Infineon plans €1.1bn 300mm GaN fab at Villach by end of 2027

Infineon will invest about €1.1bn by 2034 to upgrade existing cleanroom facilities at Villach and establish what it says will be the world's first high-volume manufacturing facility for GaN power semiconductors on 300mm wafers. The company says using existing infrastructure alongside the upgrades will let it expand capacity more efficiently and cost-effectively.

The project is intended to meet rising demand for energy-efficient power chips used in AI data centres, energy infrastructure, e-mobility, robotics and consumer electronics. GaN switches faster than silicon, wastes less energy and runs cooler, according to Infineon. That makes it useful for power conversion in chargers, servers and motor drives. Infineon processed its first 300mm GaN wafers in 2024.

"By establishing high-volume manufacturing on 300-millimeter wafers, we will be the first company in the world to bring gallium nitride power electronics into volume production," CEO Jochen Hanebeck said. He said the investment showed commitment to Europe's semiconductor ecosystem and technological sovereignty.

Why 300mm wafers matter

A 300mm wafer holds about 2.3 times as many chips as the 200mm wafers commonly used for GaN today, according to Infineon. Infineon says the larger wafer should lower manufacturing costs and increase output. The company says the ramp will be aligned with market demand.

Yole Group expects the GaN power semiconductor market to reach about $3.5bn by 2031, with annual growth of around 35% between 2025 and 2031, according to estimates cited by Infineon.

Infineon opened the Villach plant in 2021 with an initial investment of €1.6bn. The new spending is far smaller than the roughly €5bn Dresden factory Infineon opened in the summer, which the company says is the largest single investment in its history.

Aid and jobs

The European Commission has approved €319m in state aid under the European Chips Act. That equals about 29% of the €1.1bn investment. The investment will not create new jobs, according to the news agency dpa. Sabine Herlitschka, chief executive of Infineon Austria, said it would secure existing positions.

Infineon Austria employs about 5,800 people, including around 4,800 at Villach. Herlitschka said the project would help translate research into industrial production and secure highly skilled jobs. "From Austria, we are bringing innovation into industrial application, strengthening our technological leadership and securing highly skilled jobs," she said.

Chancellor Christian Stocker called the project "one of the largest single investments in the history of Austria's high-tech industry." Economy minister Wolfgang Hattmannsdorfer said Europe accounts for only around 10% of global chip production and must manufacture the technology itself. He said every job in the chip industry can support six more across the broader economy, and that Austria would support the project with up to €319m subject to funding criteria linked to the location.

Competition and timing

TSMC has said it will leave the GaN foundry business by mid-2027, partly because of price pressure from Chinese rivals, TrendForce reported. Infineon's early move to 300mm wafers is intended to give it a cost advantage over competitors including Innoscience, Navitas, STMicroelectronics and Texas Instruments, which are also working on GaN power chips, according to Trending Topics.

Austria's Federal Ministry for Economic Affairs, Energy and Tourism still has to make the formal funding commitment. Infineon expects it within the stipulated time limits.