Infineon Managing To Weaker Assumptions About The Chip Recovery Cycle

With Infineon (OTCQX:IFNNY) being one of the rare semiconductor companies to challenge the rally in chip stocks by pointing to a lower, slower recovery, it’s not surprising that these shares have lagged the SOX this year, not to mention peers like ON Semiconductor (ON) and STMicro (STM). Japan’s Renesas Electronics (OTCPK:RNECY) has been down in the doldrums with Infineon, but then there are some pretty serious margin (and possibly market share) issues at that large MCU player.

At this point, it’s just too soon to tell whether what’s going on at Infineon is an issue of company-specific end-market/customer mix, market share shifts, or a more aggressive approach to dealing with inventory and demand challenges. Given the relative valuations and recent performance trends, I’d probably list my preference order as STM, ON, Infineon, Renesas, but Renesas has a lot of upside if they get back on track, ON has more inventory risk, and Infineon may prove to be managing this downturn the best when it’s all said and done.

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Infineon Managing To Weaker Assumptions About The Chip Recovery Cycle