Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM Team, Thank you as always for giving us direction in the market. I just want to ask what your opinion is on Infineon Technologies (IFX.XE). It is a German based semiconductor manufacturer. I am a bit concerned about their long-term growth prospects if their market share in China potentially decreases as China endeavors to achieve self-sufficiency in this kind of technology. Thank you. Kind regards, Sue.
Thanks Sue,
We have to look at this question from a macro perspective because we don’t follow German listed Infineon. According to Bloomberg in 2023 they received ~32% of their revenue from China which is a very meaningful portion of their earnings and we understand your concerns.
This EUR40bn semiconductor business is trading on 16.9x pretty much inline with say Qualcomm (QCOM US) on 16.7x which generated over 60% of its revenue from Hong Kong & China in 2023. We feel China will in time squeeze both of these companies but if anything Infineon looks the “safer” bet”.
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