Infineon (IFXGN): Goldman Sachs reiterates Buy on Infineon as AI power, pricing and capacity expansion support growth

Overview

Goldman Sachs summarizes management discussions at the 15th German Corporate Conference and maintains a positive view of Infineon. The report sees several growth supports—automotive software content, pricing, AI-power demand and new capacity—despite slower BEV momentum and cyclical risks.

Core views

Goldman Sachs argues that Infineon's exposure to software-defined vehicles (SDVs) can partly offset slower battery-electric-vehicle momentum in automotive. China vehicle production trends have decelerated year on year, although European demand has improved modestly. Management highlighted strong SDV traction and automotive MCU growth, which Goldman Sachs believes can support automotive growth into FY27. Over the longer term, Infineon expects AI-related demand to more than offset moderation in automotive growth from lower BEV penetration. The company is also seeing broad inventory replenishment in automotive and industrial markets, particularly in renewables, while consumer markets show early recovery signs. Pricing is another support. The third annual round of VPA negotiations is under way and covers roughly half of group revenue, including more than half of automotive revenue and about half of industrial revenue. Although negotiations are unfinished, Goldman Sachs considers non-power semiconductor ASP increases likely, with benefits expected from 1QCY27. Earlier AI-power price actions implemented in April began to appear in financials around June or July, while the power-pricing round completed in July is expected to benefit results from September or October. Management also indicated that data-center-related capacity reservation agreements could eventually provide high-single-digit billions of euros of revenue visibility over the next two to three years. The report sees Infineon as well positioned in AI power semiconductors because capacity availability, reliability and power density are key differentiators. Its manufacturing scale and product portfolio are viewed as advantages as demand grows. Goldman Sachs also expects next-generation vertical power products, which carry higher ASPs, to contribute to revenue growth and margins over the coming fiscal year, though the quarterly ramp trajectory remains uncertain. Higher reliability requirements and more sophisticated packaging may further support differentiation and profitability. Infineon's participation across the full AI-power conversion chain—from grid power through 400V/800V and 12V to roughly 0.6V at the processor—forms a central competitive argument. Management noted that some competitors focus mainly on the final conversion stage, estimated at only about half of the total addressable market. Goldman Sachs believes that optimizing across the entire chain is increasingly valuable as rack-level power requirements rise and tighter GPU and CPU space constraints drive demand for vertical power architectures. For longer-term growth, Goldman Sachs highlights investment in grid infrastructure and expanding demand for power semiconductors. The new Dresden module provides around €5bn of manufacturing capacity and is complemented by the expanding Kulim facility in Malaysia. Together with an automotive and industrial cyclical recovery, the report views these investments as substantial capacity headroom. Goldman Sachs reiterates Buy with a €91.00 12-month price target, based on a 15x CY27E EV/EBITDA multiple using 2HCY27 plus 1HCY28 estimates.

Analysis framework

The report combines management commentary from the conference with demand, inventory, pricing, product-positioning and capacity analysis. It assesses how automotive and AI-power demand, pricing actions and manufacturing expansion could affect growth and margins, then values Infineon using an EV/EBITDA multiple.

Methodology notes

• Valuation methodsEV/EBITDA valuation

  15x CY27E EV/EBITDA multiple based on 2HCY27 plus 1HCY28 estimates

  The target price applies an enterprise-value-to-EBITDA multiple to estimated earnings, using a forward period intended to reflect Infineon's expected operating profile.

• Competition & strategyValue chain analysis

  End-to-end AI-power conversion chain analysis

  The report evaluates Infineon's position across power conversion stages and argues that broader participation than final-stage-focused competitors expands its addressable opportunity.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Infineon (IFXGn.DE)

  Primary covered company; positioned to benefit from AI-power demand, grid investment, semiconductor pricing and automotive software content.

  Strengths

  Manufacturing scale, reliability, power density, end-to-end power capabilities, higher-ASP vertical products, and Dresden and Kulim capacity expansion.

  Weaknesses

  Automotive growth remains exposed to slower BEV momentum and uncertain quarterly product-ramp timing.

  Comparison

  Some competitors focus on the final power-conversion stage, which management estimates represents only around half of the total addressable market.

  Risks

  Weaker end markets, lower-than-expected EV adoption, a worsening semiconductor cycle and negative macro conditions affecting consumer demand.

Key data

• 12-month price target€91.00Goldman Sachs target price based on a 15x CY27E EV/EBITDA multiple.
• Share price€58.29Price as of 21 Sep 2026 close.
• Implied upside56.1%Upside shown relative to the reported share price.
• VPA revenue coverageRoughly half of group revenueIncludes more than half of automotive revenue and approximately half of industrial revenue.
• Dresden manufacturing capacityAround €5bnCapacity provided by the new Dresden module.
• Capacity-reservation visibilityHigh single-digit billions of eurosPotential revenue visibility over the next two to three years from primarily data-center-linked agreements.

Impact & implications

Goldman Sachs believes Infineon's software content, pricing actions, AI-power positioning and manufacturing capacity can support growth despite slower BEV adoption. The report particularly emphasizes that full-chain power-conversion capabilities and higher-value vertical power products may support differentiation and margins.

Risks

• Weaker end markets, including lower-than-expected EV adoption rates, could weaken the investment case.
• A worsening semiconductor cycle could pressure demand and results.
• Negative macro conditions could prolong consumer-demand weakness and push demand out.

What to watch

• Completion and pricing outcome of the third annual VPA negotiations, particularly whether non-power ASP increases begin contributing from 1QCY27.
• Timing of benefits from July power-pricing negotiations, expected from September or October onward.
• Finalization of data-center-related capacity reservation agreements and their potential revenue visibility over the next two to three years.
• The pace of vertical power-product ramp-up and the recovery in automotive, industrial, renewables and consumer markets.