(Bloomberg) --

Results at German semiconductor manufacturer Infineon Technologies AG were boosted by strong demand, but it warned of continued bottlenecks in a manufacturing supply chain that’s running at “full speed.”

Infineon is a major supplier to automakers, who have been struggling to obtain chips after cutting back orders due to the pandemic. Now, with demand for both consumer-electronics companies and cars roaring back, companies like Infineon are ramping up supply.

“The semiconductor market is booming,” said Reinhard Ploss, chief executive officer of Infineon. However, he added that there are “bottlenecks in those segments where we depend on chips supplied by foundries, especially in the case of automotive microcontrollers and IoT products.”

Infineon’s shares fell 1.7% in early trading.

“On balance, we believe there could be some profit taking on market open, given limited scope for near-term upgrades,” analysts at Citigroup Inc. said in a note to clients.

Earnings Insights

  • Sales in the first quarter of 2021 hit 2.7 billion euros ($3.25 billion), compared to the average analyst estimate of 2.69 billion euros. Infineon previously guided second-quarter revenues between 2.5 billion euros to 2.8 billion euros.
  • Third-quarter revenue is expected to be between 2.6 billion euros and 2.9 billion euros, the company said.
  • The company predicted 2021 full-year revenue guidance remained at around 11 billion euros.
  • Infineon said its second-quarter revenues were particularly strong in its automotive segment.

“Electronics that help accelerate the energy transition and make work and home life easier remain in high demand,” said Ploss. “The push for digitalization continues unabated.”

Last week rival STMicroelectronics NV reported strong demand for automotive and power products in the first quarter.

STMicro’s Chief Executive Officer Jean-Marc Chery said automotive demand “rebounded from Q4 2020 much faster than anticipated and it has caused supply chain constraints across the entire semiconductor industry.”

On Monday, Intel’s CEO said the global semiconductor shortage roiling a wide range of industries likely won’t be resolved for a few more years.

Swiss semiconductor firm AMS AG also reported on Tuesday, missing estimates and warning of tight supply chain conditions in certain segments of the semiconductor industry.

Read More

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  • Europe Is Trying to Reclaim Its Lost Chipmaking Glory
  • The World Is Short of Computer Chips. Here’s Why: QuickTake

(Updates with additional context, shares.)

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