Infineon to Invest 1.1 Billion Euros in Austrian GaN Chip Plant

Infineon Technologies AG will invest around 1.1 billion euros in its Villach facility in Austria to manufacture gallium nitride (GaN) power semiconductors on 300-millimetre wafers.

As per the firm, the facility will be the world’s first of its kind for high-volume production in Europe, with manufacturing scheduled to begin by the end of 2027. The investment will involve upgrading existing cleanroom facilities at the Villach site, with the expansion planned through 2034. Infineon said that using existing infrastructure alongside the upgrades would enable it to increase manufacturing capacity more efficiently and cost-effectively.

The project is intended to meet rising demand for energy-efficient power semiconductor chips used in artificial intelligence (AI) data centres, energy infrastructure, electric mobility, robotics and consumer electronics. These applications require advanced power conversion technologies that can improve energy efficiency, reduce heat generation and support increasingly compact electronic systems.

Infineon said that the new facility would take its gallium nitride technology from development to high-volume manufacturing for customers. The company achieved a technological milestone two years ago when it successfully processed the world's first 300-millimetre GaN wafers.

The transition from 200-millimetre to 300-millimetre wafers is expected to improve production efficiency. According to Infineon, the larger wafers can yield approximately 2.3 times as many chips per wafer, helping lower manufacturing costs and increase output.

Infineon Technologies Chief Executive Officer Jochen Hanebeck said that the investment demonstrated the company's commitment to strengthening Europe's semiconductor ecosystem and technological sovereignty. He said high-volume production using 300-millimetre wafers would support wider adoption of GaN power electronics across applications including AI, energy infrastructure, electric mobility and robotics.

The project has received approval for 319 million euros in state aid from the European Commission under the European Chips Act. The formal funding commitment from Austria's Federal Ministry for Economic Affairs, Energy and Tourism is expected within the stipulated time limits.

Austrian Federal Minister for Economic Affairs Wolfgang Hattmannsdorfer said that the government intended to support the project with up to 319 million euros, subject to funding criteria linked to the location. He said that the investment would help Austria expand semiconductor manufacturing and strengthen domestic industrial value creation.

The European Commission's approval is also expected to generate benefits across related sectors through collaboration with universities, research institutions and industrial partners. The project could improve access to innovative technologies and products for start-ups and small and medium-sized enterprises.

Infineon Technologies Austria Chief Executive Officer Sabine Herlitschka said that the facility would help translate research into industrial production, strengthen technological leadership and support highly skilled employment. She added that the wider Austrian semiconductor ecosystem, including universities, research organisations and industrial partners, would benefit from the investment.

The project will further strengthen Villach's position as a global centre for power electronics and new semiconductor materials. Infineon Austria employs around 5,800 people, including approximately 4,800 at Villach. The new facility is expected to create synergies with the company's existing research and development activities in power electronics.

Gallium nitride is a semiconductor material that enables electricity to be switched and converted more efficiently in many applications. Compared with conventional power semiconductor technologies in suitable applications, GaN can enable smaller and more powerful systems while reducing energy losses and heat generation.

The market for GaN power semiconductors is expected to reach approximately 3.5 billion US dollars by 2031, representing annual growth of around 35 percent between 2025 and 2031, according to estimates cited by Infineon.

The investment comes amid efforts by European governments to expand regional chip manufacturing and strengthen supply-chain resilience. By introducing high-volume production on 300-millimetre wafers, Infineon aims to increase manufacturing efficiency while meeting demand from industries seeking more energy-efficient power conversion solutions.