[BidClub_]
Sohn Conference Foundation · · 9 min

Kevin Salimian pitches Infinion at Sohn 2026

Kevin Salimian

YouTube ↗
TL;DR
  • Kevin Soleymani's Sohn pitch: Infineon is "at the early stages of a multiyear growth and margin transformation," with a projected €94 stock price by end-2027 — 58% upside. The math: €3.74 of 2028 EPS on a 25x multiple, justified by "structurally inflecting growth and higher profitability."
  • The AI leg is the inflection: AI-related revenue was only 5% of 2025 revenue — and "for good reason" the stock was not considered an AI winner — but he sees it reaching 16% by 2027 and 25% by 2029. Drivers: GPU power draw "nearly doubling generation over generation," the 400V-to-800V transition, and new rack form factors (vertical power and power sidecars), taking power semiconductors from 50bps of AI rack cost to over 250bps by 2028 — "more than quintupling over the next 3 years" — and lifting structural growth from 10% to 14% per year.
  • Industry structure is improving. Infineon plus its number-one competitor, Monolithic Power Systems, now represent over 2/3 of the industry, and supply constraints have "recently begun to drive absolute pricing above normal content growth" — his early indicator that power delivery is becoming strategic.
  • He sees the auto destock as complete: revenues were flat to down over the last 3 years because of a sell-in/sell-out divergence from COVID-era chip hoarding, followed by destocking from 2023 through 2025. Customer and industry channel inventories indicate the destocking is complete, and he expects high-single-digit growth to resume "beginning later this year" in a market that grows approximately 10% through the cycle, with EVs carrying 2x ICE semiconductor content.
  • Margins are the third leg: Infineon makes 60% of its chips in-house while Monolithic Power outsources 100% — particularly helpful while TSMC and other foundries face capacity constraints "for the foreseeable future." Plants moving from low to high utilization, higher pricing, and the new Dresden facility coming online this summer support his expectation that operating margins will expand "well above consensus expectations."
Digest · the substance, structured for research

1. Two decades at #1, a three-part thesis

  • Soleymani — launching concentrated long-only Oxel Capital Partners in Q3 — pitches Infineon: a Siemens spinoff of 27 years, led by 32-year veteran Jochen Hanebeck, and the #1 power-semiconductor provider across autos, industrials, and data centers "for over two decades." Thesis: inflecting AI power, an auto recovery, and "a rapid rise in profit margins."

2. AI power quintuples as a share of the rack

  • AI-related revenue was just 5% of 2025 revenue, but GPU power draw "nearly doubling generation over generation," the 400V-to-800V shift, and vertical-power/power-sidecar form factors take power semiconductors from 50bps of AI rack cost to over 250bps by 2028.
  • With Infineon and Monolithic Power representing over 2/3 of the industry and supply constraints recently beginning to drive pricing "above normal content growth," Soleymani expects AI power to reach 16% of revenue by 2027 and 25% by 2029, accelerating structural growth from 10% to 14% per year.

3. He sees the auto destock as finished

  • His diagnosis of revenues being flat to down over the last three years: a sell-in/sell-out divergence from 2020–21 shortage hoarding, followed by 2023–25 destocking. Customer and industry channel inventories indicate the destocking is complete; he expects high-single-digit growth to return "later this year" in a long-term market growing approximately 10% through the cycle, with EVs at 2x ICE semiconductor content.

4. In-house manufacturing, Dresden, and the €94 target

  • Infineon manufactures 60% of its chips in-house, while Monolithic Power outsources 100%—particularly helpful while foundries face capacity constraints; the utilization ramp, higher pricing, and the new Dresden facility coming online this summer support an expected expansion in margins "well above consensus expectations."
  • The close: €3.74 of 2028 EPS at 25x implies a €94 stock price at end-2027, or 58% upside.

Kevin Soleymani

Thanks, Brian. Good morning, everyone. It’s a privilege to be here with all of you at the Sohn Investment Conference. I’m Kevin Soleymani, and I’m the founder of Oxel Capital Partners, a concentrated, long-only investment firm launching in Q3 of this year.

Today, I’m excited to discuss Infineon, a company that we believe is at the early stages of a multiyear growth and margin transformation. Infineon is the number-one provider of power semiconductors to the automotive and AI markets. The company’s chips are used to manage electricity efficiently and enable electric mobility. The power-seat controls in your car very likely were made by Infineon.

The company is also the number-one provider of semiconductors used to regulate power within servers, including AI servers. Infineon was spun off from Siemens 27 years ago and is led by talented executive Jochen Hanebeck, who worked his way up through the company over the last 32 years. The company’s rich corporate history in the power semiconductor industry gives it a unique R&D and go-to-market position. Infineon has been the leading provider of power semiconductors for its key end markets, including autos, industrials, and data centers, for over 2 decades.

Our thesis on Infineon has 3 key elements. First, we project structurally inflecting growth in Infineon’s AI power business. Second, we forecast a return to secular growth in the automotive segment. And third, we believe Infineon will see a rapid rise in profit margins over the coming years.

1. AI Power Drives Growth

Let’s start with inflecting growth in AI power. Infineon, the company, has long been a key player in the entire AI power value chain. The company’s semiconductors are used across multiple steps to manage, convert, and deliver power to AI processors in AI data centers. However, Infineon, the stock, historically has not been considered an AI winner, and for good reason. AI-related revenues historically were a very small percentage of consolidated Infineon revenues, including only 5% of 2025 revenues.

2. Power Demand Reshapes AI

We believe we are at the beginning of a structural inflection in the importance of power semiconductors as power delivery becomes increasingly strategic, putting Infineon in an excellent position going forward. Prospectively, there are 3 key reasons for power semiconductors to see significant dollar-content growth. First, power draw per GPU is nearly doubling generation over generation, increasing the need for power semiconductors that can regulate all that additional power. Second, the shift to higher voltages, including the upcoming transition from 400 volts to 800 volts, carries higher complexity and requires more advanced materials, leading to additional power semiconductor content. And third, new form factors in AI racks, including vertical power and power sidecars, will drive additional power semiconductor content in the coming years.

Broadly, we expect that as the power draw per GPU doubles in each prospective chip generation, the content for power semiconductors will also double. The power semiconductor market will go from only 50 basis points of the cost of an overall AI server rack today to over 250 basis points by 2028, more than quintupling over the next 3 years.

3. Industry Structure Improves

Importantly, the industry structure for power semiconductors is also improving. Infineon’s market share has consistently grown over the last 3 years as the increasing complexity of power semiconductors is reducing the industry’s competitive intensity. Infineon and its number-one competitor, Monolithic Power Systems, combined today represent over 2/3 of the industry. Infineon’s differentiated positioning and broader industry supply constraints have recently begun to drive absolute pricing above normal content growth, an early indicator of the increasing strategic importance of power semiconductors in AI data centers.

Overall, we expect AI power to go from only 5% of Infineon’s revenues in 2025 to 16% in 2027 and 25% by 2029, driving an acceleration in Infineon’s structural long-term growth rate from 10% to 14% per year over the coming years.

4. Automotive Growth Returns

The second part of our thesis is a recovery in the automotive segment. Long term, the automotive semiconductor market grows approximately 10% through the cycle as cars add additional semiconductor features and due to the mix shift to electric vehicles, which have 2x the semiconductor content of traditional internal-combustion-engine cars. Infineon is the number-one player in the automotive semiconductor industry.

However, Infineon and its peers’ auto revenues have been flat to down over the last 3 years. The reason is a divergence between sell-in and sell-out. In 2020 and 2021, automotive semiconductors went into shortage due to COVID supply-chain issues, driving hoarding of chips by automotive companies and later leading to destocking of inventories from 2023 through 2025.

Now, customer and industry channel inventories indicate that the destocking has been completed. For Infineon, this means we expect the automotive segment will accelerate back to high-single-digit growth beginning later this year and for the years to come.

5. Margins Expand Rapidly

The third part of our thesis is that the company is entering a period of accelerating operating-margin expansion. Infineon manufactures 60% of its semiconductor chips in-house. This is particularly helpful today as Taiwan Semiconductor Manufacturing Company and other foundries will have capacity constraints for the foreseeable future. Infineon’s main competitor, Monolithic Power Systems, outsources 100% of its manufacturing.

It also means that margin expansion for Infineon will be quite significant going forward as the company’s plants go from low to high utilization in the coming quarters and years, and the company’s gross margins benefit from higher pricing. Additionally, Infineon’s new Dresden facility is also coming online this summer, right in time for accelerating AI power growth. Overall, we expect Infineon’s operating margins to expand well above consensus expectations over the coming years.

6. Infineon’s Valuation Upside

Bringing it all together, we forecast €3.74 of EPS in 2028. Using a 25x multiple, which we believe is reasonable due to structurally inflecting growth and higher profitability, we get to a €94 stock price at the end of 2027, or 58% upside. Thank you for your time.

Kevin Salimian pitches Infinion at Sohn 2026 | BidClub