Status Update

Jul 1, 2021

Slides

Good day, everyone. Welcome to Infineon's PSF Update Call. Today's call will be hosted by Holger Schmidt, Director, Investor Relations of Invenion Technologies. As a reminder, today's call is being recorded. This conference call may contain forward looking statements based on current expectations or beliefs as well as a number of assumptions about future events. We caution you that statements that are not historical facts are subject to factors and uncertainties, many of which are outside Infineon's control that could cause actual results to differ materially from those described or implied in such statements. Listeners are cautioned that Imbidian's actual results could differ materially from the results anticipated or projected in any of these statements and they should not put undue reliance on them. For a detailed discussion of important factors that could cause actual Results to differ materially from the statements made in today's conference call, please refer to our quarterly and annual reports available on our website. At this time, I'd like to turn the call over to Infineon. Please go ahead. Yes. Hello, everybody, and welcome to our PSS Business Update Call. Today's call will start with a presentation given by Andreas Rusitz, Division President, Power and Sensor Systems. A live slideshow that is synchronized with telephone audio signal is available on our website atinfineon.com/slides. After the presentation, we will be happy to take your questions. Kindly asking you to restrict yourself to one question and one follow-up, please. A recording of this conference call, including the aforementioned slides, is available at infineon.com/investor. Andreas, over to you. Yes. Hello to everybody. This is Andreas speaking from UFINA. I am delighted being your host today for performing the PFS presentation, in that case, digitally at the Digital Mobile World Congress 2021. Holger, next page please. I'm starting with, as usual, an overview of power and sensor systems at a glance, if you will. On the left hand side, you can again see an updated development of PSS Financials in terms of Revenue growth and also segment result margin, as seen here in the past 5 years, PFS has managed to grow its revenue 7 percentage points, CAGR, last year ending at around about SEK 2.7 billion of annual revenue. Profitability used to be at 24 percentage points. Looking into the first half of the current fiscal year 2021, we are at roundabout 1.6% in revenue, Again, repeating 24 percentage points of segment result margin. If I move And if I may ask you to move your eyes towards the right hand side of the slide. So this is PSS's revenue Split by major product segments, roundabout 40% of PSS revenue is done with MOSFETs, power MOSFETs, That includes and also silicon carbide and gallium nitrate cells. Around 25 percentage points are power ICs, Another 25 plus is radio frequency and sensors and the rest, 10%, including Hyrule, is what we would call the others category. Next page, please. Let's come to the market. This is PSF business or let me say the majority of PSF business, along The major application segments where typically we are in. On the left hand side, you can see The sections of computing, communication and so on and so forth, you can read on your own. Let me guide you through on how we do see the market on the short term and midterm segment by segment. So top left in the Computing segment, which contains mostly applications around Data center thermals, but also PCs, computers and laptops, which accounts for 20% of PSS revenue. We see strong market demand also in second half of fiscal year and calendar year 2021. Mostly that is driven by the effects of digitalization and the demand for, so to say, more infrastructure, more Internet, more connectivity and so on and so forth that is translated into computer equipment and server farms data centers. We see continuity of demand also ongoing in calendar year 2022. So definitely, that Market is and we are supposed to see it to remain in the boom phase. Communication segment, which pretty much has to do with chips that we sell into 4 gs, 5 gs infrastructure and also other Adjacent kind of applications, 9% of PSS revenue. We see a side growth trend at the moment in second half of calendar year twenty twenty one. Mostly that goes back to the 5 gs supplier landscape resorting itself after all this Cosmopolitan and global political tensions in between China and the U. S, so that market is a bit shaky, if you will, at the moment. 2022, we expect that to be much, much clearer with regards to then makers of 5 gs infrastructure to have found the new routes and paths to kind of take the air shares in the global market and demand for 5 gs. So In a nutshell, we expect that market to boom. Smartphones, I keep it a bit shorter, makes up roundabout 20% of PSS revenue. We see that strong in also second half of calendar year twenty twenty one and It continued to boom in 2022, 5 gs definitely and a rising number of use cases that rely on 5 gs, which goes hand in hand also with more and more 5 gs infrastructure to be deployed, are drivers for demand also for 5 gs enabled mobile devices. Consumer section, another 20% of PSS revenue is in a boom phase. So everything which Consumers like you and me need at home used to boom during COVID and continues at the moment to doing so. In 2022, we expect that market to kind of make a sideways trend. So our expectation is that after people Have equipped their home with new devices, new TVs, new whatsoever electronics that are surrounding us that this takes a little bit of a pause And consumer spending supposedly may go into the area of the more leisure time and outside oriented activities. So here we see a cyber strength. I want to end the slides with the Industrial and Automotive segment, which is another 20% plus of PSS revenue. Automotive subsystems such as onboard chargers or then also electronic charging stations as well and there's also electric Tools like drillers, you can see here on this icon, have been booming in 2021, and we expect them to continue to boom also in 2022. So all in all, if you will, quite a positive outlook for Calendar year 2022 as far as the whole of PFS is concerned. So we see that to be a function of 2 factors, if you will. Factor number 1 is the cyclical demand drivers that we're all aware of. But factor number 2 is also Sure. Demand that comes along with those applications that you see here, which are typically in themselves Strong growth applications as a function of, on the one hand side, digitalization and acceleration of digitalization. And on the other hand side, and also CO2 as a green deal also that drives anything that goes in the direction of energy savings and that blends into Energy efficient semiconductors as well as sensors, I'll come to a couple of examples then later, in order to reduce CO2 emission going forward. There's also kind of counter momentum and if you will, so called however, While the market continues to boom structurally and cyclically, we also see headwinds in the context of COVID not yet being over. Another example is the recent lockdowns that used to happen in Southeast Asia. And as far as Infineon is concerned, we got also hit by Country wide lockdowns in Malaysia. So there was a new outbreak in certain regions. Infineon Entertainment's The manufacturing site in Malaysia, mostly our packaging site. In Melaka, we managed while there was shutdown ordered by the local government to get us on the list of system critical industries, if you will. At the moment, we are still sorting out on what the impact of, So to say, a certain amount of lockdown situation that still remains will impair Will bring us towards in the foregoing couple of weeks months. Next slide, please. At this moment, I want to dive a little bit deeper into a subsection of PFS business, Namely, in the radio frequency and the sensor portion of PSS, remember back, that makes up somewhat like 25 to 30 percentage points of PSS revenues. So let's go a little bit deeper on what PSS offerings are looking at the very moment and give you also With regards to roadmap information. On the chart, you see an overview of PSS' Most important product families we are offering underneath the portfolio of sensors. Top left, MEMS microphones, Well, we're pretty much convinced a significant portion of the market to buy Microphones and audio chips from PFS from Infineon, which brought us in number 1 position in market share in 2020 already. Lowest Our consumption and best performance in Audi experience are definitely strong sales arguments where our customers like to work with Infineon and Want to go with us. Radar sensors, which are pretty much used in presence Detection and biosensing functionalities. So here, we are proud of having the most accurate and best signal performing radar sensors in the market. They're used by many customers as a kind of 3 d sensor, sort of replacement of what I would call the human eye Without creating a picture, but telling electronics what happens in the surroundings, such as using radar technology for LIFO SENSE. We also have 3 d Time of light image sensors, both create a point cloud, if you will, of a 3 d surrounding of any electronics Device, so here we are offering a turnkey solution to our customers for mostly in the area of smartphones, but also in Applications such as payment terminals for face identification, automotive in cabin sensing and other such related applications. People like to buy from UFINA because we offer a turnkey solution, which is the hardware and the 3 d imager, including turnkey ready to use Software to operate the 3 d camera. The software we do together with our partner and where we also hold kind of a minority stake. The name of this company is PMD Technologies, as you're well aware. 4th category of Infineon's product portfolio On the sensor side is our environmental sensors. So we have been introducing a very accurate and small form factor CO2 sensor to the market in 2020, which also found its way towards being used as a sort of an indicator for aerosol density in rooms And giving very early information with regards to Hague, the COVID infection risk may be rising as a function of increasing CO2 in a certain room. So here we see a lot of momentum and interest in the market to get that sensor being used in many of our applications That go far beyond also what is mentioned here, bottom right, reduction of, so to say, virus risk and Related things. Next page. That one is meant to give A bit of an idea of the offering of Infineon in the context of sensors. In principle, Infineon provides 3 different Business models or offering packages to its customers. Offering number 1 is the single sensor chip, If you will, like a single radar chip, a single microphone, a single 3 d camera, where a Customer and most of these customers who use the plane chip build those chip in their software ecosystem and environment. These are typically large sized customers, mostly Internet and Internet hardware giants, as you're well aware, Goodbye a chip from us and do the work on the system integration of the chip and using their software in order to get maximum out of Infineon's high Schmidt. In order to create new use experiences such as unique audio signals and voice Detection in a smartphone, but then also presence detection in a certain room settings. However, When you talk about the wider field of market players and if you will, players that make themselves Places in the area of IoT and related applications, you all of a sudden realize that the vast majority of customers Our lacking experience in terms of software integration and algorithm capability in order to get The best out of the sensors they buy from Neuthenium to make a certain system functionality like presence detection, Hyprofencing, 3 d imaging in the context of face recognition and other such use cases truly work. These are customers that typically ask for model number 2 shown on this chart, where Infineon, in the meantime, Since the acquisition of Cypress is in the comfortable situation to offer full single sensor systems to its customers, Which is, in this example, the combination of a sensor, which provides raw data like a radar sensor detected 3 d Cloud of the environment to be interpreted by microcontroller, in that case Infineon's legacy Cypress PSoF family, coupled with some elements of software and even machine learning, which all of a sudden enable a customer to use It's kind of a ready to use hardware and software based solution to deploy in their system. Systems are smart speakers, are air conditioning systems and many others. We come to that then also in the later part of the presentation. Last of these is the model number 3, where we combine different sensors plus a microcontroller Plus software elements and machine learning, like in this example, a microphone plus a radar sensor And the compute power, including the software to interpret what the microphone is saying and what the radar chip is giving as an input signal, All of a sudden, customers here with has the possibility to get access to mighty sensing where a radar chip can help in a room situation to detect where people are talking And then rectifying the beams, the audio beams from microphone, in that way that the audio reception through the microphone is getting much, much better. So the combination of sensors, some talk about this and also by saying and calling it the sensor fusion creates a lot of additional value to our customers. In a nutshell, customers can choose 1 or 2 or 3 from Myfina. Next page. That kind of business also requires much more intensive collaboration and joint development with Because different scenery settings, for instance, for presence detection while using a radar chip, Looks different in a smart speaker as compared to when you use a radar chip in whatever kind of a headset for remote controlling the headset through gestures. So in a nutshell, what this picture shall say is that there's a lot collaboration ongoing and joint development ongoing, in particular, in the software engineering side, in between Infineon and those Customers that are listed here, in order to make applications such as Sony's latest and greatest high end over ear headset, which is using 9 microphones From Infineon, work also that Xiaomi Smart Cleaner, which is using a 3 d camera from Infineon in order to kind of let the cleaner know the room circumstances in order to avoid Too much kind of crash situation when the cleaner is kind of then silently driving through the room and cleaning up stuff. Next page. That one goes a bit deeper now in the section of silicon microphones. You know pretty well that InfiniBand has become the market leader in the silicon microphones in terms of market share and units in 2020, last year already. One of the most interesting growth markets that we do see and where we I have gained strong momentum also in Finland as a core supplier is the application of true wireless stereo headsets. And this is what is here and also shown on the top right part of the chart. It shows an estimation of Growth of TWS Headsets Going Forward. So the Average Growth Rate by analysts is Just it to be around 42 percentage points. Infineon's microphones with their super good A world record signal to noise ratio and a couple of other elements that we are providing is predestined in order to enable true wireless stereo headsets and going forward. So very interesting application for us, where we expect a lot of growth going forward after we have For Infineon as a, if you will, chipset and system solution supplier for TWS application, In a nutshell, you can say that Infinon within its portfolio has almost each and every active semiconductor that is needed Very high system requirements, providing the greatest use experience that you can imagine. So let me start at the top in the middle. Infinon has a gesture sensor in the form of a radar sensor, which can be used going forward in the, So to say earplug for remote controlling the earplug, that's something that's under development, if you will, by a couple of these CWS makers. InfiniBand is massively used already for active noise cancellation in ear As well as outer ear microphones are being used for that one, sophisticated technology to provide, so to say, a meaningful Real kind of room experience while using that earplugs. It's very difficult to do and requires Hi, and so to say, microphones that help noise cancellation to be done in a way that when you use Bluetooth and Wi Fi that are being used in the earplug as well as and also, so to say, in the basket Underneath, so to say that the cage for the year plus. We are also providing the chips in order To power this kind of cover, also USB chips are being provided in order to kind of make Data transferring between the cover and wherever you then plug it into by USB cable. Infineon provides microcontrollers In order to have a communication brain in between the ear plugs, the cover and then also the cover and, so to say, the charging cable. And other than that one, we have 2 things under research, if you will. That's, at the moment, the MEMS speaker. So here in Finland is not yet having a product, We are working on this since the earplug is using a rather small and low volume A kind of a speaker in order to give you sound and make you hear a meaningful sound experience. All of a sudden, silicon based speaker becomes very interesting and is something which Infineon is putting a lot of R and D into. And last but not least, we are also working on a voice processing unit, which is a kind of an Stella, Holger, that it shall be used going forward in the earplugs in order to ease up detection for the earplug When you kind of move your mouth while speaking in order to make a meaningful noise cancellation And cancel out while you speak your own language from the speaker that might be transporting language into you With the help of the VPU, that can be excluded. Nice opportunity for Ipinion going forward. And We're working on, so to say, further gaining momentum and revenue and profit in that section. Next page. I come to our offering in radar. I've been talking about this quite a lot during the last NWC, so to say, face to face Presentation and discussion with many of you who participated that very day in Barcelona. Mostly, radar, in the meantime, found its If you use in these two use cases that I mentioned above, one of which is presence detection, radar can very Accurately segment a room scenery, like you can see on the bottom right hand side, with regards to How many people are in the room? How far away are they from the electronic device? And are they moving in the room from A to B to C? Why is this so meaningful and useful for many kind of electronics? Think about Your air conditioning system in a hopefully smart building, it makes a difference whether the air condition switches on or off depending on the room Occupancy and the number of people in the room. So I think that's pretty much no rain in the context of then also energy saving. But the other topic is radar can be then also used in order to kind of steer the stream of the air in the room as a function of radar making the air conditioning Schmidt. So the room feeling with the help of radar while the climate The air conditioning system is being switched on. All of a sudden, it gets much, much better, and the customer experience is heavily improved. That's just One example with regards to where presence detection makes a lot of sense. Energy saving and customer experience in A heated or cooled Ruben Bynum. Health monitoring is something very interesting. So Very meaningful and so to say innovation, pace making customers, in particular, In the U. S, we've started to use the radar chip being put into applications such as smart speakers or Applications like the Google Nest remote controller somewhere in the sleeping room In order to use the radar functionality to detect and surveil Your sleep, so it's used for sleep monitoring. It's used for, so to say, surveillance of vital sensing And the radar information giving then to the Google Nest controller, if you will, Helps people a lot in order to then, over the time, kind of observe your own sleep rhythm, do things like Aplia and then also snoring detection and by doing so, giving you hints in order to sort of work on your own room settings to simply improve Sleep and therefore improve well-being. Lot of interest by many, many electronic device makers in their functionality as far as radar is concerned. Next page. Deep dive into time of life. Time of life has been Discussed up and down and back and forth with regards to 3 d cameras being used for face detection Schmidt. So to say, front side of the smartphone, but also improvement of photography and also augmented reality features on the world facing Hi. One of the interesting things, Verinthenen has been working together with its partner company, PMD Technologies, and 3rd party in China, a company called ArcSoft, is a functionality that we are offering, which is Under display, 3 d camera allowing highest accuracy in face Authentication and face recognition to switch the mobile phone on. Why is that so interesting? Many smartphone makers go into the direction making their screen bezel less, so they want to remove holes and camera areas On the surface of the screen, putting a camera underneath the screen is something which is recurring a lot of engineering arts. Infinium, together with PMD and Axos, with the help of AI, found a solution for under the display 3 d imaging. That's going to be launched in the market very, very soon in the Q4 of fiscal 2021. So that's, if you will, an early information for you. We expect and already have a lot of interest from market players on that solution to come to the market. So Next page. Keep it short, that gives an overview on the latest use cases that we are confronted with in the context of mostly smartphone makers or makers of Smart glasses and then also sort of robotic equipment like this smart vacuum cleaner By having 3 d cameras built in, so in essence, every electronic device that needs to be better aware about what happens The surrounding and where 3 d map of the surrounding makes a lot of sense. He's talking to Infinon in terms of how to use and How to then also apply 3 d cameras in a smartphone, be it the front facing or be it world facing cameras, in consumer robotics And here we come into the 4th sensing category. If you remember the picture I showed, I think it was Slide number 5 or 6 at the beginning of the presentation. It is our latest and greatest gas sensor. So indeed, it is a CO2 sensor, which is the smallest and high precision and most high precision CO2 sensor on the world that you can get. It's the uses in Pheno's competency in the area of MEMS technology where we have, so to say, a lot of know how, How to do super accurate micromechanics out of our experience in silicon microphones. And the 4th acoustic principle That to a certain degree is applied in our microphones is also used in order to detect the CO2 A number of CO2 molecules that are in a room in a microelectronic based and chip based, so to say, housing. The chip that we have been introducing to the market, you see on the bottom left hand side. So its size is super small compared to anything comparable in the market. Kind of 14 millimeter times 14 times 7.5 millimeter is much, much smaller and also much, much more, If you will, energy saving as compared to anything else that you can find in the marketplace. In what applications do we see That sort of solution to proliferate mostly is used, and we see market interest in the area of, so to say, Air conditioning systems and room conditioning systems. So understanding the CO2 circumstances in certain rooms, be it office rooms or private rooms, Very important, so to say, information for meaningful climate and airflow controlling given loan circumstances. The other topic is definitely the use of the CO2 sensor in the context and also of Automobiles, where you can also see 2 values in cabin are of an importance. Many other applications we to come and use the sensor then going forward because at the end, making electronics SNELL and understand CO2 scenario in the surroundings is of a meaningful use for many, many other applications. Next page. Such as small and smart buildings as seen here. I tried to sum it up. So Infineon's sensing solutions, including power semiconductors, including connectivity, including microcontrollers and even security, Bring us in a pretty good position with regards to being a Premier League supplier for Smart Building Management and Smart Buildings in the future. So where you can find Infineon sensors, connectivity, power, security, but then also control devices are Typically a smart building, dawn light systems, so dawn lights which are being shipped with power semiconductors from Infineon and also radar sensors in dawn lights to Smartify buildings in terms of letting rooms understand how many people are in a room To better control the air conditioning and safe power, if you will. Crisis detectors and CO2 sensors are being used in the air conditioning systems as such, So to say, to do CO2 monitoring and then also regulate the air condition in a meaningful manner. Infineon's power semiconductors are used in general in everything that requires powering the smart building, partially then also in, So to say then, the smart building control systems, which are typically in, I would say, smaller kind of Observe environment that you typically find in the cellar of such a building, so these are full width of our semiconductors from Infinium. And last but least, access control. So Infineon's trusted platform modules, Infineon's Smartcards are simply used in order to kind of Access in a wireless and touchless manner buildings, rooms and other such kind of settings. Next page. That's the second last one. People are very often asking me, hey, In particular, when Infino thinks about customers that are not that knowledgeable how to deal with sensors and sensor Systems and who want to kind of perform 3 d functionality, be it with radar, be it with time of light, who want to perform CO2 sensing functionality, audio functionality. How do we enable these customers in order to get them quick started in their R and D surrounding? What you see here on the right hand side, so bottom or top right of this on this chart is, so to say, a little bit of magic, No longer secret. So we have been providing the market in the meantime for a couple of months with a main board As a basis, for each and any developer of an IoT device, in order to combine and connect to the Internet, A wing board, which is a fully functional CO2 sensing system that The customer can simply kind of stack on the main board and kind of connect the ready to use CO2 sensor towards the www. And the latest that we brought to the market is another wing board, which is a radar sensor, which is kind of enabling to use and to have a developed at the customer side, use 1 in the same main board, get it connected to radar functionality and implement in a very fast and easy to use manner Presence detection or idle sensing functionality in any kind of, so to say, electronic system that the customers developer are being working on. Next page. Margot at a glance. So the microphone market is suggested to grow from 1.2000000000 in The total available market from the semiconductor perspective to roundabout $2,000,000,000 in 5 years from now. Major growth driver for sure are these TWS headsets. So interesting market for us and definitely growth engine. Time of light images are suggested to grow from these roundabout 200,000,000 In the market in 2021,000,000 to €1,400,000,000 in 2025. So there is a broad proliferation expected, mostly, of course, driven by proliferation of 3 d cameras in smartphones. RADAR AC market is suggested to grow from 150 to 600. So also here, nice growth for 22, 24 and 60 gigahertz radar chips. And last, at least, also very interesting market growth in the area of CO2 sensors, so that goes from roundabout $300,000,000 to $700,000,000 in 5 years from now. So all in all, Strong structure growth expected for our sensor business going forward. Yes. Thank you very much, Andreas, for all these interesting insights. Ladies and gentlemen, this concludes the presentation, All right, we'll go ahead and take our first question from Kristof Auri with ODDO. Please go ahead. Yes. Hello. Good afternoon. Thank Thank you for the presentation. Maybe a first quick question is to understand If you still see the same kind of growth going forward that you have witnessed in the past, I. E. Around 7% or you see any reason for an acceleration in this growth. And second question is about capacity constraint. Do you see Any capacity constraint at the moment? And can you, by the way, describe if you outsource, insource or both the production of your products in this division? Thank you. Historically, we have performed a CAGR of 7 percentage points In revenue, going forward, we expect 9 percentage points or more through the cycle. I've explained a little bit on what are the background considerations. So mostly, it is the structural growth of the key applications, which PFS is in, which will allow us and be the basis for growth that goes into the arena of 9 percentage points plus. 2nd, on the capacity side. So you always have on the capacity question, we have to distinguish part of our manufacturing are, So this is placed and done in silicon foundries, and part of manufacturing is done in house. As far as silicon foundry manufacturing is concerned, and we have forward beamfounders. We have part of our power semiconductors running foundries As well as and also part of our sensor portfolio, NanuFoundries. Everything that comes from foundries, we foresee that We will remain very, very tight and capacity limited until deeply 2022. As far as in house manufacturing is concerned, so we expect the situation to ease up a little bit relative What we oversee today, so second half of twenty twenty one should already be, so to say, a little bit better with regards to our capability to ship according to the demands of the market. Nevertheless, I expect us to remain allocated well through 20 21 also as far as the in house capacity is concerned. Okay. Thank you very much. All right. We can go ahead and take our next question from Andrew Gardiner with Barclays. Please go ahead. Thank you very much. Andreas, I had sort of a similar question to Stephane's, but perhaps we could extend it out into next year. What Infineon at a group level is clearly spending a lot on CapEx at the moment in order to provide for the structural growth as well as to alleviate some of the current capacity tightness. You mentioned you think things remain pretty tight through the second half of this year. What as a division manager, What are you expecting to see in terms of capacity coming online for you, for your product lines in particular Very generally speaking, we have a guidance out in the marketplace. So as far as, So to say short term 2021 fiscal 2021 growth is concerned, we pretty much foresee that we as a group and also PSS We'll remain in the guidance and we'll remain in the revenue corridor that has been communicated multiple times. To be a little bit more specific on PSS and the outlook of PSS, kindly ask Holger to maybe flip back to the slide with The revenue, I think that was Slide number 3 in the presentation. Give me a moment. It was Slide 2. Thank you very much, Holger. Now that slide already gives you a little bit of the answer, so just by applying mathematics. So if you look into what PSS was capable of performing in the first half of twenty twenty one, 1.5, dollars 6,000,000,000 in revenue. And if you consider DAS to be At least duplicated in the second half of the fiscal year. That gives a little bit of a feeling on where, So to say, give or take, at the end of the year, you may find PSS ending up with in terms of its revenue performance. That's significant growth in revenue relative to fiscal year 2020. And that significant growth relative fiscal 2020 is a function of our CapEx strategy, which I also was kind of elaborating on all the times I talked to you, being a competitive differentiator for not only PFS but also Infinil as a whole going forward. Owning capacity and Spending CapEx that we'll be doing it is decisive with regards to us being able to offer to our customers The supply security, which makes the difference in terms of the customer and the particular large And the value created through semiconductor availability and Infinor being able to ship Ahead of the one or the other competitor, that value has never been larger before, and our customers are continuing to buy in that buy into that rationale and want to partner with us also going forward. So in a nutshell, we will continue to deploy CapEx. We will grow. And as I said before, please justify the mathematics significantly in fiscal 2021, and there will be a further capacity extension in 2022. I am not yet in a position to give an outlook where we will finally end up in terms of capacity in 2022 because still we are Sort of evaluating on how much we get from the foundries, that is also of an importance to us and how much we get deployed in terms of Additional equipment installation in 2022, which will then again make the difference in terms of revenue growth. So it's a long answer, but gives a little bit of flavor where we stand. Thank you, Andres. All right. We'll go ahead and take our next question from Jurgen Wagner with Stifel. Please go ahead. Yes. Good afternoon. Thank you. A question on your 3 d time of flight turnkey solution that you mentioned. What ASP are you targeting? And Who would be your display partner? And the second question on the supply chain issues. You mentioned the recent lockdown in Malaysia With impacting your back end side, how meaningful is the impact for you in terms of revenues this quarter, thank you, of the last Yes. Pricing is always a difficult thing to comment, as you know pretty well. So Typically, for such kind of devices, Of course, as a function of then also volume and as a function of is it a large pixillary A smaller pixel array, which has a massive, massive, so to say, difference with regards to the camera performance and many, many others. So typically, you're talking about price ranges, which are again volume dependent And functionality dependent, you will find the marketplace something in between $2.5 up to even the double digits. So when you think about very complex three d systems that are used, for instance, in robotic systems For warehouse management and stuff like this, yes. So that shall give you a certain feeling. Is that your ASP or the total ASP There is not a total ASP, if you will, with is a new phenomenon ESP that includes, of course, the software stack, if you will. I think that gives you the answer, yes. Okay. Okay. So hardware at Nokia, that's what we are talking about here. Yes, the second part of the question, can you please repeat? The display partner, I guess you are testing it with a display provider? We are not partnering with the display maker as such. So we are partnering with a company whose name is ArtSoft, who are specialists in, if you will, video computing and vision software, mostly today in 2 d cameras, going forward in 3 d cameras. And together with them, we are working, so to say, on making Algorithms make the 3 d camera work under display so that the signal detection of, for instance, Of measuring and detecting your face in the authentication use case is accurate enough and fits The very high standards, it's a meanwhile usual in the marketplace. So but the trick is not the display maker as such. The trick is, so to say, to find The artificial intelligence and the algorithms for under display use. Okay. Okay. Thank you. And the second question was on the impact of Malaysia in the last quarter in terms of revenues. The impact on yes. Yes. How much sales you lost That I apologize, I cannot answer yet. That is under elaboration since that is happening while we speak. So the majority of manufacturing modules, we managed to still keep on working full steam. There was a bunch of manufacturing modules, which due to, so to say, people needing to stay at home, we could not operate. The entire impact towards internal supply and revenue is under elaboration. So we will communicate on that More tangible figures for you in the very near future. So please be patient. Okay. Yes. Okay. Thank you. All right. We'll go ahead and take our next question from David O'Connor with Exane BNP Paribas. Please go ahead. Great. Thanks for taking thanks Andreas for the presentation. Maybe a question on my side on the data center side of things. In data center, you talked about being positive for on that business. Clarify, do you expect U. S. And China, both of them to remain strong? And just could you also just clarify if there within your data center business, If enterprise plays a role there or are you mainly just focused on the hyperscalers? Thank you. Yes. I try to keep it crisp. So most data center demand And demand for power semiconductors to fuel the data centers with efficient electricity Definitely comes from the U. S. As well as China. So vast majority of demand is driven out of these two regions. Demand drive in this context for sure is hyperscale data centers far ahead of what You would call enterprise data centers or enterprise servers. So the growth engines are hyperscalers Class, that's something you did not mention. I think you're also having that in the back of the mind. Machine Learning Data So these two things used to be the growth engine and will continue to be the growth engines going forward. With regards to data center capacity and installations, unfortunately, there is no clear Data available in the public space. So from what we can oversee, we estimate that the data center capacity or data center CapEx amongst major data center installers Such as Amazon, Microsoft, those Alibaba, some of them are kind of releasing the one or the other figure. We estimate that The CapEx capacity expenditure for, so to say, capacity expansion was in the range of in the 20 percentage points, give or take, during 2021. From what we can oversee, That appears to continue. So if you ask me, I see that figure and that demand going on and also towards 2022. To what extent the sum of all supply chain players really allows 20% CapEx Is to me not yet completely clear while we speak. But demand wise, definitely the demand for data center capacity Is strong, remains strong, comes from hyperscalers and machine learning. And there's another thing I want to make you aware of. What's just about to start is this, I would say smaller size remote data centers in the context of 5 gs telecommunication. Typically, these are kind of fog compute centers. People are calling that name that are placed Pretty nearby or next to 5 gs stations in order to do some preprocessing of whatever data that is being Pushed through 5 gs Networks before it's uploaded in full fledged data centers in order to do some compute demand. Compute power, which in the data center, of course, is always costly and coming at a price at a certain price So having said that, FOC computers is something that we see rising and that also drives demand for data centers in a wider sense. Very helpful. Thank you. All We'll go ahead and take our next question from Sebastian Stavallik with Kepler Cheuvreux. Please go ahead. Yes. Hello, everyone, and thanks for taking the question. One question on your Computing business and notably for 2022, Because it seems that the PC market could potentially peak in the back half of this year and maybe decline in 2020 2 in terms of shipment after 2 years of exceptional growth, I would like to know how do you see the demand for PC or laptop related product Moving into 2022, and what is the size of this specific business within your computing And another short follow-up would be on the time of flight sensors. Do you have any specific design in hand With your new under display 3 d sensor solution. And when do you expect the sales volumes to come with this specific solution? Thank you. Okay. Let me answer first question first. The second, you need to repeat because acoustically, I do not understand everything. But let me start with answering the first question. So the vast majority of PSS revenue It is in the 20 percentage points of minor importance, if you will. Asking or coming back to the question on, so to say, how do I see PCs trending? PCs, I see trending sideways while we Speak with regards to number of desktop PCs, and most of them we see to happen in the area of Gaming use cases. So that's quite interesting that not new, but interesting that that's showing strong growth momentum, namely gamers Using the latest and greatest PC equipment in order to have a better use experience, if you will. However, also the gaming sectors and the For desktop PCs, for high end oriented gamers, also, there are certain limitations due The shortages on the, so to say, graphic card ICs, as you know pretty well. All in all, it sums up that market goes sideways. Last statement, the market for laptops, which also falls under this computing segment here on this chart. We see that trending upwards. However, we see, so to say, an inherent, so to say, shift of product mix. The number of laptops being produced, which are kind of same client based systems, which means that they do most of their compute activity in the cloud. That is something which is heavily accelerating. And we think that has a lot to do with Schooling from home and, so to say, pupils using that kind of in client, lower priced laptops, Okay. Thank you. The question on the under display 3 d sensing solution was whether you have already some designs Win in hand and when do you expect the first revenue potentially to come in? Yes. What has been made public and what I'm in a position to sort of then also share with you is Infineon's position with its 3 d time of light imager in smartphones that are being done by Google, for instance, smartphones being done by Huawei, smartphones being done by Honor, which is this Huawei spin off. Smartphones being done by companies such as Sharp and also LG. So these are things that have been publicly announced. Beyond that one, I can ask you for understanding. I cannot share information on major design wins due to secrecy policy, if you will, All right. We'll go ahead and take our next question from Jerome Raimo with Exane BNP Paribas. Please go ahead. Yes. Good afternoon, everyone. Thank you. Quick question, Andreas. On the chart you showed about the sensor market, so the MEMS microphone market, the 3 d time of flight, the radar and so on. Could you maybe just share with us what kind of market share you are targeting for this market? And the follow-up question is concerning the 3 d time of flight. Could you share with us the road map you have in terms of pixel size? Thank you. With regards to market share targets, Let me say, I can give you ranges for selected areas. So definitely, we intend to grow our market share further in the area Microphones, so what you have seen before, the MEMS microphones. So while we speak, we are give or take in the range of 40 percentage Plus, minus depending when you look at it and what source you're using. So definitely, target is going north of this Roundabout 40s. And so the same design in and wind funnel also blends in the direction that we can execute on this plan. So the other topic, which goes then into CO2 sensing, radar sensing and time of light sensing. Let me put it like this. At time of light, We have not set a concrete share target in this context. Time of flight also in the PSF Business Planning, When we're talking about greater than 9% revenue CAGR for PFS division through the cycle, time of flight is not included. So that's the right card for us. Also in our business planning, we believe in this market, we invest in this market, and We have success in this market and going forward not a target set yet in the context of market share and also not significant As far as radar is concerned and then also CO2 sensors are concerned for us here. It's a bit tricky to talk about market shares because the Sub segmentation of something like radar or there are also CO2 sensors on the other hand side. It's not that easy since you have automotive applications, you have industrial HVAC applications end on end. Not easy to derive a market share target. Of course, we're on a revenue plan, if you will, and we could do certain mathematics In this context, but allow me to, at this very moment, not take a specific position in that one. For sure, In principle, I can tell you number 1 position is what we target in rail and versus number 1, we target them also in the CO2 sensor, if you ask me where are we today, CO2, we are a starter, so not yet meaningful market share. And ReDA. We are pretty sure that in 60 gigahertz and 24 gigahertz, we are already market leader. I hope that helps a little bit. Second question was on the imager, sorry. So As far as imaging is concerned, look, I personally, and Infinium does not believe in the same logic That typically applies in the 2 d camera segment to be, so to say, transported as a logic with regards to number of So in 2 d, it's always a race for more and more and more pixels on a given size of a camera chip. That's not the case in 3 d because the functionality of a 3 d imager is the system functionality of a 3 d imager is very much, So to say, depending on what the 3 d, which are typically used for, and when you have a look at this slide that is now shown in the webcast. Stuff such as then, for instance, Far field looking with a 3 d camera in a world facing camera scenario, where a 3 d camera is being used In order to sort of then also make a distance measurement of a group of people where you take a photo, That in essence and do that very accurately does not require large pixel field in order to generate the required, So to say, sensing and dots projected towards a group of people That you're needing to interpret and to calculate what's the distance of the people whom you want to photograph and then do an auto zoom and then make a very meaningful and then also energy So what I'm trying to say is Infineon's Intention going forward is definitely to grow from 300 ks pixels, which is today a standard that you're offering, Getting it close to the one mega, if you will, in this context, but Not beyond on the roadmap where we speak. Thank you, Bernard. Size of the pixel field, number of pixels, By no means the same logic as compared to the camera systems. Yes. Okay. Thank you. Very useful. Thanks, Andrea. Okay. So we go for another okay, good. Go ahead, please. I was just going to take one more question, if that's all right? Yes. Okay. We'll go ahead and take our next question Good afternoon, all. Amitur Chandani from Citi and thank you, Andreas, for an informative presentation. I just have one question from my side And I wanted to get your thoughts on how we should think about the impact of inflation for your business, for example, in terms of the cost of inputs, In terms of cost of freight, to what extent can you pass this on to your customers, multiyear contracts? Any details that you can give us to help better understand and articulate the impact of inflation for your business this year as well as going out into further years. Thank you. As I was mentioning before, The value created by Infineon and by semiconductors from Infineon in the larger Industry or even in the economy never has been at that high grade as today. And the trends of Our importance to fuel the economy, if you will, with semiconductors is still increasing while we are speaking. So having said that, there are 2 things I want to mention. Point number 1, demand and So stronger demand momentum and demand increase, I personally believe, has come to stay for a longer period of time than at the moment and Russ Can you imagine? As a function of that, partnerships with customers and Us engaging with customers also has reached new dimensions in terms of strategic nature of partnerships that allow us to engage in long term contracts, if you will, on the one hand side. So we engaged with Substantial amount of large size customers already in longer term buy and purchase agreements. On the other hand side, the circumstances and the importance of semiconductors and the value of semiconductors and their availability, For sure, I have brought us in the position where customers even would say invite us, but It goes without saying all of a sudden in many negotiation situations that Infineon does and also can, in a meaningful manner, pass over Cost increases that we do see from our supplier base towards our customers. So that has been something that Has been changing in the last couple of, I would say, quarters pretty significantly compared to I got used to like 10 years ago, 5 years ago or so. So in a nutshell, yes. We are managing to pass through cost increases that we do see to our customer This for the benefit of both of us because the Air With Infineon ensures supply security. We do everything to Secure supply to the best of our ability, and that also goes hand in hand with us, accepting also higher prices from our suppliers, Well, our customers are willing to shake hands and say yes. Overall, it makes sense, and we Accept what you're asking, if you don't. Very helpful. Thank you. So thank you very much for all your questions. We now with that, we now conclude our PSS business update call. Thank you much for your participation and goodbye. Thank you. Bye bye. That concludes today's conference call. Thank you everyone for joining us. You may now disconnect.