 "Semiconductors, Chips")
Challenges persist for the semiconductor industry as three chipmakers warned of subdued demand in 2024, particularly in the industrial and wireless technology segments.
Infineon Technologies AG, one of Europe’s biggest chipmakers, lowered its sales guidance as demand from industrial customers falls. The second quarter is expected to be particularly difficult with a “noticeable decline” in sales for power and sensor chips for industrial applications, it said in a statement. Its stock fell as much as 2.8% in German trading.
“In consumer, communication, computing and Internet of Things (IoT) applications, we are not anticipating a noticeable recovery in demand until the second half,” Infineon Chief Executive Officer Jochen Hanebeck said.
A slowdown in industrial production was also apparent at competitors STMicroelectronics NV and Texas instruments Inc., which both gave disappointing forecasts last month.
Nordic Semiconductor ASA’s guidance for the first quarter of 2024 was lower than expected, with Morgan Stanley analysts warning of “prolonged” weakness. It now sees revenue of $70 million to $80 million in the first quarter, according to a statement Tuesday, short of the $114.5 million estimate. The stock slumped as much as 23% in Oslo.
“Bluetooth customers remained cautious and continued to draw on inventories also in the fourth quarter,” the Norwegian firm said. Revenue fell 43% to $108 million in the quarter.
Renishaw Plc, which makes encoders for semiconductor equipment, also sees continued weak demand in the industry, though predicted an improvement in the second half of the year. That sent the shares as much as 15% higher in London trading.
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Demand for automotive chips, which accounts for more than half of revenue at STMicroelectronics and Infineon, is set to remain more resilient despite a slowdown in demand for electric vehicles. Infineon’s expectation for the automotive market remains “virtually unchanged,” Hanebeck said.
STMicro and Infineon are in a better position than Texas Instruments as they have strong exposure to electric vehicles and both expect to increase auto revenue in 2024, Bernstein analyst Sara Russo said in an email.
“But the immediate impact of inventory corrections is holding those share prices back as we factor in lower margins and pressure on top line growth that is expected for 2024,” she wrote.
