German chipmaker Infineon is cutting its investments by 20 perent in its 2012/13 fiscal year, ahead of a darkening economic outlook which it expects to hit its industrial clients.
"Macroeconomic headwinds are getting stronger and we do not see this changing in the near term," said CEO Reinhard Ploss in an article Wednesday by Times of India.
Infineon plans to cut full-year investment to 400 million euros (US$508 million) from a planned 500 million euros. This compares with an outlay of 890 million euros in the previous fiscal year ended September.
The company pointed out global economic uncertainties caused by high public-sector debt levels in Europe caused customers to be increasingly cautious in their willingness to spend.
The global chip market is going through a rough period as sectors from consumer electronics to automotive slow, noted the report. Chip sales this year are down 5 percent, according to the Semiconductor Industry Association.
Infineon also said it expected full-year revenue to fall 5 to 9 percent, laregely due to worsening conditions for its clients in the industrial sector, which accounts for about a fifth of its operations.
Infineon said it planned to cut costs through measures such as temporarily switching off underutilized equipment, reducing temporary staffing and selective use of shorter working hours.