* Q3 core profit at 170 mln eur, in line with expectations
* Says early investments in extra capacity paying off
* Shares down 4.7 pct, traders cite lack of 2015 view
* Shares have easily outpaced tech sector this year
(Refiles to remove garble from headline)
By Harro Ten Wolde
FRANKFURT, July 30 German chipmaker Infineon
slightly raised its full year outlook on Wednesday
after carmakers and industrial customers increased orders, but
ambitious investors took profits on its high-performance shares.
Infineon said it expects revenue growth and its core
operating margin for the financial year through September to be
slightly ahead of its original target ranges of between 7 and 11
percent and 11 to 14 percent, respectively.
But it stopped short of giving a detailed outlook for the
next fiscal year and its shares - which have risen 15 percent so
far in 2014 in a sector that is down 1 percent - fell almost 5
The Neubiberg, southern-Germany based company is riding the
recovery wave in the European car industry. German premium
carmakers especially are increasing spending to make their cars
safer. At the same time, Infineon's industrial clients are
investing to make production cheaper and more energy efficient.
Infineon's chips are used to activate airbags, enable cruise
control and cut vehicle emissions. Its chips are also used in
security and smart cards.
In the fiscal third quarter through June, Infineon's
operating profit excluding some special items rose to 170
million euros ($227.9 million), up 45 percent from the previous
year and in line with the average forecast of 171 million euros
in a Reuters poll.
The company said its order books were filling up and it
could fully benefit as it had made timely investments in extra
production capacity, anticipating growth ahead.
Infineon said that demand for its chips used in cars was
particularly strong in North America and China, while its
industrial chips were mainly boosted by demand for use in
But investors fear that Infineon may have reached the top of
its cycle. Infineon shares were 4.7 percent lower by 0830 GMT at
the bottom of the STOXX Europe 600 Technology index.
"The magnitude of the beat and raise was not very big, so
investors are probably guessing that Infineon is reaching the
top of its demand cycle," said a London-based analyst who
declined to be named.
Global spending on semiconductors is expected to rise 6.7
percent this year to $336 billion, fuelled by smartphones and
tablets, according to market researcher Gartner.
That upbeat outlook is not shared by everyone in the
Chip equipment makers ASML and ASM International
, whose order books are seen as a barometer of the chip
industry's prospects, said earlier this month some of their
customers had postponed orders in anticipation of new technology
coming to the market.
Franco-Italian chipmaker STMicroelectronics was
also less optimistic than expected.
($1 = 0.7458 Euros)
(Reporting by Harro ten Wolde; Editing by Maria Sheahan and