Semiconductor Companies Share COVID-19 Business Impact

May 18, 2020 by Shannon Cuthrell

COVID-19’s effect on the semiconductor industry is only just beginning to take hold. In late April and early May, companies convened stakeholders to run through the early financial impacts of the pandemic. 

COVID-19’s effect on the semiconductor industry is only just beginning to take hold. In late April and early May, companies convened stakeholders to run through the early financial impacts of the pandemic. 

Here's a look at the latest earnings results from three major semiconductor industry giants and what they've shared as a result of COVID-19.



Swiss semiconductor chip maker STMicroelectronics recorded net revenues of $2.23 billion, an increase of 7.5% year-over-year, largely attributed to the growth of the company’s imaging, analog and microcontroller products. But, importantly, the company’s net revenue fell by 19% since Q4 2019. This is 5% below the company’s original mid-point outlook at the beginning of the quarter, but the gross margin of 37.9% was in line with the Q1 growth target.

In the earnings report, STMicroelectronics President and CEO Jean-Marc Chery noted that the company is experiencing challenges due to shutdowns in its manufacturing operations and logistics. As such, revenues declined for all of STMicroelectronics’ product groups, which include automotive and discrete; analog, MEMS and sensors; and microcontrollers and digital ICs.


STMicroelectronics earnings report for the first quarter of 2020
STMicroelectronics earnings report for the first quarter of 2020. (Source: STMicroelectronics investor presentation


Looking forward, the company projects decreased Q2 revenues of $2 billion, down by 10.3%, and a gross margin of 34.6%, compared to 37.9% in Q1. This outlook accounts for the declining demand for automotive products, as well as the operational and logistics disruption.

However, Chery added, “We anticipate that all of our manufacturing sites will be operational. Some of them will run at reduced capacity, with unsaturation charges currently estimated to be about 400 basis points.”



German chipmaker Infineon was bracing for impact as the coronavirus pandemic began to sink in earlier this year. In March, the company withdrew its earlier financial outlook for the 2020 fiscal year, originally predicting 5% year-over-year revenue growth.

The company’s latest earnings statement for the second quarter (ending March 31) recorded revenue of €1.99 billion (around $2.2 billion USD), a 4% increase since the last quarter ending in December. At the same time, quarterly net income decreased to €178 million, down 15% from €210 million last quarter. 


Infineon’s earnings for the second quarter of 2020, ending in March. (Source: Infineon presentation to investors)


In a news release, Infineon CEO Reinhard Ploss said that Infineon isn’t immune to the global economic slump in the pandemic, though the company has been able to maintain its operations in recent weeks. Infineon implemented cost-containment measures at an early stage of the pandemic, as well. 

However, Ploss added that the outlook for the second half of the year has declined substantially, particularly in automotive market revenue. “We are monitoring the situation in our target markets very closely and are prepared to respond swiftly to a variety of possible scenarios,” he said. 

Infineon’s recent acquisition of Cypress Semiconductor originally sparked high expectations for 2020 earnings. But adjusting for the coronavirus pandemic, Infineon is expecting revenue of the combined company to be between €1.9 billion and €2.3 billion in the third quarter. Zooming out to 2020 as a whole, Infineon expects a 5% decline in sales, downgrading from its expected 5% increase. 


Vicor Corporation

The Massachusetts-based modular power component manufacturer Vicor Corporation brought in $63.4 million in revenue for the first quarter, up slightly at around 0.4% since the fourth quarter of 2019 (at $63.1 million). However, Q1 2020 revenue is down 3.5% from this time last year. 

Vicor CEO Patrizio Vinciarelli stated in a news release that Q1 revenues fell short with supply chain delays and production disruption. Still, orders booked in Q1, and early-Q2 activity, shows demand for advanced products as increased adoption in AI, data center servers and vehicle electrification. As such, the company will expand its manufacturing facility in Andover, Massachusetts, to double production capacity. Vicor plans to open the new wing of the factory in Q1 2021. 

Vinciarelli added that the company hopes to increase revenue and bounce back to net profitability in the next quarter.

“While protecting the health of employees and confronting the challenges of the COVID-19 pandemic, we continue to operate our manufacturing facilities as an essential business supplying customers that depend on us,” Vinciarelli said.