Close to €4 billion for the plugs: Infineon's AI story is a power-supply story

The loudest AI results this season came from the people who design accelerators. The most instructive came on Tuesday from Neubiberg, near Munich, where Infineon makes chips that convert and control electricity. For its fiscal year to the end of September 2027, the company forecasts revenue of about €20 billion, at an assumed $1.15 per euro, and expects revenue from power supplies for data centres to reach “close to €4 billion”¹. Desk arithmetic: that is about a fifth of the whole.

The quarter behind it. In July to September, revenue was €4.706 billion, up 19% on the year and 13% on the previous quarter; the segment result, Infineon’s preferred profit measure, was €1.119 billion, a margin of 23.8% against 18.2% a year earlier¹. For the full year 2026, revenue was €16.353 billion, up 12%¹. Growth came from automotive, green industrial power and power and sensor systems; connected secure systems declined¹. The shares rose about 6% in Frankfurt by late morning on Tuesday, according to dpa-AFX².

The dull machinery. Data centres are, among other things, electricity customers, and their power has to be converted and controlled before it reaches a chip. Infineon names data centre power supplies, the “expansion and modernization of energy infrastructure”, electromobility and software-defined vehicles as the drivers, said chief executive Jochen Hanebeck¹. Those are customers with grid connections, factories and fleet orders, not only research budgets.

What the money costs. Infineon plans to invest €3.0 to 3.5 billion in fiscal 2027 and expects free cash flow of about €1.8 billion, after €993 million in 2026¹. Desk arithmetic: the planned investment is larger than this year’s entire free cash flow, by a factor of about three to three and a half. The board wants to lift the dividend by three cents to €0.38¹.

For you. If you work in German industry, this is the more useful AI headline: the boom pays the firms that supply power electronics, not just the ones with famous chips. A forecast is a promise, though, and Infineon will be judged first on its own guide of about €4.6 billion for October to December¹. Nothing here is investment advice.