Infineon Technologies AG (IFX) Earnings Call Transcript & Summary

[Presentation]

So welcome, ladies and gentlemen, to our virtual booth tour. My name is Alexander Groschke. I'm from the IR team. And with me is our expert of today, Markus Hermwille, who will walk you through our booth. The tour is scheduled for about 30 minutes, but there is some leeway for an overrun in case there's a lively discussion. You may ask a question anytime, but please use the chat function because it's a rather large group, and then I read it out. Okay. Markus, over to you.

Yes. Thank you, Alexander. So once again, my name is Markus Hermwille, and I'm working with division IPC heading the [indiscernible] application, marketing and management and focusing industrial application. So I think in the nice video from our IPC SMD head, you heard something about your efficiency and looking to our virtual booth, I would like to guide you a little bit to the energy, flows, energy supply chain. And when we talk about energy, we would like to start with yes, making green energy happen and therefore, we'll have a closer look on the topic of making green energy. I think you heard now in a lot of calls about the topic of global warming, and that you have the idea that it's important to, yes, support the topic of, yes, limits of global warming. And we have seen that the global net human cost, emission of CO2, they need to fall by about 45% from, let's say, a level we have seen from 2010. And we have to reach this target by 2030. So it's over about, let's say, the way to net zero. When we go now to virtual booth, we will follow what I said, see, the energy chain of generation. We will look on solar. I will talk also about the topic of energy storage. And then we go to the topic of industrial application, then we look to self-drive robotics, we also look to big area of e-mobility, electrical cars and topic of charging cars, but we also look to the topic of major [indiscernible] lines. Before starting going into this innovation in solar, where we would highlight what product and technology we are showing today at the PCIM, I would also to speak about the topic when it is storage. And storage is for -- from our opinion and from our positioning and so-called adjacent application closely connected to solar and wind. And what I would like to highlight, not just only that it's about many products, especially power semiconductors from CoolSiC to CoolMOS, IGBTs and different kind of packaging, I would also to highlight what is, let's say, the benefit of using CoolSiC in terms of your supporting the field of energy losses and leading to some extra energy. So for example, when we look to energy storage with CoolSiC, overall losses can be reduced by 50%. That means with the same kind of installation battery, there's a good opportunity to form much more, let's say, energy coming from the same battery size. And this could lead to about 2% extra energy without increasing the battery size. Now let's go on, on the journey. Now we go to solar. Before jumping into solar, where we do the highlight now on the products, we have [indiscernible] central inverter. I would also spend a few words about also, again, about CoolSiC or the so-called string inverter. So string inverter is one of the biggest, let's say, application fields in the topic of solar. And also there is an interesting number to see with this CoolSiC, for example, the power density can be increased. And that means state-of-the-art 50-kilowatt string inverter can be empowered up to 125 kV using silicon carbide. And the nice thing is even there is an increase by a factor of 2.5, the overall size and also weight of the string inverter is not changed. So it's really about power density. But now let's have a look to another sub application in solar. It's about central inverter. Central inverter converts the power on multiple strengths of connected solar panels. They are typically rated from around 600 kilowatt to roughly 3,000 kilowatt. And the center inverters typically rely on a single-stage power conversion and the majority of inverter designs are transformer-based or isolated. What we are now showing at this PCIM especially is a new technology generation based in a well-known package. It's so-called 2.3 kV PrimePACK 3, focusing on central inverters. The major question is why we have now developed and why we are showing this product. Well, we are looking on the topic of understanding the system. So from product to system understanding is our, let's say, philosophy. And what we have looked on is to develop this new power module, and we were inspired by the desire to help manufacturers to reduce system costs. So it was about looking then in the technical thing but on the one-hand side, we use a package, which is very known in the market, the PrimePACK one. Of course, we have to look on the efficiency. And we looked on it what are, let's say, the new topologies, which are used in the so-called central inverter. And here, we see the trend is coming on to 2 level and up to 3 level topologies. So it was all about understanding, let's say, requirements in the application. Let's have a look what is then the benefit in using now this new kind of technology. I would not go into detail about all these multilevel topologies, but we would like to point out that considering that this application, multi-level topologies are used, and we are now offering a new configuration in the well-known PrimePACK, so here, the total system power can be increased by 33%. And there are 2 approaches enabling this. On the one hand side, yes, offering something for this new multilevel topology, on the other side, we are also introducing a new chip generation. And this is so-called IGBT 7. It's a blocking voltage about 2.3 kV. And by this really enabling, let's say, increased power. And yes, the number seems not to be high, but the overall inverter efficiency can be increased by 0.4%, which is looking where we are at the moment, will be huge jump also for the solar central inverter. So then let's have a closer look to another application. Well, let's take the journey, and now we have produced energy. And now the next question is, "What are examples in order to use that energy? " And here, I would like to go now to the topic of electrical cars. Let's have a look to solution and use what we're offering for the so-called e-mobility or the main [indiscernible] inverter.

So just -- sorry to interrupt you. So if anyone of you have any questions, please put it on the chat, and we can answer it right on, on the application shown.

So when we look to electrical car, the traction inverter has multiple jobs to do. Of course, the most obvious one is driving the car. But when we look on it, there are a lot of other, let's say, electronic components where electricity is also needed. And I think what is also worth to mention is also the benefit of using CoolSiC, for example, also in the elective drivetrain. And the efficiency increased by using silicon carbide is about 5% to 10%. Overall, when you compare with IGBTs and we looked on the topic of increasing the driving distance, so this can be then increased by roughly 7%. So in a nutshell, it means by using the same kind of battery size and changing in the main drive from IGBT to silicon carbide. That means overall increase the overall maximum distance by 7% using silicon carbide technology. We talked a lot about power. So it is used in the main drive via the power module for in terms of HybridPACK but that's not all about. I mentioned that we are looking from product to system understanding. And for us, it's important that we show and support and look what is the total offering. So when you look to all our systems, you find then an offering not only for the power part, but also for the gate driver, also on the controller for this inverter, but also looking on sensors, for example, our carbon sensors and also positioning sensors. So we looked on it and then we showed also on this exhibition, not only power part, but also, let's say, all the solution offering to build a complete system by using Infineon total solution offering. Now we saw a little bit about the electrical car. A very important topic is, of course, yes, to charge the car. So when you look to all these kind of news in the magazine, we read a lot about the installation of chargers. First of all, let's have a look to the so-called charger, which are built in the car. So overall, there are many different options to charge an electric vehicle. First of all, there is a way also so-called DC charging or we call it fast charging. I will speak much more in detail after looking to onboard. With DC charging want to spend one additional sense on it is the connection on the charging station or wall box connected with the car, which provides so-called DC voltage. And with power plus, power range from 30 to 50 kilowatt, this is a good opportunity to enable very fast charging of electrical vehicle. The onboard charger is a system built into the car, which I mentioned and is enabled to recharge high-voltage battery from AC grid, while, for example, vehicle is parking, in a parking lot or in a garage. And what we have now presented on the PCIM is a small demonstrator of a so-called onboard charger of roughly 3.7 kilowatt optimized for a battery voltage of 4.5 volts, which is today, I would say, mainstream. Of course, the car in, let's say, is a more luxury class, they are using 800 volts of voltage. I already mentioned this term of product to system understanding, and looking to demonstrator, we use the same philosophy. So we integrated here a power module, an easy, again, also microcontroller as well sensing technology. I mentioned we're integrating all these parts. So these are the so-called, I would say, the key components of this demonstrator. Now let's have a look to this power part, the Easy module. The Easy module is a package, which is now in the market in many applications for quite some time. And now we have optimized our offering for the so-called of using in cars for onboard charger. In this package, we combine different chips, could be silicon, could be silicon carbide. According to the need, what we see from the designer and the designer manufacturers of onboard charger. And every, let's say, designer or manufacturer has different demands in terms of using, example, CoolMOS chip inside, a CoolSiC or a silicon chip inside. And according to this need, we are optimizing the layout in the product, adjusting the PressFIT pin positioning and then bring this to the customer for, let's say, fast design-in. And it's also worth to mention that this package is also filling the requirements for onboard charger in a car. It's a so-called AQG 324. And this kind of module is Easy. It's not only a module we are offering then for onboard charger. This can be also used for, let's say, other applications of cars when we think about, for example, an e-compressor and also so-called power steering. And again, it's not only about power. What I mentioned, it's about really a complete solution offering. So in the demonstrator, once again, we saw the power parts, gate driver to control power, microcontroller as well solutions for designing the power supplies. With this now, I would like to jump into the off-board charging. So looking to the off-board charging, we have a so-called -- we have different kind of clustering, the wireless charger, wireless charging use below 11 kilowatt, the DC wallbox up to 22 kilowatt, DC commercial high-power charger going up to 50 kilowatt and high-power fast charging, which is what you can find on highways. This is going from 150 kilowatt to today, it's about 350 kilowatt. Looking to the DCP charger. One part is, of course, the power semiconductor, the power solution, where we show here the Easy modules, but also EconoPACK Plus modules as well Discretes. Mainly, CoolMOS and CoolSiC are used in this application, what we are also showcasing on this virtual PCIM. Also here is worth to mention the benefit of CoolSiC. So with CoolSiC, it's about increasing power density by 50%. That means the same kind of cabinet, the overall charging power can be increased by 50%. Consequently, the charging time can reduce by 50% because of its more increased power in the charging pile or in a big charging park. One important topic is also what we highlighted is that we build up some demonstrator. And here it's more than this. It's a reference design. Reference design, which can be used, for example, a DC wallbox. So on the PCIM, we showed this 11-kilowatt design. This is mainly based on discrete devices with so-called CoolSiC. And it can be used for bidirectional charging. That means that, of course, if the battery is empty of the car, a battery is charged. But if there is more time, let's say, 8 to 10 hours during maybe nighttime and the battery is fully charged, then it can be used as an additional storage system for the grid to bring once again energy back to the grid and as the battery has to be charged again, let's say, 7:00 in the morning, then the algorithm will take care. Let's say, battery is charged again until 7:00 to 100%. So we have a bidirectional charging. It's a very compact design, which we're showing here with a high power density of 4.1 kilowatt per liter. And this is again what I said about this so-called high efficiency using CoolSiC. And now let's have a closer look to our board corner. We have -- I talked about this 11-kilowatt silicon carbide DC/DC or EV charging. And we showed many different design, for example, reference design for motor drive, a 20-kilowatt motor drive. So what you see here, a very compact one. That is more or less a complete drive, including DC link stages, microcontroller as well carbon sensor. And on DC charging, I would also highlight something that you see, how does it look like? We see here a charging pile from one of our customers. And what is done here is it's a so-called scalable approach. So once again, these kind of cases are so-called subunits. So for example, this customer is building up a powerful charging station up to 75-kilowatt by using different subunits, for example 1, 2, 3, 4, 5 with roughly 15 to 20 kilowatt of each [indiscernible]. The benefit is in case of maintenance, not the whole rec has to be changed. So only one of these boxes has to be changed and then the charger is working again. And the next step, we would like to go to drives application. We are now walking through the -- here, we see robotics. In robotics, typically, several drives are used. And for this, for example, we introduced so-called CoolSiC 1200 volts. And the target was especially for these several drives to use on the one hand side, of course, the losses here by 80%. The die is integrated in a very optimized SMD package. And thanks to the overall loss reduction, it was able to have low requirements on cooling. Here, a so-called fanless drive can be realized and the higher integration is also realized that the inverter is not anymore a separate box. It's now all complete inverter and completely integrated in the motor. And this is what we see here. So we have the CoolSiC silicon covered MOSFET, a gate driver, microcontroller and a sensor and encoder on a very small design, which is from the [indiscernible] best fit that is complete inverter, can be directly integrated in a motor. And then it's a good way to -- that's a very compact one, which can be then directly used in the robotic system. Yes. And last but not least, I would like to jump into the topic of major home appliance, so more users what we know from our, let's say, daily life. And we have highlight what we have shown this year on the PCIM, it's a so-called new iMOTION SmartDriver family. And this is so-called an integration of controller, of driver stage and the power part. In addition, it's also offering development tools and scripting energy. So all in one device, which can be used then in major home appliance applications as well on fan and pumps. So what's now new is we have iMOTION family already available from, let's say, lower integration to higher integration. And now we added a part which is offering a little bit more than the controller. So we have a digital controller inside as well as a gate driver and then corresponding discrete IGBTs or CoolSiC can be connected. So that is offering, let's say, closing the gap between fully integrated one, smart IPM, which is already available in our portfolio and a flexible solution, which is integrating a digital control only and then a gate wire is to be connected. So this, I would say, is the next level of system integration, which is offering, let's say, good trade-off between higher integration and good flexibility in terms of connecting this with IGBT discretes or CoolSiC. So with this, I would like to finish my little journey through this virtual fair. And you have an open question, we are happy to answer.

Markus, thank you very much for the intro. I hope it became clear that our product or system approaches is -- there are many examples how we live to it. So the EV charging is a perfect example of major home appliances. So we are not only delivering a couple of components into these things, but we offer complete solutions. And this is giving us an edge in the market. And that is the path that we want to continue.

Well, yes, please, if you have any questions, please go ahead and unmute yourself or put it into the chat, whatever you prefer. Markus, we haven't been talking about that before, but in the IPC business update call, there was also a slide on GaN and our initiatives here. I think we have a new product like in IPS. Maybe you can talk a little bit about that.

Yes, I would like to invite also Peter to give more insight because he's a much more expert on that. Peter, can you give us some more insights about that one?

Yes. Sure. I can try my very best. Yes. So regarding this particular new project -- product, maybe all to the -- yes, you can open it up there. This IPS, there's also a small video available, but I can briefly describe what it is about. So our gallium nitride offering was more or less a traditional one, meaning we do have individual power transistors, so those HEMTs in their dedicated packages. And we also launched [indiscernible] or after the power device itself, corresponding driver IC, which is exactly delivering what the HEMT needs as a current profile to drive it, what is significantly different compared to traditional power devices. So usually, we have a voltage like control for MOSFETs and IGBTs, but the HEMT needs a current control. Yes. And what is new now in this IPS is that we are merging the driver IC or in the first stage, at least the driver IC as the HEMT into a small system, if you take it like that. So it can be directly then controlled out of the microcontroller. And there's a second product being available, as you can see here also on those pictures, where not just a single switch with the drivers integrated by a complete half bridge. And so that's the first step. The second step then will be that also in microcontroller can be added. So all in all, the customer can get a small subsystem in a package as we just briefly have seen. So those a little bit IC or power IC like packages then containing driver IC, some gallium nitride switches, of course, and if required, some further networks to make an easy design in at the customer side without big trouble to manage the very fast switching behavior and the good connection of driver ICs, et cetera. So usually, these hiccups, especially as the design cycles are very short, this is a hurdle for many designers in this segment. And here, we try to make it easier for our customer.

Okay. Thank you. I do not see any further questions. And yes, I think let's -- here comes one. Can you please ask the speaker if you think there's any rationale to stay at 400-volt or will all OEMs move to 800 volt? Some have argued that, for example, Tesla's charging infrastructure may need retrofitting to support 800 volt.

I think it's a fair question. When -- I would say the final answer is not given yet. We see both 400, 800 volt. And I would say we are in the starting phase and there will be consolidation also on the battery voltage. But I think it's still a journey. And yes, what will be then at the end of the day, the main voltage, we have to see. Currently, let's say, the most, let's say, from cost-wise, spendable cars, I would say, are going for 400 volt. Luxury cars are going to 800 volt. And of course, the advantage, of course, increasing all the voltage class is also enabling fast charging, especially for long distance. We are, on the other side, many of the use cases are using cars in the city, where this low voltage is enough. But let's see where the journey is going ongoing.

Okay. There comes another question. I'm not quite sure what market it is referring to. What is your best estimate on the percentage of the market that will be served by modules versus bare die? I think, Robert, it was you posted that question. Is that again ATV and SiC? Okay.

Can you comment on that one, Peter?

Yes. I'm hesitating a bit because I'm not sure whether I get the question correctly. So...

I think I can give a general question, and Peter, please correct me if I'm talking nonsense. And I think to my knowledge, I mean, on the market is basically -- is now only Tesla and Hyundai at the moment with the SiC solution at all. And Tesla has chosen a way to use discretes and to really build a system on its own. And our design wins are more in the direction with modules. And both ways have its advantages. You can -- if you want to extract the last tiny bit of efficiency, then you must build a customized solution that is really optimized. That is the way Tesla goes or if you want to speed up the process, time to market and have a more easier-to-use solution then use modules, which is -- Yes. And here, I'm guessing, I think, the majority, but please correct me, Peter, if you see that differently.

Yes. Okay. So I guess I understand the question better if it's really related to the market model for the EV propulsion systems. At least for us at Infineon, we have a mixed customer base also. As long as we are engaging directly with the OEMs, like it is the case with Hyundai, then, of course, our end product is the one which is going to be implemented. But it's, let's say, specialty of the automotive market that there's still a lot of tier 1s on the market, which we serve with bare die. And then those guys implement it into their, let's say, solution for the OEM. It's much more pronounced compared to the industrial market. We're also -- we have bare die customers and our end customers. But this share, I think, at the moment in the automotive segment is still high. So how this is going to develop eventually? Yes, we will see. This is still a very, very young market. And as Alex pointed out, it goes even up to the guys using discretes like California friends. So let's see how it goes to at the moment. We see the business in both directions. .

Yes. And we have a full portfolio, that means we support the customer both ways if you want to have a customized solution, we help them. And if he says he wants to have a scalable module-based solution, we have something on offer -- a very good offering as well. So we are a bit agnostic to that. And then we do not have to press a customer in one or the other direction. Okay. Hope that answered the question. Anything else? Okay. And then Peter, Markus, thank you very much for giving us these insights. I think then we call it a day. And yes, thanks for everyone participating. I mean it's -- hopefully, next year, we will all meet again then not virtually, but physically at the PCIM. And 6:00 in the evening is usually the time then to have the first beer. So that would be then my hope for -- best wishes for next year, enjoy the evening. Bye-bye.

Yes. Bye-bye.