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EETE JUN 2014

Executive interview Security and industry 4.0: key assets for European growth By Julien Happich Shortly after the publication of Infineon’s strong Q2 FY14 sales figures with a year-on-year average growth of 14%, CEO Dr Reinhard Ploss accepted to share his insight on what could be the key industry trends to nurture for Europe to grow its chip manufacture. EETimes Europe: Infineon is the undisputed market leader in power semiconductors, devices that find their way in transport, automotive, industrial equipment and energy infrastructures. You list both Alstom and Siemens as important customers due to their activities in power generation and rail transport infrastructures. So what impact could have the acquisition of Alstom’s Energy activities by General Electric and would Infineon rejoice if Siemens came at the top of the negotiations? Dr Reinhard Ploss: We are a major supplier to all players in these fields, and actually we supply more to Siemens than to Alstom. So we can cope with either scenario, it would not make a big difference to the whole picture for us. Of course, from a European perspective, I understand that France would want to favour Siemens, focusing on maintaining industrial strength in Europe. EETimes Europe: French’s Economy and Industry Minister Arnaud Montebourg has just signed “I think it is always dangerous to bring in politics into business decisions as it tends to distort the market“ a decree that allows government to block foreign investment at will in key areas including energy, equipment, plants and transportation that are critical for national security and health. Do you think there should be a European strategy to handle such large-scale and fairly strategic business acquisitions that have vast repercussions on European jobs? Dr Ploss: I think it is always dangerous to bring in politics into business decisions as it tends to distort the market. If you are too protective and you shield your businesses from competition, then when competition eventually comes, your business dies quicker. I think that Europe could certainly do more for its industry, not by protecting selected businesses, but with directed public procurement strategies within the European market to grow and strengthen its key industries. Energy is a key challenge for Europe and the EU should strengthen its foothold with new production capabilities. That’s why I like Neelie Kroes’ “Airbus of chips” initiative. Whether Europe could reach 20% of global chip manufacture by 2020 is debatable, but far beyond chip production, she has the vision of strengthening the microelectronics industry as a key enabler for many other industries. If you don’t support key enabling technologies, how do you support all the other activities that rely heavily on electronics? EETimes Europe: In this buyout frenzy, could Infineon become a takeover target? Dr Ploss: It would certainly be gratifying to be a takeover target, Infineon is a very technical company with a very strong market position. But look at the trend of our share price, we have proven to be consistently getting stronger and stronger, we are growth oriented. Now who would reap the benefit of such a takeover? Thanks to recent investments in 300mm wafer fabs, we are now able to drive down our capex, so it would not make a lot of profitability gain for an acquirer to cut Infineon into pieces. We are in a market leading position on several fronts, and it is unusual for companies to buy leaders, we feel strong and valuable to our share-holders so I see it unlikely to happen. Of course, should a company or government approach us to make an offer, it would be my duty to look into it and consider it seriously. We would have to put the offer in perspective with how more valuable we think the company could develop on its own in the future. On the contrary, because of our strong cash position, we are constantly screening the market for valuable acquisitions to make. EETimes Europe: Infineon is leading the three-year Euro 55 million “eRamp” project in Dresden, it is also a driver of the Electronic Components and Systems for European Leadership (ECSEL) initiative. Do you plan to open up new fabs in Europe to support these initiatives? Dr Ploss: I am highly confident that we’ll continue to develop our manufacturing base in Europe. We are the only company worldwide to produce power semiconductors on 300-millimeter thin wafers and the cost/performance we achieve will enable us to stay competitive on a global basis. By investing early on 300mm wafer fabs for power semiconductors Infineon is now realizing a capital expenditure advantage of around 25-30% compared to 200mm technology. Thus 20 Electronic Engineering Times Europe June 2014 www.electronics-eetimes.com


EETE JUN 2014
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