Infineon accelerates AI Investments, expects revenue to rise moderately in fiscal year 2026

Infineon Technologies AG reported results for the first quarter of fiscal year 2026, which ended on 31 December 2025.

In the first quarter of fiscal year 2026, due to seasonality Group revenue decreased to €3,662 million, from €3,943 million in the previous quarter. The 7 percent decline in revenue affected all four segments and was moderate in Automotive (ATV) and Power & Sensor Systems (PSS), and significant in Green Industrial Power (GIP) as well as Connected Secure Systems (CSS).

Gross margin rose in the first quarter of the current fiscal year significantly to 39.9 percent, from 38.1 percent in the previous quarter. The adjusted gross margin was 43.0 percent, compared with 40.7 percent in the fourth quarter of fiscal year 2025.

The financial result was minus €56 million in the first quarter of the current fiscal year, compared with minus €64 million in the fourth quarter of fiscal year 2025.

“Infineon has made a successful start to fiscal year 2026,” said Jochen Hanebeck, CEO of Infineon. “The very dynamic demand for AI, against an otherwise subdued market backdrop, is providing strong tailwinds to Infineon. At present, the focus is on power supply solutions for AI data centers; in the coming years, the expansion of grid infrastructure will be added. To serve our customers in the best possible way, we are aligning our manufacturing capacity to meet further rising demand and are bringing forward our investments in this area. A significant portion will go toward accelerating the ramp-up of our new Smart Power Fab in Dresden, which we will open this summer – at exactly the right time.”

Investments – which Infineon defines as the sum of investments in property, plant and equipment, investments in other intangible assets and capitalized development costs – amounted to €582 million in the first quarter of the current fiscal year, compared with €451 million in the previous quarter. Depreciation and amortization stood at €478 million in the first quarter of fiscal year 2026, compared with €484 million in the fourth quarter.

Based on an assumed exchange rate of US$1.15 to the euro, Infineon expects revenues in the 2026 fiscal year to grow moderately compared with the 2025 fiscal year. Currency effects will have an adverse impact on revenue growth. The growth rate of the ATV segment is expected to be lower than the Group average. Subdued demand in the e-mobility segment is being offset by strong momentum for software-defined vehicles. In contrast, revenue in the PSS segment is expected to grow at a much faster rate than the Group average, driven by very dynamic demand for products for power supply of AI data centers. Compared with the prior year, revenue in the GIP segment is expected to increase slightly and revenue in the CSS segment should stay flat. The adjusted gross margin should be in the low-forties percentage range and the Segment Result Margin in the high-teens percentage range.