Infineon said on 27 October that it will invest €1.1 billion ($1.2 billion) over eight years at its Villach factory in Austria to make gallium nitride power chips on 300-millimetre wafers, Bloomberg reported. The Munich-based chipmaker announced the project at a news conference in Vienna and plans to use existing cleanroom space, Trending Topics reported. The investment gives Infineon a route to higher-volume production of chips used to control power in servers and other electrical equipment.
Key points
- Infineon plans to begin high-volume production at Villach at the end of 2027 and continue the investment through 2034.
- The company says a 300-millimetre wafer can yield 2.3 times as many chips as a 200-millimetre wafer.
- The European Commission has approved €319 million in state aid for the project. Austrian ministerial approval is pending.
- The investment is intended to secure existing jobs at Villach rather than create new ones.
Infineon’s 300-millimetre wafer plan
Infineon plans to start high-volume production at the end of 2027, while spending on the expansion will continue through 2034. The company is upgrading infrastructure at Villach to produce gallium nitride, or GaN, power semiconductors. GaN can switch and convert electricity more efficiently than conventional silicon, making it useful in power supplies where energy losses and heat matter.
Infineon says the larger wafers can yield 2.3 times as many chips as the commonly used 200-millimetre version, Reuters reported. A higher chip count per wafer is central to the company’s manufacturing plan. Infineon processed its first 300-millimetre GaN wafers two years before the announcement and says it will align the production ramp-up with market demand.
Jochen Hanebeck, Infineon’s chief executive, said the company expects to be the first to bring GaN power electronics into high-volume production on 300-millimetre wafers, DPA reported. Infineon is targeting power supplies for AI data centres, as well as energy infrastructure, electric mobility, robotics and consumer electronics. Those applications give the planned line several potential sources of demand rather than a single end market.
Reuters gave the investment’s dollar equivalent as $1.23 billion, while Bloomberg reported $1.2 billion. Both reported the planned spending as €1.1 billion.
€319 million in Chips Act aid
The European Commission has approved €319 million in state aid for Villach under the European Chips Act, an EU programme intended to expand semiconductor manufacturing capacity in Europe. Formal approval from Austria’s economy ministry is still pending. The aid would support part of Infineon’s investment, with the company undertaking the multiyear factory programme.
The project is being fitted into existing cleanrooms. The investment will not create new jobs, Trending Topics reported. Sabine Herlitschka, chief executive of Infineon Austria, said it would secure existing positions. Infineon Austria employs about 5,800 people, including around 4,800 in Villach. The workforce consequence is therefore different from the addition of a new factory and new posts.
Infineon opened a factory in Dresden in summer 2026 at a cost of around €5 billion, which Trending Topics described as the largest single investment in the company’s history. At Villach, the spending is directed at bringing a different power-chip material into volume production using space already at the site.
GaN rivals and Infineon shares
Other chipmakers are active in GaN. China’s Innoscience describes itself as the largest manufacturer of the material on 200-millimetre wafers, while Navitas, STMicroelectronics and Texas Instruments also work on GaN power chips. TSMC has announced plans to leave the GaN foundry business by mid-2027. Infineon’s proposed distinction is production on 300-millimetre wafers at high volume.
Yole Group, a market research firm, expects the market for GaN power semiconductors to reach about $3.5 billion (roughly €3.1 billion) by 2031, growing by around 35 percent a year. Infineon says its Villach production ramp-up will track market demand.
Infineon shares had fallen around 40 percent since mid-June before the announcement. They rose nearly 1 percent in early Frankfurt trading on 27 October, Reuters reported.
