While carmakers and automotive semiconductor companies hold different views on the outlook for the global car market, industry leader Infineon is optimistic about the future. According to DIGITIMES Research, the growing demand for automotive semiconductors, robust order backlogs and the edge in China's EV sector will further Infineon's revenue growth.

In the fourth quarter of the 2023 fiscal year, which ended on September 30, 2023, Infineon's automotive segment reached EUR2.16 billion (US$2.37 billion) in revenue, up 12% year-over-year. The strong market demand and the increasing MCU market share helped the sales.

For the full 2023 fiscal year, Infineon reported EUR8.24 billion in automotive revenue, a 26.5% growth from the 2022 fiscal year. The number accounted for 50.5% of the company's total revenue, compared to a proportion of 45.8% in the previous year.

Although car industry players have diverse perspectives on market outlook, Infineon has said the revenue growth in the automotive business is expected to be in the low double-digit percentage range in the 2024 fiscal year. Its operating profit rate is estimated to stay between 25% and 28%, similar to the 2022 and 2023 fiscal years.

Several factors contributed to Infineon's promising financial forecast. According to research firm LMC Automotive, the global car market will slow down in 2024 with a growth rate of 1% to 2%. However, Infineon expects the value of semiconductors in a car will continue to rise significantly as the applications in EVs, advanced driver assistance systems (ADAS), self-driving technology, and automotive electrical/electronic architecture grow. Infineon's automotive semiconductors currently support over 300 product series.

Global EV market to reach 20 million cars in FY24

According to the Germany-based semiconductor manufacturer, it had order backlogs of EUR29 billion as of September 2023, with automotive segment taking up the most. Power modules and MCUs generated the majority of the orders.

While some Western carmakers have scaled down their short-term EV investments, China continues to see the demand increase. Infineon estimated that the global battery EV market will reach 15 million cars in 2024. DIGITIMES Research said the estimation will achieve 20 million vehicles when adding plug-in hybrid EVs.

China has been the most important automotive market in the world and takes up about a quarter of Infineon's automotive revenue. Infineon partners with many China-based companies and supports more than 10 EV platforms. The semiconductor value of each car it enables remains between US$500 and US$1,300, showing that the company covers both mid and high-end vehicle models.

Chinese automakers have turned to local semiconductor manufacturers for supplies, intensifying competition in the country's semiconductor industry. However, these carmakers will keep working with Infineon as they expand overseas, benefiting the semiconductor company's EV business.

Adopting silicon carbide (SiC) devices in EVs helped Infineon reach EUR500 million in SiC revenue in the 2023 fiscal year, up 65% year-over-year. Automotive products contributed to 40% of the revenue. With the company's growing production capacity, Infineon estimated that its SiC revenue will increase by 50% in the 2024 fiscal year, with automotive applications rising to 50%.