IFX Day 2018 Dr. Reinhard Ploss Chief Executive Officer
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IFX Day 2018 Dr. Reinhard Ploss Chief Executive Officer London, 12 June 2018 We are a world leader in semiconductor solutions Our vision We are the link between the real and the digital world. Our values Our mission We commit We make life We partner easier, safer We innovate and greener. We perform Part of your life. Part of tomorrow. Global megatrends underline the increasing importance of microelectronics… Demographic & social change Climate change & resource scarcity Urbanization Digital transformation 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 3 …triggering superior growth in the markets successfully addressed by Infineon Competencies Energy efficiency Mobility from Products & to Systems Security Systems IoT & big data Technologies, Products, Software Success is based on differentiating strategies and competencies 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 4 Power is our main business; sensors and embedded control are other important pillars Q2 FY18 revenue split by segment Power represents ~2/3 of revenue Industrial Power [% of revenue] Automotive Control (IPC) 17% Power (ATV) ~17% 30% Power Manage- ment & Multi- ~15% Sensors & RF 44% ~68% market (PMM) Embedded 9% Chip Card & Control revenue in Q2 FY18: revenue in Q2 FY18: €1,836 incl. OOS and C&E of €1m Security (CCS) €1,836 incl. OOS and C&E of €1m Automotive Power Management RF & Sensors Security #1 system and One of the leading #1 in security ICs and System leader in technology player in companies in RF and leader in security automotive power #2 in sensors solutions 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 5 Outgrowing the power market leads to superior performance on group level Success story of continuous market share gains in power CAGR(03-16): 4.2% CAGR(03-16): 11.0% ] 18.5% 20% bn 18.0% 13.3% 11.9% hare 12.3% s 11.2% 11.8% 10.2%10.7% 9.4% 9.7% 8.1% 8.4% 8.5% 10% market Revenue [USD Revenue 2,950 2,718 2,155 2,095 1,891 1,770 1,769 1,424 1,320 1,179 1,064 1,053 0,939 0,758 16,239 15,910 11,183 11,319 12,388 13,613 13,963 11,015 15,802 17,603 14,992 15,373 15,120 0 9,358 0% 2003 2005 2007 2009 2011 2013 2015 Infineon power revenue total power semiconductor market market share Source: Based on or includes content supplied by IHS Markit, Technology Group, several reports from 2004 through 2015 and 2017 Note: No backward revision of market shares and market sizes; except for year 2015 Strength in power was the major pillar of an impressive performance on group level: Infineon revenue CAGR(99-17) was ~9% organically and ~10% including M&A. 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 6 After temporary growth acceleration, target revenue growth assumed to revert to 9% Revenue growth projection at constant currencies accelerated growth 9% trendline growth 9.5% 9.1% 4.9% … Stronger growth based on established leading positions within fast growing segments FY15 FY16 FY17 FY18e FY19e ≥ FY20 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 7 Infineon is well positioned in areas providing significant structural growth even long-term Duration short medium long Relevance high Infineon electro-mobility automated driving high high Division battery-powered applications data center – power supply / power management medium Infineon renewable energy, energy storage, distribution high Division home appliances medium collaborative robots embedded security powering 5G medium Division low contactless payment government ID Other applications in our target markets are expected to show standard growth patterns. 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 8 Infineon is able to cover the entire market but is focusing on areas of higher profitability Cost optimized Performance optimized Cost-performance Explore and develop Commoditization competitive in new technologies volume markets new business high volume high differentiation Infineon is able to address all these areas in its core markets based on differentiating competencies in ... Product/Technology power, sensors, microcontroller and security Application power control, power supply, drives System electro-mobility, automated driving, drives, security Go-to-Market focus on growth applications, win with winners, go wider Manufacturing 300 mm thin wafer production 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 9 Our strategy systematically covers growth in scale and in scope Business areas Core Adjacent New area Application ompetencies c Product/ Technology Differentiating grow in scope grow in scale 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 10 New technologies strengthen our core, while current technologies find new applications Business areas Core Adjacent New area xEV Class D audio ADAS / AD HMI Application BPA Drives IoT Power supply ompetencies c CoolMOS™ OptiMOS™ Radar Digital control ToF Product/ IGBT (RF) (XDP™, iMotion™) Lidar Technology SiC µC Differentiating GaN Security continue to enhancement of growth path grow in core 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 11 System understanding requires right mindset, complemented by differentiating capabilities Customer system Full system Algorithms functionality Partial system Firmware functionality Software Integration of analog Building block and digital functionality Single function Discrete components Hardware Base technology Examples 300 mm thin- XENSIV™ Si OPTIGA™ wafer CoolMOS™ microphone Trust X AURIX™ 3G 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 12 Infineon is bringing innovation to the market – yesterday, today and tomorrow Routine innovation Breakthrough innovation Broaden and maintain portfolio Prepare to address the new demands CoolSiC™ Trench IGBT MOSFET next generation ~1998 Gesture Sensing (Soli) Safe & secure MultiCore MCU CoolMOSTM AURIX™ next generation ~2001 3D imaging Voice HMI REAL3TM ToF (XMOS) XENSIV™ Si microphone ~2008 next generation Lidar ~2008 Post-quantum cryptography Leverages existing technical competences New technical competences 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 13 Strong #1 position in power allows driving of key areas of differentiation and innovation Unique 300 mm thin wafer power Compound semiconductors semiconductor manufacturing SiC and GaN Digitalization of the power control loop Functional integration in IGBT 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 14 CoolSiC™: Great potential but a long way to go to large-scale success CoolSiC™ First commercial Launch of world's first Launch of world's SiC diode SiC trench MOSFET first trench-based Release of first hybrid SiC SiC modules power modules Start of 150 mm Manufacturing SiC manufacturing converted to 150 mm …… …… 2001 2006 2015 2016 2017 Why SiC will enter the market quickly Why SiC will take longer System performance, e.g. Significant technical challenges ›PV: smaller, lower losses, cheaper › Defect density of substrates ›UPS: smaller, lower losses › Reliability of devices › Redesign of application ›xEV drivetrain: more mileage, less cooling effort Significant cost challenges Challenge Advantage ›xEV charging: smaller, lower losses › Cost and capacity of substrates › Production investment and cost As a long-term player in SiC Infineon is set to become a leader based on substantial competencies in power technologies and applications 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 15 Challenge in the SiC MOSFET world: Trade-off between performance and robustness Performance Robustness and ease-of-use The Advantage The Challenge adjustable switching speed enabled ruggedness in critical modes lowest sufficiently high threshold voltage RDSon x A oxide lifetime (for industrial standards) cosmic ray (if required by application) short-circuit-withstand capability › SiC trench concept offers significantly better shrink potential compared to planar SiC MOSFETs. › Mastering the challenging manufacturing process is key. › Further details will be provided during the ATV and IPC sessions. 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 16 Key take-aways Infineon is well set-up to continue to outgrow the market based on strong differentiation and structural growth drivers. We enhance our core competencies and add new ones to enable future growth. Going forward, after accelerated growth of 10%+ at least in 2019, we increase our through-cycle revenue growth target from 8 to 9% per year. 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 17 Glossary AD autonomous driving ADAS advanced driver assistance system BPA battery-powered application C&E corporate and eliminations GaN gallium nitride HMI human machine interaction IC integrated circuit ID identification IGBT insulated gate bipolar transistor IoT Internet of things lidar light detection and ranging µC microcontroller MCU microcontroller unit MOSFET metal oxid semiconductor field effect transistor OOS other operating segments RF radio frequency Si silicon SiC silicon carbide Soli Google project ToF time-of-flight xEV all degrees of vehicle electrification (EV, MHEV, FHEV, PHEV) 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 19 Dr. Reinhard Ploss Chief Executive Officer › since 2012: CEO, responsible for Divisions, Group Strategy, Communications & Government Relations,