German chipmaker Infineon, considered a candidate for state aid just over six months ago, hiked its first-quarter outlook on strong demand from carmakers as well as industrial and consumer markets.
The company said it now expects high single-digit sales growth in the three months through December compared to its fourth quarter, and an operating profit margin in the high-single digit percentage range.
In the previous outlook for the fiscal first quarter Infineon had seen revenues and the combined segment result to be about on the same level as in the fourth quarter. The news came a day after shares in Intel, the world's largest microchip maker, were boosted by a Barclays note which upgraded its rating in the company to "overweight" from "equal", citing solid demand in end markets.
After a tough year fighting for survival, Infineon - No 4 among mobile chipmakers - pulled through due to gradually improving demand, the sale of its wireline unit, tight cost controls and a capital hike.
The group now has four units left: Automotive, Industrial & Multimarket, Chip Card & Security, and Wireless Solutions. Analysts are divided about the prospects of the semiconductor industry, with some, such as Morgan Stanley, warning that inventory was creeping up and revenue growth could peak in early 2010, while others see a revival in the industry.
Infineon Chief Executive Peter Bauer told Reuters in an interview earlier this month that he wanted the company to be among the top three wireless chipmaker with double-digit operating margins. Infineon's wireless unit makes chips for mobile phones, including those from LG and Samsung, and while the company will not comment, it is an open secret that it also produces the chip for Apple's iPhone.
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