Thank you very much. Good day everyone who's dialed in. I would like to welcome you to our conference call on the results of the first quarter of fiscal 2022. Participating at this conference are all members of the executive board of Infineon, the CEO, Dr. Reinhard Ploss, Helmut Gassel, Chief Marketing Officer, Jochen Hanebeck, Chief Operations Officer, Constanze Hufenbecher, Chief Digital Transformation Officer, and Sven Schneider, Chief Financial Officer. Dear listeners, as usual, Mr. Ploss will start by giving you an overview of the business performance, after which all five members of the executive board will be happy to answer any questions you may have. I hand the floor to Mr. Ploss.
Thank you, Mr. Foltin. Good morning. Welcome, listeners. Infineon has had a successful start to fiscal 2022. We were able to increase our revenue and segment results compared to the record by just the previous quarter considerably. Electrification, digitalization are ensuring that we have continued strong growth in our target markets. In many markets, the availability of semiconductors remains a critical factor. Additional manufacturing capacities are being created, but the lasting economic and structural demand for semiconductors remains higher than the supply. Inventory reaches are increasing in some areas, but they remain below the long-term average. Of course, dynamism in the various partial markets varies. In some, supply and demand will reach a balance earlier than in others. For our target applications, automotive industry, data centers, Internet of Things and other sectors, we expect that this will not happen in the near future.
Delivery restrictions predicted by contract manufacturers will remain well into 2022. In an environment like this, any factors that lead to disruption delivery are felt particularly strongly. We're particularly happy that the December quarter has been the first one for many years, for a long time, since we did not have any such disturbances. That one of the figures in the first quarter reflects this. It shows that Infineon achieved revenue of EUR 3.159 billion, which is an increase of 5% compared to the previous quarter. Compared to the same quarter the previous year, it's actually up by 20%. A stronger US dollar has supported the growth. To put it into perspective, Infineon's benefiting from a stronger US dollar because about two-thirds of our group revenue has been achieved in that currency since the Cypress acquisition.
Assume a constant exchange rate for the US dollar to euro, growth would have been 3% compared to the previous quarter. With the increased revenue, the segment result also improved. It reached EUR 717 million, which corresponds to a segment result margin of 22.7%, following 20.5% in the previous quarter. All four divisions were able to improve their profitability. There are two factors which were decisive for this development. First of all, good product mixture in a favorable price environment in general. Secondly, as I've mentioned, the fact that there were no supply interruptions. Our manufacturing is continuing at full capacity. We're taking the maximum COVID-19 precautionary measures, but of course we can't rule out risks completely. The short-term indicators show that positive dynamism in our key markets has remained intact. New orders remain considerably higher than cancellations.
So far, at this point, we have regularly reported our book-to-bill ratio. That's the ratio between confirmed new orders and revenue at the end of any quarter. From now on, we're not going to do that any longer. The performance indicator's lost a lot of its meaning in recent times because orders are confirmed flexibly in times of allocation. A more meaningful indicator is the order book or the order backlog. This is the total of confirmed or unconfirmed orders, which at the end of the December quarter amounted to about EUR 31 billion, which is a further growth by around EUR 2 billion compared to the September quarter. To put it in other words, our nominal order books corresponds to the revenue volume of more than two fiscal years.
Of course, it can be assumed that some of this is due to bottlenecks because of the business development and, customers ordering as a precaution. The number's likely to decline in the next few quarters, though demand will remain high. We expect that it will remain healthy for the near future, and our capacities for 2020 are fully booked. Free cash flow in the first quarter was EUR 378 million, which is the same as in the previous quarter. Now, the results of the four business sectors. The automotive division achieved revenue of EUR 1.39 billion in the first quarter, which is up by almost 10% compared to the previous quarter.
In addition to positive currency effects, this development's supported by the fact that unlike in the past quarters, there were no disruptions in supply. With the growth in revenue, the segment result also rose. It reached EUR 261 million, and the segment result margin climbed to 18.8%, having been 16.7% in the previous quarter. If we look at the automotive market as a whole, the imbalance between supply and demand remains great. That is shown by the following figures: global car production in 2021 was 76.4 million units, which is only slightly higher than the level of 2020. The analysts at IHS Markit think that because of bottlenecks with semiconductors and other components and different problems in the supply chain, about 10 million cars were not built. The following interaction is also important here.
The shortage of semiconductors means that the car manufacturers prefer to use the chips available to them in higher value cars. As a rule, they need more semiconductors than vehicles in the compact class, such as advanced driver assistance systems. This prioritization will have a further effect of holding back the total number of new vehicles. For 2022, a gradual reduction in the bottlenecks is expected, which IHS has forecast for this year, namely 82.9 million vehicles, but that would still be well below the production level for 2018 and 2019. These supply bottlenecks are therefore far from over and will continue well into 2022. Inventories are likely to remain limited. They're gradually being filled up, but a normalization cannot be expected until 2023. In a generally tense automotive market, electromobility remains on a good path.
In 2021, about 6.7 million battery-driven electric and plug-in hybrid vehicles were sold. That is double the number within a year, and it's particularly encouraging from the point of Infineon that almost half these vehicles are equipped with our power electronics. With its portfolio of silicon and silicon carbide solutions, which lead the market, Infineon is providing central components for electromobility. By the way, December was the first month in which more battery-driven electric vehicles were sold in Europe than diesel cars. The car of the future will be not just clean, but also autonomous, completely connected, and cyber secure. At the Consumer Electronics Show, CES, at the beginning of January, we presented the next generation of our successful AURIX microcontrollers. With these, we are providing car manufacturers with another important component for electromobility, and it will support advanced driver assistance systems and new system architectures.
The new AURIX generation is even better equipped for the requirements of connected, smart, and electric cars. It offers more compute power, meets the new cyber over-the-air functions which satisfy the requirements of the manufacturers, and supports the latest safety and security standards and applications using artificial intelligence. The scalable concept of the AURIX family makes new electric and electronic architectures possible and a common software architecture. In the development of a platform, manufacturers can make considerable savings, and we expect that revenue with our AURIX microcontrollers will grow considerably in the next few years. Now to Industrial Power Control. This division achieved revenue of EUR 382 million in the first quarter. That is a decline by about 6% compared to the previous quarter.
The demand in the fields of industrial drives, renewable energy, and household appliances was somewhat weaker than in the previous quarter, which is normal for this season. A positive exception for this development was in the field of energy infrastructure, including energy storage and charging stations for electric vehicles. The segment result improved slightly to EUR 73 million, and the segment result margin was 19.1%, following 17.7% in the previous quarter. The effects of the reduction in revenue were balanced out by positive effects of the product mixture and the removal of costs resulting from delivery interruptions. The prospects for IPC are positive. New orders are strong. The market prospects are good for many final applications, and many of our products remain in allocation.
After a strong increase in sales figures following the pent-up demand, the mature markets for domestic appliances and industrial drives are returning to the long-term average growth rates. Structural drivers in fields such as solar energy remain effective, though imbalances in the supply chain are limiting short-term growth. Our energy efficiency solutions based on silicon and silicon carbide are the decisive components for implementing the energy turnaround. Let's turn to the segment of Power and Sensor Systems. This followed on from the strong development of the previous quarter. Revenue was EUR 955 million, which is about 1% higher. While the demand for components for smartphones declined for seasonal reasons, the demand for power semiconductors in all sectors remained high. From components for battery-driven appliances to power supplies for servers. The segment result was EUR 285 million.
The segment result margin was at 29.8%, and in the previous quarter, it had been 29.2%. The demand remains very robust in most applications, and customer orders exceed delivery possibilities by far. About half our products remain in allocation, and inventories in the distribution channels are very small. The picture is likely to remain the same until well into this year, and there are many trends to support this. We see lasting demand by cloud operators and hyperscalers, which is driving the demand for power supplies for servers. Then there's increasing IT expenditure by companies as people return to their jobs in offices and are replacing older computers by newer equipment. The 5G standard is also ensuring that there is lasting demand for semiconductors and smartphones. Expenditure for telecommunication infrastructure is also increasing.
There is the wish to make the interaction between man and machine more intuitive. This is driving demand for sensor solutions by Infineon. Recently, we launched a new generation of our CAPSENSE technology. The technology makes it possible to have advanced solutions such as proximity sensors and an improved detection range. It's intended for use both in domestic appliances and also for industrial and IoT products, and helps to make user interfaces even more intuitive. Its great reliability can be demonstrated by components in particularly challenging environments. At the end of December, the James Webb Space Telescope was launched, and Infineon's power electronics was on board. Our radiation resistant and long-lived components are critical to success for operating a telescope about 1 million miles away from the Earth.
The first flagship project of NASA, the Hubble Space Telescope, was launched in 1990 with radiation resistant power electronics from Infineon. We're glad that the current mission is also turning to our company for support. The first images from the telescope were announced for this summer by NASA. Now, the Connected Secure Systems segment. The division achieved revenue of EUR 427 million, which is a considerable increase, namely 11% compared to the previous quarter. The main reasons were a good product and customer mixture, a strong US dollar, and a slight improvement in the provision of microcontrollers and Wi-Fi products by our contract manufacturers. These factors also led to a considerable increase in the profitability of the division. The segment result was EUR 100 million.
That corresponds to a segment result margin of 23.4%, following 15.5% in the previous quarter. We shall continue to invest in research and development in order to strengthen our product roadmap even further. Demand remains very robust in virtually all fields of application, far exceeds the available supply, especially that from contract manufacturers, and therefore the revenue potential is limited. In the meantime, with our connectivity solutions, we're seeing a lasting dynamism. Our Wi-Fi chipsets have been selected for an automotive entertainment system for the next generation, and also by a leading manufacturer of smart home thermostats. Connectivity is a key element of digitalization. At Infineon, we are expanding our position in this sector with our AIROC product family.
With the seamless integration of different technologies for wireless connections such as Wi-Fi and Bluetooth, Infineon is enabling easy to operate, interoperable solutions for consumers, industrial, medical, automotive, and other applications. Our AIROC products use a common software frame for different platforms such as Android or Linux. That makes it easier for product developers to do their work. They can make their product solutions more quickly and get them ready for the market at lower cost. Three examples from recent times. With our cloud connectivity managed solution, we can enable developers to make IoT devices connectable via Amazon Web Services simply and safely. It's possible to have a broad technical knowledge in the field of Wi-Fi or cloud configurations. Plug-and-play, simple and quickly, which makes it possible for developers to concentrate on their core competencies to design new and innovative projects.
Secondly, for applications in the smart home, Bluetooth and low energy solutions are being introduced. The standard is now Matter, which has a completely interoperable smart home ecosystem with dependable and secure connection of devices, which enables seamless interoperability and encrypted communication between different devices in a Matter network. Thirdly, our electricity saving Wi-Fi chipsets are also suitable for precise and energy efficient tracking solutions. In the development, we are cooperating with the Israeli location as a service company, Deeyook, which has highly precise innovative algorithms for tracking solutions. You can see, listeners, that our innovation pipeline around the Internet of Things is well filled. Which brings me to the outlook. Infineon's market environment remains characterized by a shortage of supply and strong demand. Capacities are being expanded step by step, which will lead to an increase in inventories from a very low level.
A complete refilling of the inventories cannot be foreseen yet. Rather, in most product categories in the final markets, everything that we supply to our customers is immediately put into the final product and sold. Our business prospects are determined primarily by the supply side, and thus, to what extent we can expand capacities, both our own and those of our contract manufacturers. In the current second quarter of fiscal 2022, we are expecting revenue of about EUR 3.2 billion. In our forecast, we are adapting the expected exchange rate of the US dollar to euro from a ratio of 1:1.2 to now 1:1.15. Regarding profitability, the second quarter generally marks the lowest point within our fiscal year.
That is due to the usual reevaluation of inventories in that period and the price reductions negotiated with customers at the change of the year. In the present strong market environment, we do not expect such a decline this year, however. Rather, we expect a segment result margin of about 22%. For the entire fiscal 2022, we are increasing our revenue guidance, taking into account the stronger dollar from EUR 12.7 billion to EUR 13 billion, ±EUR 500 million. In the middle of the range, this would mean growth of 17.5% compared to the previous year. We expect that we shall benefit from the structural growth opportunities and expansion of our own manufacturing capacities. Our outlook presupposes there were no major interruptions in supply chain or new bottlenecks.
At present, it looks good, but as the COVID-19 figures continue to rise and the Omicron virus variant continues to spread, uncertainty remains. With that reservation, we are generally confident regarding the development of our profitability. We're increasing our guidance for the segment result margin from 21% to about 22% in the middle of the revenue range. For fiscal 2022, we are still planning investments in tangible and intangible assets, including capitalized development costs of about EUR 2.4 billion. Major projects are the expansion of the 300mm production at the sites in Dresden and Villach, and the expansion of our manufacturing capacities for products based on a compound semiconductor in Villach and in Kulim in Malaysia. For the free cash flow, we expect a level of about EUR 1 billion.
All in all, Infineon is in a good position to continue the successful path in 2022 and to grow profitably. Ladies and gentlemen, that brings me to the end of my remarks, but before we come to the question and answer session, a short personal remark. As you already know, I shall be handing over the tasks of the Chief Executive Officer to my successor, Jochen Hanebeck, at the end of March. It's still a few weeks until then, and with some of you, I'm sure I shall have a chance for a personal exchange in that time. This press conference is the last one in which I shall be presenting CEO’s quarterly figures. The first one was about 10 years ago.
I have always enjoyed the exchange with you and your colleagues in this round, and I thank you for your interest in the development of Infineon, your critical but always fair questions, and the many years that you have spent reporting on our company. Together with Helmut Gassel, Jochen Hanebeck, Constanze Hufenbecher, and Sven Schneider, I'll be pleased to take your questions again.
Thank you. Ladies and gentlemen, if you'd like to ask a question, please press the star key and number one on your keypad. Please ensure that your mute button is deactivated so that your signal can reach our system. Should you find that your question has already been answered, you can simply withdraw it by pressing star two on your keypad. As a brief reminder, press star one to ask a question. We're going to wait for a moment in order to give all participants the opportunity to indicate whether they would like to ask a question. Our first question comes from Joachim Hofer from Handelsblatt. Please go ahead, sir.
Good day, everyone. I have three questions. The first one relates to investments. You spoke about EUR 2.4 billion, although revenue is rising much more strongly. Is there a reason for this? Do you see a reason for not investing more? The second question is directed to the coronavirus. If I've understood you correctly, you said that essentially it's all under control. Are there any further challenges posed by the pandemic? The third question is China is an important market. It is isolating itself increasingly. Can you tell us what that means for your company? Thank you very much.
Thank you, Mr. Hofer. I would like to pass the first two questions to Jochen Hanebeck. I will answer the last question myself.
Thank you, Reinhard. Mr. Hofer, investments in November were stated as being in the amount of EUR 2.4 billion. As happens so often, given the ramp-up times, the cumulative revenue effects will be seen next year. The next question is, could we do more? Well, first of all, we're limited by the supply times of equipment. We would obviously seize any opportunities that we had if they cropped up, but the market is very tight right now. With respect to your second question, what I have to say is this: COVID risks, yes, indeed, we have identified some, and in our forecast, we have factored in certain risks which haven't materialized yet, but which can easily be envisaged. If you just think of the situation in China, you'll appreciate that we have some contract manufacturers and our own plant in Wuxi.
If the Chinese government, in line with their zero COVID strategy, were to implement more lockdowns, that would definitely have some ramifications for us. There are also further possibilities, such as the Texas winter storm, which we experienced last year, which haven't been factored in, however. At present, I think it's safe to say that COVID isn't a big factor for our factories. Some of our colleagues are infected, but as far as deliveries are concerned, it's not going to affect them. However, we shall wait and see how things pan out in the next couple of months and hope that everything materializes as positively as we are hoping for.
Thank you, Jochen. A brief reminder. It is clear that we are reporting on capital expenditure as things are delivered to us. In exceptional cases, like in Villach, we report on projects running for several years. It's clear that given the corresponding delivery times, the figure results from them. Now, a question with respect to China you had. Mr. Hofer, I cannot really answer it comprehensively. I would recommend that my other colleagues chime in if necessary, Constanze Hufenbecher and Helmut Gassel, because we see that in the summer, absolutely, via the digital channels through the new concepts available on the Internet, we have the possibility to establish a very good connection to our customers. Through design wins and design in potential, we have the potential to develop our business very well. Isolations due to travel restrictions and COVID present to us a moderate or small problem.
We actually assume that given the new ways to interact that are available to us, we will be able to have a higher level of technical support, and that will have a positive effect on us. Especially with respect to turnkey solutions and software, this will become even more relevant in the future, and I recommend that you take a separate look at that in the future. The acquisition of Cypress has added a significant field of competency to the group. Digital customer support and software is all part of that. So we don't see that much risk given that situation. But you mustn't forget that at Infineon, revenue comes from products manufactured in China, but they're not developed there. So we believe, at least as far as COVID is concerned and the lockdowns are concerned, we are not adversely impacted.
Wonderful. Thank you very much. This brings us to a question from Yann Schreiber from AFP News Agency. Please go ahead.
Hello, and thank you for allowing me to ask a question. Recently, there was no answer from the government with respect to the acquisition in the wafer sector. I think the company was called Siltronic. Could you perhaps give us some information on that? In general, I wanted to know whether you were afraid of mergers and acquisitions in your sectors becoming less easy to implement because governments are taking a closer look at chips and wafers increasingly and are applying nationalistic protectionist approaches.
Thank you, Mr. Schreiber, for your question. I would like to give you a brief answer, after which I'll hand over to Helmut, because he is responsible for our overall M&A strategy. In general, this isn't to be expected. We see a very strong focus on semiconductors. Now will M&As be negatively impacted? No, I don't think that we're afraid of that. It's a simple fact of life. We view very positively the fact that we were able to implement the acquisition of Cypress at the time. If you look at the framework conditions overall throughout the world, they've become much less favorable. Helmut, would you like to add anything?
Yes, gladly. On a global scale, the intensity at which M&A activities have been inspected is increasing. This prolongs the duration of such approvals and permits, which means that for all parties involved, there is much more uncertainty, so that is a disadvantage. On top of that, there are increasing numbers of criteria that are tightened, which determine which acquisitions have to be inspected. They actually are going quite far down. Even when looking at rather small M&As, governments reserve the right to inspect them and investigate them.
On top of that, the number of criteria for not granting permission to an acquisition is rising substantially. As Reinhard just said, it has become much more difficult, therefore, in the semiconductor industry. Nevertheless, this activity is going to go on, and of course, approvals will continue to be granted, and we remain active in this area. Of course, the framework conditions make it much more difficult.
Reinhard Ploss speaking now. Generally speaking, the full integration of Cypress is what we're focusing on. Of course, this doesn't affect the minor issues that we have with that.
This brings us to a question from Stefan Kroneck from Börsen-Zeitung.
Hello. I have a question with respect to your outlook. You increased all of the major key figures in your outlook, earnings, the result, and the margin w ith respect to free cash flow of EUR 1 billion, you have remained flat. Why, if I may ask? What are the reasons for this?
Thank you. Hello, Mr. Kroneck. Sven Schneider speaking. I'd be glad to answer your question. From a purely arithmetic point of view, you're absolutely right. If you push up revenue to EUR 2 billion and push up earnings, it should have a slight improving effect on free cash flow. There are two reasons why we didn't do this. We have a range in front of the figures, and I think that that would cover slightly higher values as well. Secondly, in terms of substance, in order to secure the supply side, especially with external partners, here and there, we are in talks where we are asked to make advanced payments to participate in investments.
Since this risk exists, since we are exposed to this risk and accept it in order to secure future growth, this would weigh on free cash flow. This is why we have introduced a small risk position.
Oh, I see. So you mean the supply chains, the suppliers, then?
Yes, that's correct.
Okay. Thank you.
You're welcome.
Our next question comes from Christiaan Hetzner from Fortune. Please go ahead, sir.
Good morning, and thank you. I have a couple of questions myself. First of all, you spoke of inventories which are gradually improving. Now, recently, the U.S. Department of Commerce published a report which drew quite a lot of attention. They spoke of four-five days in terms of inventories, as opposed to 40 in the past. Could you perhaps give us your take on this?
There's another important issue in the U.S.A, the CHIPS Act. You say that 2/3 of your revenue is generated in dollars. I know that not everything comes from the United States now, but could you give us a brief rundown on the difficulties that you have identified in the procedure in the House in the United States? In the analyst call, you said that there were bottlenecks in machine and production equipment for chips. Is this first and foremost in relation to power electronics? If not, what material are you missing in particular?
Well, that's a lot of questions, but let's start by addressing the inventories. We have seen a certain increase, but the inventories are extremely low. You have to make a difference between the types of inventories. Mr. Gassel will say something about this in a couple of minutes. Equipment will be addressed by Jochen Hanebeck, and at the end, I will say something with respect to the chips.
Okay, I'm going to speak about inventories. We have the highest visibility with our distribution partners. In that area, we have a range which is inventories divided by weeks of just over seven weeks. This is 20%-25% lower than the target inventory figure, and it is definitely at the limit of what is manageable from an operational point of view. For our customers, our direct customers that is, visibility isn't so good. There, too, we know as a result of many escalations that there are not many significant inventories. My colleagues just spoke of several improvements. It relates to just a handful of areas amongst which you can find consumer electronics. Overall, the reach of inventories is far below the target.
Now, with respect to your question relating to equipment, this is Jochen Hanebeck speaking. Our investment budget is primarily oriented towards the plants and buildings of EUR 1.5 billion and which has been increased, and we tend to completely make use of this budget. However, these are plants that with respect to lead times, among other things, where the lead times are becoming longer. You have asked whether this can be traced back to a specific technology. The answer here is no. It runs across the board, Europeans, Americans, and Japanese. We are doing our best to make sure that the allocation for our customers is managed as quickly as possible. At present, we actually see the tendency to certain machine lead times increasing, in fact. On top of that, with respect to materials, there are some that have longer delivery times.
Maybe I can add on to what was just said about inventories, Mr. Ploss speaking now. We can see that there is a series of individual products, which live hand to mouth, where they're delivered by airplane or helicopter, and they determine the entire production volume, which here and there results in a higher inventory. Now, we have been successful to a certain degree in optimizing this balance, and this has enabled a number of additional cars to be built. With respect to chip cycles, now, we mustn't forget that the semiconductor industry is a factor, the factor of 50 to 10,000 in the value chain across all stages.
GDP here significantly depends on a number of different factors, and it goes without saying that it's quite obvious that governments are taking steps to provide support in parallel for the consequences of the geopolitical situation, where we've seen a great concentration of production sites across the world dealing with this. At the same time, of course, the semiconductor industry is quite a strongly differentiating factor. We have so much functionality that's been integrated into these chips that we have a huge basis of know-how. This is a further reason why in the larger regions, be it China, the United States or Europe, we have thought about this and thought about coming up with ways to strengthen this industry, and we have a mixed look on this.
I prefer to say that the industry solves its problems themselves. Since some players have already started, China has already invested quite a lot of money, for example, the situation is distorted to a very strong degree, and therefore it does make sense to take a certain portion of the imbalance and compensate for it. We also know that Europe has fallen behind in the digital realm and that we have to do more, so it's only logical that we support this.
You don't see any difficulties in the approval processes in the House in the United States?
Well, of course, we are realizing that it's taking much longer than we thought. As is the case with a lot of political processes, there is a series of issues that play a role in the package. This, of course, triggers debates and discussions here and there. We would have hoped for the process to proceed faster with respect to contract manufacturing in the United States and other activities, but quite apparently, this is the speed that results from policymakers.
Thank you very much. Oh, one more thing, Mr. Ploss still speaking. Infineon does not have a manufacturing strategy that is based on subsidies. We do what we think is right as a matter of principle. Subsidies support, especially in research and development, serve the purpose of increasing speed. This is why I would say that, as I mentioned earlier, we made a decision for Villach and other sites, and we will continue to implement our strategy. Thank you once again.
Once again, as a reminder, if you'd like to ask a question, please press star one on your keypad. Our next question comes from Adolf Winkler, Kleine Zeitung. Please go ahead.
Hello. Good day, everyone. Hello, Mr. Ploss. My question for you is, what about the turnaround in the energy transition? Nuclear energy is supposed to be classified as a green energy in the European Union. What does that mean for Infineon? One remark, because you reminded us that you are going to bid us farewell soon. I also look back with great pleasure over the last 10 years, and I would like to thank you very much for our work together in this space of time.
Thank you. I think if we look back to Villach, we're talking about 20 and even 25 years of shared history. I'm so happy that the site has developed so well. Looking at everything that's been built there, the team at Villach is doing such a wonderful job. This does play a role because it is one factor that drives our decisions with respect to how to continue to progress at that location. The political framework and the general environment are very favorable. Now, moving back to the energy transition, we are basically observers, and we see two challenges in this area. One, of course, for us as a company, where uninterrupted power supply is essential to our business. Today, we don't see how renewable energy can foot the entire bill.
This is why we expect policymakers to develop concepts that provide a safeguard here. At the same time, be this electric or gas, at any rate, the world is going to become electric. From gas and nuclear power, you generate electricity at the end of the day. Therefore, as far as we're concerned, if you look at the continued business trend, this is not going to have a major impact on us. Therefore, we are quite optimistic that we will make progress. Electric energy is the highest value energy that we have. It can be converted into heat and movement and light. It's extremely efficient, and therefore, we do assume that the expansion of renewable energy will continue unfettered in parallel to these measures.
A final comment as well. It's a pity that I didn't make it to Villach to say goodbye, but COVID was against us, I'm afraid.
Our next question comes from Christiaan Hetzner from Fortune.
I just have two short questions if no one else wants to say anything. It's a question of automotive chips. Could you briefly say what the stagnation in the number of vehicles sold? What's encouraging is that about half of them are equipped with power electronics chips from Infineon. Is that a market share that you will be able to defend in the medium-term? It appears pretty high. Secondly, regarding microcontrollers, you said that demand and revenue for AURIX could grow considerably in the next few years. Could you give us an indication of how big the business with AURIX will be in your automotive business?
Yes, thank you for that question. Some of it will be answered by Mr. Gassel. We've always said that regarding the target market share for electromobility, because of our initial position, we have a strong market position that we haven't put into our planning. We're not planning to remain on this level, but we expect a balanced position which specifically will support profitable growth. We are managing the company not according to the maximum, but according to profitable growth. We expect we will remain in a strong position. The volume in the future, we think, will be quite pronounced. We're expecting a greater balance between the different applications and other things so that we have a balanced revenue. With AURIX and the rest, I hand over to Helmut.
There's one thing to begin with. Market share is the result of good activities on the market and not a target figure that we aim for. We're very successful with our products in the field of electromobility, and we still are. That has led to this market share. It's very encouraging. Electromobility altogether has given us so much dynamism, and that is being maintained. For the foreseeable future, we will still have a considerable share. The new participants in the market are joining us, and we are in friendly competition with them. Regarding AURIX, about 25% of the automotive business as of today is in the field of microcontrollers. It's not just AURIX products, of course, but since Cypress has been joined to the portfolio via products which are very successful and others.
This share in the automotive business will remain approximately the same, but it also means that looking forward, we shall grow stronger with AURIX than the market, and in automotive in general, we'll grow much stronger than the market. If I can add something. The subject of AURIX is a success story based extremely on the fact that we succeeded in a very early phase of development to join in assisted driving and to develop products which have extremely good reliability and dependability. This has grown, and this has given AURIX a huge lead regarding dependability in terms of safety and assisted driving. We are coming very much from the subject of controlling combustion engines, and it's a growing new application that's coming into it here. I recall that a large share of foundries are involved in this microcontroller business. Jochen Hanebeck says more than 90%.
That's an estimate. That's probably about right.
It is very high. Microcontrollers, about 90%.
Good. Thank you. We now come to a question from Ilona Wissenbach, from Reuters.
Good morning. Thank you. Since I'm standing in, I'd like to put things into perspective of the impressive figures of the order books and the EUR 31 billion, EUR 3.1 billion sales. When it comes to the revenue prospects, I know that not all the orders will be realized, but can you tell us whether the order books are likely to be expanded because of the delivery problems, or should it be interpreted as meaning that your revenue forecast is very cautious?
If everything that is ordered could be manufactured and supplied, we'd have different guidance, then we'd have different order books as well. Helmut Gassel will go into more detail on that in a minute. Our order backlog is affected by many factors. What we always see when the economic cycle changes or begins to improve or decline, there will automatically be a change in order books because the customers order in advance. There are some additional orders we find that we refer to as double ordering, which will probably never be implemented. At the latest, when we communicate shorter delivery times, the order books will decline substantially, without that actually giving any indication of revenue. Helmut, what's it look like?
Well, some additional information on the current order books. The first thing is it consists of confirmed orders. Those are the orders that we have confirmed and unconfirmed orders. The total is a range or a future fulfillment of 80%, where the wishes within the next 12 months. We can't do that, however, we just don't have the capacity for that. You can see that the order books figures cannot be used to derive the revenue directly. One thing is correct, the order books in the last twelve months have increased by a factor of more than 2.3. In the last twelve months, we have received far more orders than we can deliver in the next twelve months. The greatest share, a bit over 50% of the present order backlog, is due to automotive. It's slightly overrepresented relative to the revenue ratio.
As Mr. Ploss just said, we expect that if the lead times become shortened, some of the backlog, some of the orders are canceled, then we shall make a reduction ourselves. If order books have risen in the last twelve months compared to the previous quarter, it has been, not such a strong increase by any means. You can see we're slowing down from a very high level, and it will depend on when the ability of the industry to deliver increases, then the mountain will melt somewhat.
Another comment, Mr. Wissenbach. We expect that a great deal of the demand is based on the order volume. If the ability to deliver increases, this will not disappear. The demand will simply be served at a later stage. There's a pent-up demand in the car sector, renewable energies, that will be distributed differently. Of course, in the verticals where the customer says, "Okay, then I won't buy it. I won't buy tomorrow either. I'll spend the money somewhere else." We have a very stable demand situation that will simply be moved forward rather than disappearing completely.
Thank you.
We now have a question from the English conference. Please ask your question in English. The question comes from Jennifer Wein, Bloomberg News.
Hello. Can I clarify two things? First, I believe you said in your opening remarks that the December quarter was the first for a long time, when you did not have supply disruptions. Can you provide a bit more color on that? Clarify, for example, are you talking, is this the first time since the pandemic started? And furthermore, why was there no issue? And the second question concerns a follow-up with the official approach to this chip shortage. If you could say if you've got anything specific you'd like to see out of the European Union's approach to the industry with the Chips Act. That would be quite useful to comment if you think they're taking the right approach. Thank you.
Yeah. Vielen Dank, Jennifer. Thank you, Jennifer. In the first part of your question, Jochen will answer it, and Jochen, you have the floor.
Thank you. Right. Regarding the supply chain, supply chain interruptions, here we thought that the events which affected us in 2021, beginning with the Texas winter storm and then the COVID situation, especially in Southeast Asia, then also a long power cut in Dresden. All these three events were atypical, and that is why we said that in the fourth quarter of the calendar, the first fiscal quarter in the new fiscal year, we have been spared such major events. But once again, these were very unusual events that we didn't have in earlier years. Another question on the CHIPS and Science Act. You have to wear different spectacles here.
On the one hand, we can see an increase in digital competence in Europe, and we consider that to be right and necessary, and the CHIPS Act will make a contribution to that. We also see a greater potential that is being established and expanded in Europe. Of course, the CHIPS Act will also have a certain compensating effect for the semiconductor industry. It is one of the industries with the products which are most in demand, which comes from the fact that this product is fitted everywhere and has great relevance. The dependence of the entire industry on semiconductors is great. If it's understandable that on the global level, some governments are actively supporting their semiconductor industries. Europe will have to take a step.
Many of our industries, primarily automotive, but also industry in general, and many others such as energy and medicine, are dependent on this and it's necessary to secure the know-how. For those who are not so familiar with what we do with semiconductors, a modern semiconductor, and it's going on further and further, integrates a huge number of functions that a device needs. Therefore, it is necessary for the further development of know-how that we should have access to semiconductor technology. It is right that the CHIPS Act looks at the whole of the value added chain and is trying to strengthen strengths from developing products to manufacturing them and to the delivery of key material equipment. We are very confident that we'll get a decision soon and that further development will occur.
I said just now, in general, we are seeing more support as a major factor that will influence our strategy.
Ladies and gentlemen, this brings today's Q&A session to an end. I would now like to hand the floor back to Reinhard Ploss for his concluding remarks. Thank you. We have no more requests for the floor, and therefore, thank you for the many questions and for taking part. With that, I also close the question- and- answer session. Now I hand back to Mr. Ploss for his final statement.
Thank you, Mr. Foltin. Listeners, with more than EUR 3.1 billion revenue and a segment result margin of 22.7%, Infineon has succeeded in having a good start to fiscal 2022. In the relevant fields of application for Infineon, dynamism remains good, and in view of this, we continue to expect a strong fiscal 2022. We have increased our guidance in order to take into account of the strong US dollar. Our structural growth drivers remain effective, and that is unchanged. Semiconductors are needed everywhere.
Infineon is in ideal position to serve the most important trends of our age, electrification and digitalization, and we can benefit from that. Thank you for your interest. I wish you all the best. Stay healthy, and goodbye.