NEUBIBERG (dpa-AFX) - The semiconductor manufacturer Infineon has lowered its forecast for the current year for the second time in a row. The industry continues to suffer from high inventory levels, demand for consumer-related applications continues to weaken. And now the previously robust growth in chips for the automotive industry is also slowing due to a dip in electromobility in Western markets. Infineon now wants to take countermeasures with a cost-cutting program. Investors are also betting that the worst will soon be over. The share price rose significantly on Tuesday.

The chip market remains tense. Away from the hype surrounding semiconductors for artificial intelligence (AI), competitors such as STMicroelectronics have recently complained that demand from the automotive sector - a business area in which Infineon is strongly represented - has fallen contrary to expectations. The lowering of Infineon's forecast therefore comes as no surprise to market experts.

The share price jumped by more than five percent. The lower annual targets should certainly give investors more confidence in the business recovery, noted Bernstein analyst Sara Russo. The reason: the predictability of the low point of the trend has improved.

Infineon is "cautious" about the rest of the financial year, explained CEO Jochen Hanebeck at the presentation of the figures for the second quarter in Neubiberg. The management intends to cut costs and counteract the erosion of earnings with a package of measures. Hanebeck held back on details in a telephone conference. Apparently, job cuts have not been ruled out. However, "possible effects on employees" will be communicated in the coming days and weeks.

According to Infineon, the program will focus on the areas of "manufacturing productivity, portfolio management, price quality and operating costs". The company's innovative strength is not to be impaired in the process. The management is also sticking to the expansion of production in Dresden and Kulim. In the medium and long term, decarbonization and digitalization will remain strong structural drivers for the company's growth trajectory, according to Hanebeck.

The program is expected to have a positive impact on segment earnings in the high triple-digit million euro range per year. Infineon expects the first financial benefits in the course of the 2025 fiscal year, with the full effect expected to take effect in the first half of the 2027 fiscal year.

For the current 2023/24 fiscal year (as of the end of September), the semiconductor group now expects sales of around 15.1 billion euros plus/minus 400 million euros. This is 900 million less in the middle of the range than initially forecast. Around half of this is due to the weakening automotive business, said Hanebeck in the telephone conference. The growth prospects for the division have therefore also been reduced. In the Green Industrial Power division, Infineon expects a sharper decline in sales than previously announced. Here, demand for renewable energies and energy infrastructure has recently remained weak due to high customer inventories. Infineon also became more pessimistic for the other segments.

The Group's segment result margin, which reflects the operating result, is expected to be around 20 percent. Previously, Infineon had issued a segment result margin in the low to mid-20s percent range.

In the second quarter, Infineon recorded further declines in revenue and earnings compared to the previous quarter. Compared to the first quarter, sales fell by two percent to 3.6 billion euros. The segment result fell by 15 percent to 707 million euros, which was slightly better than expected by analysts and the company. After taxes, Infineon earned 394 million euros, a third less than in the previous quarter.

For the third quarter, Infineon is expecting sales to rise again to around 3.8 billion euros. The segment result margin is expected to be in the upper ten percent range, after 19.5 percent in the second quarter./nas/mne/mis