* World's first maker of power chips on 300 mm thin wafers
* Larger wafers increase margins
* No significant sales seen this fiscal year
VILLACH, Austria, Feb 19 Germany's Infineon
will become the world's first chipmaker to produce
more profitable chips on large, 300 mm (12 inch), thin wafers,
This means higher margins as two-and-a-half times as many
chips can be made from a single wafer as from the 200 mm wafers
used for power chips now, while the near paper-thinness reduces
the amount of the raw material silicon that is needed.
Chief Executive Reinhard Ploss told journalists on Tuesday
the company was ready to ramp up production in Villach, Austria
and Dresden, Germany as soon as there was sufficient demand for
the energy efficient chips, which are used in industries
including energy supply and carmaking.
Power chips provide more computing power while using less
Infineon shares rose 2 percent to 6.38 euros by 1027 GMT,
and were among the top gainers in the European technology index
, which rose 0.6 percent.
"It's a milestone in the history of the company. I hadn't
expected them to reach it so quickly," said analyst Guenther
Hollfelder of Baader Bank. "It gives them a chance in the medium
term to get back to their peak margins of about 20 percent."
Infineon is targeting a core operating profit margin of
between 5 and 9 percent this fiscal year to end-September, down
from 13.5 percent the previous year.
Hollfelder said the endorsement gave Infineon a significant
advantage over its main rivals in power chips, Fairchild
and International Rectifier of the United States, while
also protecting it from emerging competitors in Asia.
SHOWING THE POSSIBLE
Ploss said no significant revenue should be expected from
power chips produced from 300 mm wafers this fiscal year, which
runs to end-September, while a net return on investment would
take "a couple of years" to be seen on the bottom line.
"We are not thinking about the cyclicality of the market,"
Ploss said. "We want to show the market what is possible."
The global chip market has suffered post-financial crisis as
consumer and industrial demand collapsed across all sectors.
Infineon said last month it believed the bottom of the
market had been passed, and that its biggest carmaker customers
were beginning to replenish run-down inventories - although
other chipmakers are less optimistic.
Ploss said Infineon had won support for its 300 mm wafer
power chips from several key distributors, who supply chips to
numerous companies of all sizes.
More than half of the sales of Infineon's power management
and multi-market unit, its most profitable division, go through
Infineon has invested about 255 million euros ($340 million)
in the new power-chip technology at its plants in Villach and
Dresden - where it plans volume production.
Like many other chipmakers, it has reduced its capital
expenditure plans to maximise profits, and plans to invest about
400 million euros this fiscal year.