Infineon Sees Financial Hit From Texas Plant Shutdown

Matthew Broersma,
fiat, car, auto, stellantis

Infineon sees financial impact in high double-digit millions of euros from February plant closure as chip shortages hit carmakers worldwide

Infineon has said it expects a quarterly financial impact in the high double-digit million euro range from last month’s production outage in Austin, Texas last month caused by severe weather.

The German chipmaker said it was continuing to increase production and expected to reach pre-shutdown levels by June.

“The major impact on Infineon’s revenue related to this incident is expected in the third quarter of its 2021 fiscal year, in the range of a high double-digit-million euro amount,” Infineon stated.

Tight market conditions mean it will not be possible for the company to recover lost production.

Chip shortages

But Infineon said it sees no negative impact on its overall revenue expectation for the full year ended 30 September, due to strong global electronics demand.

In a state better known for heatwaves and tropical storms, February’s cold snap blanketed the region in a layer of ice, left millions without power and caused at least 21 fatalities.

Chipmakers Samsung, NXP Semiconductors and Infineon were all ordered to shut factories during the period.

The chaos further disrupted semiconductor supplies during a period of worldwide shortages caused by unusual demand during the Covid-19 pandemic.

In early March chipmakers said they had the resources they needed, such as power, water and petrol, to able to begin restarting plants.

Production rethink

But the Austin Regional Manufacturers Association said at the time the process would be slow and costly.

Auto manufacturers worldwide have had to slow production or temporarily shut down plants due to chip shortages, and Samsung, NXP and Infineon all supply chips to automakers.

The crunch has affected production of Jeep, Renault, Fiat and other car models.

US secretary of commerce Gina Raimondo said on Friday that addressing the shortage was a “priority”.

She said she would work with organisations such as the Semiconductor Industry Association and would look to boost US semiconductor manufacturing capacity.

The shortages have also caused a rethink in Europe, with the EU earlier this month setting out a plan to boost its own domestic production capability for high-end semiconductors.