Infineon guides to EUR 20bn revenue as AI data centre power demand surges
Europe's largest chipmaker closed its fiscal year with a record quarter and forecasts growth of more than 20 percent, driven by power chips for AI servers. Its cash flow guidance came in below analyst expectations as heavy investment continues.
Infineon Technologies, the Neubiberg-based semiconductor group, reported revenue of EUR 4.706bn for the fourth quarter of its 2026 fiscal year on Tuesday 10 November 2026, up 13% on the previous quarter, and forecast revenue of about EUR 20bn for fiscal 2027, according to the company's results release. That would be growth of more than 20%.
Infineon expects revenue from power supplies for data centres to reach close to EUR 4bn in the new fiscal year. Investing.com said the revenue outlook was a touch above analyst expectations of EUR 19.81bn, while the free cash flow guidance fell well short of forecasts. German news agency dpa-AFX, via wallstreet:online, also highlighted demand for power chips for AI data centres.
A record quarter to close the year
Infineon's fiscal year ended on 30 September 2026. In the fourth quarter, the Segment Result, Infineon's main operating profit measure, rose to EUR 1.119bn from EUR 797m in the previous quarter, and the Segment Result Margin improved to 23.8% from 19.1%. The adjusted gross margin reached 45.1%, compared with 42.8% in the third quarter. Profit for the period was EUR 532m, and adjusted diluted earnings per share were EUR 0.60.
Revenue rose significantly in the Automotive, Green Industrial Power and Power & Sensor Systems businesses, while Connected Secure Systems declined. For the full year, revenue grew 12% to EUR 16.353bn, the Segment Result was EUR 3.223bn and the Segment Result Margin was 19.7%. Free cash flow was EUR 993m and adjusted free cash flow EUR 1.925bn. According to dpa-AFX, profit from continuing operations rose to EUR 1.97bn from EUR 1.36bn a year earlier.
"Infineon closed the fiscal year 2026 with another record quarter and enters the new fiscal year with continued strong momentum," said CEO Jochen Hanebeck. He named semiconductors for data centre power supplies, the expansion and modernisation of energy infrastructure, electromobility and software-defined vehicles as the key contributors.
The fiscal 2027 outlook
Infineon has reorganised into three segments since 1 July 2026: Automotive (ATV), Edge Systems (ES) and Power Systems (PS). For fiscal 2027, at an assumed EUR/USD rate of 1.15, the company expects Power Systems to grow significantly faster than the group, Automotive to grow by a mid-teens percentage and Edge Systems by a low-teens percentage. The adjusted gross margin should be in the mid-to-high forties percentage range and the Segment Result Margin in the mid twenties.
For the first quarter of fiscal 2027, Infineon guides to revenue of about EUR 4.6bn and a Segment Result Margin of about 23%. The company describes that nearly stable level as significantly better than usual seasonality.
Where the money goes
Infineon plans investments of EUR 3.0bn to EUR 3.5bn in fiscal 2027, depending on customer demand. The main projects are equipment for the ramp-up of its fourth manufacturing building in Dresden, more silicon carbide capacity in Kulim, Malaysia, and the start of gallium nitride manufacturing on 300-millimetre wafers in Villach, Austria. Backend sites in Bangkok and Melaka are also set to expand.
That spending weighs on cash. Infineon expects free cash flow of about EUR 1.8bn and adjusted free cash flow of about EUR 2.2bn. Investing.com put analyst expectations at EUR 2.26bn and EUR 2.74bn respectively, and noted that fourth quarter profit and earnings per share were also below consensus. The guidance excludes the planned sale of the NOR Flash and F-RAM memory business to Winbond, which Infineon expects to close in the second half of calendar 2027 and which could add up to EUR 1bn to free cash flow.
Shareholders are set to receive a dividend of EUR 0.38 per share, up EUR 0.03, subject to approval at the annual general meeting on 25 February 2027. Infineon puts the total payout at about EUR 494m.
What it means for European founders and investors
The figures show how far the AI build-out now reaches beyond the makers of AI processors. Power conversion inside data centres has become a business that Infineon expects to be worth close to EUR 4bn in a single year, which signals strong demand for every layer of the power chain, from chips to converters, cooling and grid connections.
For European hardware startups, that is a large and growing market with a European anchor customer and partner base. Companies such as Vensum Power, which recently raised money for power conversion in AI data centres, operate in exactly this space. The investment plan in Dresden and Villach also matters for Europe's chip supply chain, alongside projects such as the ESMC factory in Dresden in which Infineon holds a stake, as covered in our report on NXP's third quarter.
The weaker cash guidance is the counterpoint. Capacity for silicon carbide and gallium nitride is expensive, and even the largest European player has to fund it over several years. For investors, the question is whether data centre demand stays strong enough to fill the new capacity, and how quickly the heavy spending turns into cash.
Spotted an error? Email contact@europreneursmedia.com and we'll correct it. See our corrections policy and editorial standards.
