Infineon recently released a lowered forecast for this year's performance, which has sparked market attention and discussion. It is reported that this reduction is mainly based on the current poor market environment, especially the weak demand in the automotive industry, resulting in the demand for automotive semiconductors is also affected.

As a result of Infineon's changes, they cut their revenue forecast for the year to 15.1 billion euros from 16 billion euros ($16.26 billion) previously, and lowered their gross margin forecast to below analysts' forecasts, down from 20.9 percent. The magnitude of the reduction underscores the importance of automotive performance to Infineon's business and the severity of current market conditions.

The automotive industry has always been one of Infineon's main sources of revenue, and the current downturn in the automotive market has been ongoing for some time. Especially in the case of slowing demand in the electric vehicle market, the automotive industry is facing greater challenges. This challenge also directly affects semiconductor suppliers, including Infineon. Previously, ST also said that this quarter will be a trough, the future will begin to gradually recover. Meanwhile, Tesla's first-quarter revenue also declined for the first time since 2020, further confirming the downturn in the auto industry.

However, despite the setback in the automotive business, Infineon is also looking for growth opportunities in other areas. Not long ago, Infineon announced an agreement with Xiaomi to provide advanced power semiconductors for its new luxury models until 2027. This diversified cooperation model helps Infineon to find new growth points during the market downturn.

In addition to the automotive industry, the downturn in demand from industrial customers has also brought a certain impact on chip suppliers, and customers are still trying to digest inventory. This is also a major challenge facing the chip industry at present, but it also lays a certain foundation for the future recovery of the industry.

Overall, Infineon's cut in earnings guidance has caused concern in the market, but it also reveals some hope for growth in the midst of challenges. In the current market environment, chip suppliers need to constantly adjust their strategies and find new growth points to adapt to the changing market demand and competitive landscape.

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