At the end of the year, looking back at the past 2024, the semiconductor industry has both growth and pain. Looking back at the status of the semiconductor industry in 2024, what are the great progress and what are the shortcomings? Looking forward to 2025, what opportunities will the semiconductor market have and how to develop? For this reason, Electronics Enthusiasts interviewed the head of Infineon Technologies. The following is his analysis and outlook on the semiconductor market in 2025.
In the 2024 fiscal year, Infineon's revenue was 14.955 billion euros, profit was 3.105 billion euros, and profit margin was 20.8%. Infineon Technologies said: "In the 2024 fiscal year, Infineon performed well and its performance was in line with expectations. Looking back over the past few years, the electronics industry has not only carried the opportunities brought by the low-carbon digital transformation, but also faced challenges brought by market fluctuations and uncertainties. In the context of the ever-changing market, only forward-looking layout can calmly cope with it. The rapid development of large model technology has led the wave of generative AI, and the demand for computing power has surged. At the same time, the global low-carbon trend brought about by climate change has had a profound impact on the industry, and markets such as electric vehicles and new energy have also experienced rapid growth. This trend has also put forward higher requirements for the semiconductor industry, driving its continuous innovation and improvement."
Focusing on AIoT and automotive semiconductors, Infineon adds value to customers through continuous innovation
Facing increasingly fierce competition, each company has different positioning and strategies, some emphasize cost-effectiveness, some emphasize differentiation, and Infineon has been committed to adding value to customers through technological innovation.
In October 2024, Infineon launched the world's thinnest silicon power wafer. Infineon is the first company to master the handling and processing technology of 20μm ultra-thin power semiconductor wafers, which is only one-quarter the thickness of a hair and half the thickness of the current most advanced 40-60μm wafers. This innovation will help significantly improve the energy efficiency, power density and reliability of power conversion solutions for AI data centers, as well as consumer, motor control and computing applications.
Compared with solutions based on traditional silicon wafers, halving the wafer thickness can reduce substrate resistance by 50%, thereby reducing power losses in power systems by more than 15%. As the energy demand of AI data centers has increased significantly, especially the rapid growth of high-end AI server applications, the demand for energy has also increased, so the efficiency of energy utilization has become increasingly important.
In fiscal 2024, Infineon maintained strong growth in the field of silicon carbide, with revenue of 650 million euros, a year-on-year increase of more than 30%. In addition, Infineon has achieved a major design win with a large US OEM manufacturer. In terms of the proportion of silicon carbide revenue, in fiscal 2024, the revenue share of the automotive and industrial application markets will be nearly 5:5. Infineon's silicon carbide business is expected to continue to grow at a low double-digit percentage (10%~30%) in fiscal 2025.
In addition, Infineon continues to develop new edge AI solutions, such as DEEPCRAFT™, a new brand for edge AI and machine learning software solutions recently released by Infineon. In addition, Infineon has launched five mature edge AI models. These new models support gesture and surface detection through radar sensors, human fall detection using accelerometers, and extend audio detection services to application scenarios for industrial customers. The software, paired with Infineon's hardware products, will provide customers with a range of suitable new edge AI and machine learning models and solutions.
Outlook for 2025
"In 2025, AI is expected to continue to be one of the strongest growth drivers in the semiconductor market, especially in server and data center applications. With the explosive growth of global data volumes and the widespread application of AI technology in various industries, the demand for efficient and high-performance computing capabilities continues to rise, which directly drives the demand for advanced semiconductor solutions for AI servers and data centers." Infineon Technologies told Electronic Enthusiasts.
Looking ahead to 2025, Infineon expects its AI business to continue to grow. The company expects that its AI business revenue is expected to exceed 500 million euros in 2025. And it is expected to exceed the 1 billion euro mark in the next two years.
Infineon Technologies believes that this achievement will be mainly due to the company's outstanding performance in the field of power supply for AI solutions. Its structural growth is driven by multiple factors: including the rapid growth in the number of new AI server installations, the performance improvement of the new generation of processors and the corresponding increase in power consumption, the increase in bill of materials (BOM) costs as the industry shifts from horizontal to higher power density vertical power supply, and the market share that Infineon continues to win with its excellent technical capabilities and market competitiveness. It is reported that Infineon's silicon (Silicon), silicon carbide (Silicon Carbide, SiC) and gallium nitride (Gallium Nitride, GaN) technologies all play an important role in AI server and data center power systems.
As a market leader in automotive semiconductors, Infineon has always focused on deepening the Chinese market and continued to invest in low-carbonization and digitalization. Infineon Technologies has pointed out that the Chinese market is one of Infineon's most important and dynamic regional markets, and its revenue in the Greater China market accounts for about one-third of Infineon's global total revenue. In 2024, China's annual production of new energy vehicles will exceed 10 million, injecting strong growth momentum into the automotive electronics market.
Infineon Technologies believes that China's new energy vehicle market will maintain strong growth in 2025, which will provide Infineon with a broad market space and development opportunities for business expansion in China.
Infineon's automotive electronics division accounted for 56% of global total revenue in fiscal 2024, with a 2% increase in annual revenue, making it the only division to achieve growth. Among them, the electric vehicle (xEV) and autonomous driving (ADAS) fields are particularly eye-catching, thanks to Infineon's technical advantages in microcontrollers (MCUs) and smart power solutions.
Infineon will continue to make efforts in new electronic and electrical architectures, smart cockpits, and autonomous driving, and continue to deepen cooperation with customers including vehicle manufacturers and parts suppliers to provide complete system solutions for the automotive market, jointly promote industry development, and create a more convenient, safe, and green future.
Infineon is optimistic about the application of third-generation semiconductors in many fields. According to Yole's statistics, the market size of silicon carbide demand will soar from 3.1 billion euros in 2024 to 9 billion euros in 2029, with a compound annual growth rate of 24%. In the application fields of energy storage, transportation, solid-state circuit breakers, etc., silicon carbide has performed particularly strongly. From 2024 to 2029, the compound annual growth rate of silicon carbide in wind energy applications will reach 95%, and the compound annual growth rate of silicon carbide in solid-state circuit breakers will also reach 76%, showing huge market potential and development prospects.
Infineon Technologies said that China is transforming from a "world factory" to a "smart manufacturing power", and its innovation ability in the field of science and technology has achieved a qualitative leap. Relying on the continuous spirit of innovation, Infineon actively cultivates local engineers, integrates new products and cutting-edge technologies, and is committed to providing system solutions for various terminal products and smart devices. At present, Infineon has established a number of local technology support application platforms such as system capability centers, intelligent application capability centers, and innovative application centers. By launching numerous system-level solutions with partners, it supports emerging industries such as new energy vehicles, renewable energy, and robots. In addition, based on Infineon's strong global supply chain system, Infineon has also continuously improved its local supply network and has established long-term cooperative relationships with many local companies, such as two silicon carbide suppliers Tianyue Advanced and Tianke Heda, to enhance the resilience and competitiveness of the supply chain, thereby better providing customers and partners with convenient and stable services.