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Infineon Cuts Forecast as U.S. Tariffs Loom and Dollar Weakens

The semiconductor giant reports a 41% profit decline in Q2 but continues progress on its €5 billion Dresden factory, backed by €1 billion in EU and federal subsidies.

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Overview

  • Infineon has reduced its annual revenue forecast by 10%, citing anticipated U.S. tariffs and a weaker dollar as key pressures.
  • Second-quarter profit fell 41% year-on-year to €232 million, despite robust revenue of €3.6 billion, which saw only minimal decline.
  • The automotive segment, Infineon’s largest revenue contributor, remains under pressure with softer margins and volumes compared to last year.
  • Construction of the Dresden Smart Power Fab is progressing on schedule, with the shell nearly complete and production expected to begin in 2026.
  • The project has secured €1 billion in EU and German federal funding, reinforcing Europe's semiconductor sovereignty under the EU Chips Act.