German chipmaker Infineon Technologies IFXGn.DE is relatively well insulated from geopolitical tensions between the United States and China thanks to its focus on power-management chips, CEO Reinhard Ploss said on Wednesday.
Outgoing U.S. President Donald Trump’s administration has imposed trade curbs on Chinese telecoms equipment and smartphone maker Huawei [HWT.UL], seeking to hobble its ability to equip next-generation 5G mobile networks.
Although Infineon is a Huawei supplier, its main power-management products tie it more to China’s broad industrial development than to 5G, Ploss told the Morgan Stanley European Technology, Media and Telecoms conference.
“We think we can still compete quite nicely,” Ploss told the online event, adding that Infineon’s development roadmap for the coming years was “very healthy”. [nL8N2HV0ZR]
Infineon makes more than two-fifths of revenue in the auto industry, where a recovery in China contrasts with a wider global industry slump. It strengthened its autos presence with the $10 billion takeover of Cypress Technologies last year.
Infineon did face growing competition from China-based power-management chipmakers, Ploss said. While it was confident of its position in the profitable premium segment, Infineon did need to defend its position in commoditised parts of the market.
“We need to compete here because you don’t want to let these markets go,” said Ploss, warning the alternative would be to “get eaten up by the competition Pacman”.