Infineon Technologies AG, Europe’s second-largest semiconductor maker, said Chief Executive Officer Peter Bauer will step down because of “severely worsening” osteoporosis and appointed a board member as successor.
The supervisory board accepted the 51-year-old executive’s resignation and named Reinhard Ploss, the management board member responsible for production, development, technology and personnel as CEO from Oct. 1, Infineon said yesterday.
Bauer, who took over in June 2008, helped pull Infineon out of its worst crisis by refocusing on selling chips used in cars and industrial applications such as lighting equipment. He ended losses at the Neubiberg, Germany-based company in the first year and has since helped Infineon post about 2 billion euros ($2.6 billion) in accumulated net income. The chipmaker this month raised its full-year profit forecasts.
“Peter Bauer stands for the turnaround of Infineon,” said Sandeep Deshpande, an analyst at JPMorgan Chase & Co. in London. “It is unlikely there will be radical changes in strategy” especially as the new CEO comes from the board.
Infineon fell 2.4 percent to 6.73 euros at 9:02 a.m. in Frankfurt. The stock has gained 16 percent this year, giving the company a market value of 7.3 billion euros.
Ploss, 56, has worked at Infineon and Siemens AG, from which Infineon was carved out in 2000, for more than 25 years. He led development and manufacturing before taking on responsibilities for Infineon’s automotive and industrial units. He was appointed to Infineon’s management board in 2007.
Ploss “has contributed significantly to the company’s innovation and earnings power,” Infineon said in a statement. “He also introduced a pioneering manufacturing strategy, which will serve as the basis for further profitable growth.”
During Bauer’s tenure, Infineon’s stock gained 33 percent before today, while STMicroelectronics NV, Europe’s largest chipmaker by revenue, lost 51 percent. Germany’s benchmark DAX 30 Index slipped 7.3 percent in the period.
Revenue will decline less in the fiscal year ending Sept. 30 than initially forecast and profitability will be higher, Infineon said May 3. Operating profit rose 2.1 percent to 144 million euros in the fiscal second quarter, beating the 131.1 million-euro average estimate by analysts. Net cash stood at 1.9 billion euros at the end of March.
“Maybe people will try to pressure him to use some of the company’s cash to make acquisitions or buy back shares,” said Eerik Budarz, an analyst at Silvia Quandt Research GmbH in Frankfurt.
This year, Infineon split its industrial and multimarket unit into two and elevated its chief, Arunjai Mittal, to the management board with responsibility for sales, strategy, mergers and acquisitions.
Infineon, whose customers include carmaker Bayerische Motoren Werke AG and consumer-electronics company Royal Philips Electronics NV, is benefiting from demand for chips that replace mechanical parts in cars, manage power in home appliances and windmills, and make passports and contactless payment cards secure.
Growth in global revenue from semiconductors will probably accelerate to between 6 percent and 7 percent this year, after a 3.7 percent increase to $301 billion in 2011, research company IDC said last month.