Infineon raises outlook as AI data center demand surges
Infineon lifted its outlook as AI data-center power demand surged, with that business set to generate €1.5 billion this year and €2.5 billion next year.
Infineon Technologies raised its full-year outlook after stronger demand for power-supply systems used in AI data centers and better automotive order intake pushed second-quarter revenue to €3.81 billion, up 6% from a year earlier. The German chipmaker said its fiscal 2026 margin target now stands around 20%, up from a previous high-teens forecast, and it expects revenue to rise significantly year over year rather than only moderately.
The update underscores how the AI boom is spreading beyond processors and cloud software into the less visible hardware that keeps data centers running. Power-management chips and related systems are becoming a key indicator of AI infrastructure spending because every new server rack needs efficient conversion and control of electricity, not just more compute. Chief executive Jochen Hanebeck said the AI boom is strengthening further and that the company’s power-supply solutions for AI data centers are in very high demand.
Infineon said AI data center applications are expected to generate about €1.5 billion in revenue in fiscal 2026 and about €2.5 billion in fiscal 2027. The company also said it is ramping gallium nitride production for AI data center applications, with design-ins expanding across multiple power-conversion stages, including intermediate bus converters. In a presentation to analysts, Infineon said AI power content per kilowatt is in the range of $100 to $250, a sign of how much specialized semiconductor hardware is embedded in each increment of data-center capacity.
The company said the second half of fiscal 2026 should grow more strongly than previously expected and described a broader upcycle across many end markets as now in sight. It is also bringing forward manufacturing investments to meet rising demand, a notable move for a business that generated about €14.7 billion in revenue in fiscal 2025 and employed roughly 57,000 people worldwide. That scale makes the new AI-related revenue targets meaningful, but still part of a diversified portfolio that includes automotive, power systems and edge systems.
Infineon has framed AI as a growth engine that initially runs through power-supply solutions for data centers, with grid infrastructure expected to become an added driver in coming years. That matters for investors because it suggests the AI buildout is not just a story about flagship chip designers. It is also a story about the infrastructure layer beneath them, where power efficiency, conversion and delivery may prove just as important as raw computing performance.
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