(Bloomberg) -- Infineon Technologies AG said manufacturing constraints at its sites in Malaysia and Texas are holding back its ability to grow revenue, despite a global shortage in semiconductors.

Revenue rose 25% to 2.72 billion euros ($3.2 billion) in the third quarter from a year earlier, the company said in a statement on Tuesday. That compared with the average 2.78 billion-euro estimate of analysts surveyed by Bloomberg.

Automotive and power and sensor systems were primarily affected and the company was only able to increase its sales by 1% from the previous quarter even with heavy demand, Infineon said. Malaysian production capacity was held back by Covid-19-related measures and the company is still dealing with the aftermath of the winter storm in Texas.

“Inventories are at a historic low; our chips are being shipped from our fabs straight into the end applications,” Chief Executive Officer Reinhard Ploss said in the statement. “Under these circumstances, any pandemic-related restrictions on manufacturing, such as those recently imposed in Malaysia, are especially grave.”

Key Insights

  • The company said full-year sales are expected to hit 11 billion euros, matching the average analyst forecast.
  • Manufacturing bottlenecks in Malaysia are likely to continue to weigh on sales in fourth quarter, the company said.
  • Net income in the fiscal third quarter, which ended in June, hit 245 million euros.
  • The company is a major supplier to automakers, which have been hard hit by a global chip shortage caused by a combination of diminished manufacturing capabilities during the Covid-19 pandemic and underestimated demand.
  • The shortage has led to sales growth across the industry, as electronics makers bought up as many chips as semiconductor companies could produce.
  • Infineon’s Chief Marketing Officer Helmut Gassel said in May that the shortage would prevent about 2.5 million cars from being built in the first two quarters.
  • In response, Infineon and others are working to increase manufacturing capabilities. The world’s top chipmaker, Taiwan Semiconductor Manufacturing Co., is spending $100 billion over three years to meet surging demand.
  • This reaction has stoked some concerns that the industry will overshoot demand. Last month, Texas Instruments Inc. warned that revenue could fall short of some analysts’ estimates.

Market Reaction

  • Infineon shares rose 4% to close at 33.41 euros in Frankfurt on Monday.
  • The stock has gained 6.4% so far this year. That compares with a 27.4% gain in the Stoxx Europe 600 Technology Index.
  • Investors will watch reactions of chip stocks tied to the auto industry after the Chinese government said it’s probing some semiconductor sellers over allegations of pricing manipulation.

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(Updates with additional details on third quarter, outlook from second paragraph.)

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