Infineon invests 1.1 billion euros in Villach
Villach in Austria is one of Infineon’s most important locations. The chip manufacturing leader has now established the world’s first high-volume production facility for GaN power semiconductors on larger 300-mm wafers there. Production is set to begin in 2027. Around 1.1 billion euros are planned to be invested in the existing infrastructure in Villach by 2034.
Image: Infineon
One of the world’s leading microchip manufacturers, Infineon, achieved a breakthrough in 2024 in the production of gallium nitride (GaN) power semiconductors. Thanks to the success of manufacturing GaN semiconductors on 300-millimeter wafers instead of 200-millimeter wafers, which increases production volume by 2.3 times, it has now become possible to establish high-volume manufacturing for the first time.
Therefore, Infineon plans to invest around 1.1 billion euros in its facility in Villach, Austria, by 2034. Utilizing and modernizing the existing cleanroom areas, which are essential for chip production, is intended to make the expansion of manufacturing capacity particularly efficient and cost-effective. Currently, Infineon Austria employs around 5,800 workers, of whom approximately 4,800 work at the plant in Kärnten.
"This substantial investment is our clear commitment to strengthening Europe’s semiconductor ecosystem and technological sovereignty. By establishing 300-millimeter high-volume production, we will be the first company in the world to bring gallium nitride power electronics into mass production," says Jochen Hanebeck, CEO of Infineon Technologies AG.
Huge market potential for GaN chips
The start of high-volume production for next-generation gallium nitride (GaN) power semiconductors on 300-millimeter wafers is scheduled for late 2027. This will meet the growing demand for energy-efficient components in emerging fields such as AI data centers, electric mobility, renewable energy, robotics, and consumer electronics.
The market potential is enormous: industry analysts predict that GaN power semiconductors will see annual growth of around 35 percent between 2025 and 2031, reaching approximately 3.5 billion US dollars by then. The reason is that gallium nitride switches and converts electricity much more efficiently than conventional silicon. This enables the creation of smaller, more powerful systems with minimal energy loss and reduced heat generation.
Austrian Chancellor Christian Stocker commented on this development as follows: “With Infineon’s billion-dollar investment, we are witnessing one of the largest single investments in the history of Austria’s high-tech industry. This is not only a strong commitment to our economic location but also ensures that the future of the semiconductor industry will be determined not only in Asia or America but also in Austria and Europe.”
Boost from EU’s multi-million euro funding
The project is supported by the “European Chips Act.” The European Commission has already approved state subsidies totaling 319 million euros. A formal funding commitment from Austria’s Ministry of Economics is expected on schedule.
Economy Minister Wolfgang Hattmannsdorfer emphasizes the project’s economic benefits: “Austria is already a leader in energy-efficient chips. Compared to our population size, we rank first in the EU in spending on research and development in the semiconductor sector. We aim to build on this advantage through our industrial strategy by not only researching new technologies but also producing them at an industrial scale. The entire economic landscape benefits from this: for every job created in the chip industry, six additional jobs can be generated across other sectors.”
Sabine Herlitschka, CEO of Infineon Technologies Austria AG, further emphasizes the importance of integrating research and industry: “Competitiveness and technological sovereignty arise where outstanding research translates into industrial value creation. This is precisely where we focus with our flagship project: We bring innovation from Austria to industrial applications, strengthen our technological leadership role, and secure high-quality jobs. Microelectronics is a key industry with tremendous leverage for the economy and society. The entire Austrian semiconductor ecosystem benefits from this—ranging from research organizations and universities to industrial partners. In this way, we sustainably enhance Europe’s competitiveness and strategic autonomy in microelectronics.”