Infineon is expanding its plant in Austria for over one billion euros

The semiconductor manufacturer Infineon is building a new production facility at its Austrian location in Villach in the state of Carinthia for 1.1 billion euros. According to the company, this is the world's first high-volume production of the latest generation of power semiconductors.

According to Infineon, the new chips are made of gallium nitride (GaN). Semiconductors made from this material have the advantage over conventional silicon chips in that they can switch much faster and are therefore significantly more energy efficient. It is estimated that the global market volume for GaN chips will increase sixfold to 3.5 billion euros by 2031.

“The world is hungry for energy,” explained Infineon boss Jochen Hanebeck about the demand for gallium nitride. With the new plant, his company is paving the way for the widespread use of gallium nitride in a variety of key applications in areas such as artificial intelligence, energy infrastructure, electromobility and robotics.

The wafers are 300 millimeters in size instead of the previous 200 millimeters. According to the information, this ensures efficiency gains in production. Compared to a 200 millimeter wafer, 2.3 times the number of chips can be produced.

Production is scheduled to start at the end of next year, but investments are planned for a period up to 2034. Infineon uses existing cleanroom capacities at its location.

For this project, Infineon will receive state aid of 319 million euros as part of the European Chips Act, explained Austrian Chancellor Christian Stocker. He pointed out the positive effects on his country's economy. "Every job at Infineon secures almost three more jobs in Austria." The German group has around 5,800 employees there.

Infineon boss Hanebeck emphasized that, among other things, the competence of the employees and a reliable political environment tipped the scales in favor of Villach.

Products relating to the power supply of data centers are an important growth driver for Infineon. In the current 2025/2026 financial year, the Munich-based group is expected to achieve sales of more than 1.6 billion euros. Hanebeck hopes that the new Villach facility will contribute 1.5 billion euros annually to group sales.