Comment Why is CFO Dominik Asam leaving Infineon?

DESIGN&ELEKTRONIK's power expert Ralf Higgelke is commenting the leave of Infineon's CFO Dominik Asam.

Dominik Asam, CFO of Infineon, will join Airbus SE. But his contract with Infineon was renewed in March this year until 2023. This is raising some questions.

Infineon is doing really well these days. Sales and profits rose strongly in the past fiscal year. And the order books are bursting with orders for the coming months. At the same time, the world market leader in power semiconductors has set the course for future growth.

For 1.6 billion euros the company is building a brand-new 300 mm wafer fab at its Carinthian site in Villach, which is expected to go into operation at the beginning of 2021. Infineon has also invested heavily in the future topic of silicon carbide. Earlier this year, Infineon signed a long-term supply agreement with Cree for SiC raw wafers valued well over one hundred million dollars. And at the beginning of last week, Infineon bought the Dresden-based start-up Siltectra for 124 million euros, whose technology enables expensive SiC wafers to be split into two thinner ones. This far so good.

And now, with all the joy, the news was bursting that CFO Dominik Asam will leave the company to join Airbus. Why is that? His contract was extended to 2023 in March this year. Furthermore, he was regarded as the possible successor to CEO Ploss, who turns 63 beginning of December and whose current contract expires in autumn 2020.

Perhaps Asam refused to support the investments of up to 1.7 billion euros in factories, new machinery and modern software during the financial year that had just begun. This is 20 percent of the forecasted turnover, well above what many market observers had expected. Likewise, the stock market does not seem to appreciate Ploss's long-term growth strategy. Although the company presented excellent figures, the share price dropped by eight percent immediately after that announcement. Just as if Germany's largest chip manufacturer was heading straight towards the cliff. It seems that short-term investors in particular are fleeing, those who are unwilling to embrace Ploss’s long-term growth strategy.

In addition, a major economic crisis could occur at any time or the economic motor in China could start to stutter, as some fear in view of Trump's punitive tariffs. This could have been Asam' s warning. However, after the financial crisis of 2008, it also became evident that the market could pick up again very quickly. Back then, many semiconductor companies that considered short-term growth shut down some of their fabs, only to ramp them up again and hire experienced chip designers. This resulted in major delays and supply shortages.

Another possible scenario that might lead to the departure of Asam could be self-made: Experts considered him a possible successor to CEO Ploss, who will turn 63 at the beginning of December and whose ongoing contract expires in autumn 2020. But considering the importance of the business in China, the Supervisory Board may have decided to appoint someone else as its successor. Or: Ploss has decided to stay on for a few more years after 2020 to reap the rewards of his long-term growth strategy.

Anyway, I hope that Infineon’s supervisory board will continue to support Dr. Ploss's long-term growth strategy and not give in to the temptation of short-term profit optimization. Unfortunately, such far-sighted managers as Ploss are very rare. And I wish Dominik Asam that he will position Airbus financially just as well as Infineon.