numerical year-ahead guidance as its first-quarter revenue forecast missed analysts’ estimates. Nordic Semiconductor ASA, a wireless chip company, also reported a loss wider than analyst estimates.

Results from tech companies remain mixed, after Apple shook investors in early January with a warning, while the ongoing tensions over trade talks between the U.S. and China continues to knock investor confidence. Germany-based Infineon, which competes with NXP and STMicro, is pushing into the growing market for electric cars and renewable energy that provides fresh revenue streams.

Infineon expects year-on-year revenue to increase 9 percent, based on an exchange rate of $1.15 per euro. Sales in the fiscal first-quarter amounted to 1.97 billion euros, meeting analysts estimates. However. the chipmaker said it will reduce planned investments in 2019 to about 1. 5 billion euros, from a range of about 1.6 billion euros to 1.7 billion-euros. It’s sticking with a plan to build a new production facility in Villach, Austria.

The Austrian-based chipmaker AMS said it’s expecting first-quarter revenue of between $350 million and $390 million on the basis of available information, reflecting “unexpected weakness“ in customer demand in its consumer business.“ That’s below analysts estimates of $404.5 million. AMS’s weaker forecast is due to a “current more unfavorable end market environment and subdued smartphone demand in addition to characteristic first-quarter consumer market seasonality,“ the company said in a statement.