Infineon aims to maintain China growth in 2017

An employee performs a quality control check on an Infineon Technologies AG semiconductor wafer in a sterile room at the company's factory in Regensburg, Germany. BLOOMBERG

German semiconductor company Infineon Technologies AG said it aims to maintain double-digit growth in China this year, as it benefits in part, from the overseas expansion efforts of China Railway Rolling Stock Corp Ltd, the country's railway vehicle and equipment maker.

Infineon, the producer of key semiconductors that help transform high-voltage electricity into power to drive CRRC's high-speed railways, posted a revenue of 1.6 billion euros ($1.69 billion) in the Chinese mainland in its 2016 fiscal year which ended in October, said Su Hua, president of Infineon in China.

Su said his company's revenue in China managed a year-on-year growth rate of 15 percent last year.

"I believe the growth momentum will continue in 2017," he said.

"CRRC has grabbed several big orders from foreign countries, which will help boost our revenue."

CRRC said in December it aimed to generate 35 percent of its sales from overseas markets by 2025, up from 7 percent in 2015.

According to Su the German company will also benefit from China's burgeoning new-energy vehicles market, energy sector and the Made in China 2025 initiative, which was designed to promote high-end manufacturing.

Infineon is the world's second biggest semiconductor supplier to the car sector, with a market share of 10.4 percent, behind the Netherlands-based NXP Semiconductors which accounts for 14.2 percent, data from Strategy Analytics show.

Globally, Infineon's automotive unit contributed to more than 40 percent of its total sales. Its global revenue hit 1.65 billion euros and operating profit was 246 million euros for the quarter ending December.

Zhang Zhiyong, founder and CEO of Wenfeng Automobile Consultancy, said as vehicles became increasingly smart and digital, they would become just like smartphones with four wheels.

"That trend will spur a huge demand for auto chips. But Infineon will face stronger competition in the high-speed railway sectors," he added.