According to Reuters, Infineon Technologies AG recently said that due to the decline in demand, inventory backlogs, which could not be alleviated before this summer, will put pressure on the company’s profit margins.

“The product inventory level is expected to peak in the summer. It may start to decrease after the summer, but we still expect the inventory level at the end of the year to be higher than our target inventory level,” said Infineon CEO Reinhard Ploss.

Analysts said that automotive electronic components are the main products of Infineon, and the economic slowdown in China (the world’s largest automotive market) has led to a decline in demand, which will affect Infineon’s sales performance.

Infineon said that although China’s subsidies for electric vehicles have decreased, China’s demand for electric power systems and assisted driving technology remains strong. However, in the short term, as Infineon cut production to consume the total quarterly inventory in March, its profit margin will continue to be under pressure.