Infineon Expects Data Centre Power Sales to Near €4 Billion as Revenue Climbs 20%

The forecast is one of the clearest readings so far from a supplier outside the processor business on whether AI infrastructure spending is holding up after last week's sell-off in AI stocks. Infineon makes the power semiconductors that convert and route electricity from the grid connection down to the processors inside servers, so its sales track the number of data centre racks being built rather than the fortunes of a single chip designer.

The data centre forecast compares with about €2.2 billion of data centre revenue in fiscal 2026, according to figures given on the company's earnings call. Of that, €1.7 billion came from power solutions dedicated to AI, a figure that more than doubled for the second year running. In February, Infineon had said it expected about €2.5 billion of AI-related revenue in fiscal 2027. This time it did not give a separate AI number, folding it into the wider data centre forecast.

"Infineon closed the fiscal year 2026 with another record quarter," chief executive Jochen Hanebeck said in the results statement, adding that "we expect a significant increase in revenue and profitability in fiscal year 2027." On the call he said AI had driven "unprecedented structural growth" for the company.

Revenue in the July-to-September quarter rose 13% from the previous three months to €4.706 billion, and was 19% higher than a year earlier. The segment result, Infineon's main profit measure, came to €1.119 billion, a margin of 23.8%, and profit for the period was €532 million.

For the full year to the end of September, revenue rose 12% to €16.353 billion. The segment result was €3.223 billion, a margin of 19.7%, and adjusted diluted earnings per share were €1.73. Free cash flow was €993 million, or €1.925 billion on an adjusted basis. The board will propose a dividend of €0.38 a share, up €0.03, which would cost about €494 million and goes to a shareholder vote in February 2027.

For fiscal 2027, Infineon expects a segment result margin in the mid-20s percent, about five percentage points above this year, and an adjusted gross margin in the mid-to-high 40s. It plans to invest €3.0 billion to €3.5 billion and expects adjusted free cash flow of about €2.2 billion, or about €1.8 billion on a reported basis. Its automotive business is forecast to grow by a mid-teens percentage, while the division that includes data centre power products is expected to grow significantly faster than the group. The outlook assumes a euro-dollar rate of 1.15.

The guidance leaves out the planned sale of Infineon's NOR Flash and F-RAM memory businesses to Winbond, which the company said could add up to €1 billion to free cash flow in fiscal 2027 if the deal closes.

The climb will not be smooth from the start. Infineon expects revenue of about €4.6 billion in the October-to-December quarter, a slight dip from the record fourth quarter, with a segment result margin of about 23%.