updated 02:40 pm EDT, Thu May 29, 2008
Infineon 3G Chip Demand
Chipmaker Infineon today fueled speculation when it said it will take deeper than expected losses for its ongoing quarter based on low orders for an anonymous project. The company explains that a deal to supply wireless chipsets to Nokia has been delayed but has drawn attention by refusing to name another company which has ordered fewer HSDPA-based 3G chipsets than anticipated. Analysts at JPMorgan and UBS believe Infineon's client may be Apple and suggest that the company may have dropped its build rates for a future 3G-capable iPhone.
"The lower volumes in the certain platform ramp cited could be Apple reducing the initial launch volume [for the 3G iPhone]," JPMorgan's Sandeep Deshpande speculates.
However, Apple is believed to have already transitioned some or all of its iPhone production to the future design, prompting concerns that recent worldwide iPhone supply shortages have been triggered by a major production run-up for a 3G edition that would contradict claims of smaller orders from Apple.
While Infineon isn't expected to reveal itself as an iPhone chipset supplier until after a public launch, the company already supplies the cellular data chipset for the existing iPhone and has had the name of a recent 3G chipset identified by sources as well as code within betas of upcoming iPhone firmware, making it the likely if not only candidate for the communications hardware in an anticipated new iPhone model. The S-GOLD3H, also known as the PMB8878, supports up to 7.2 megabits per second on many international 3G networks, including AT&T in the US.
The news of an impending financial shortfall at Infineon follows the resignation of Infineon's chief executive after criticism for an alleged inability to turn around the company's fortunes as quickly as hoped.