Infineon has announced its plans to expand its capacity by building a new plant in Dresden, Germany. This ambitious project is set to be the largest investment in Infineon’s history, costing approximately €5 billion. While the company is still seeking public funding of around €1 billion, the Board has given its approval to move forward with the project.
The expansion project has been driven by the expected order volume from Stellantis, with whom Infineon signed an MoU in November 2022. This agreement will see Infineon supply corresponding chips for use in Stellantis-branded electric cars in the second half of the decade. The company has reserved manufacturing capacity for this purpose, which will be met by the new Dresden plant, subject to “appropriate public funding.”
The German Federal Ministry for Economic Affairs and Climate Action has approved an early project launch, allowing construction to begin before the completion of the inspection of legal subsidy aspects. However, the plant must comply with the European Chips Act, as the European Commission aims to achieve a 20% share of global semiconductor production in the EU by 2030. Infineon expects that semiconductor solutions for industrial and automotive applications produced at the “Dresden Fab” will help the EU to move towards this goal.
The Dresden Fab will produce semiconductors and analogue/mixed-signal components for use in various applications, including energy-efficient charging systems, small automotive motor control units, data centers, and IoT applications. The plant will begin production in 2026, and Infineon expects to create 1,000 new jobs. The company also plans to achieve additional revenues each year that are on the order of the investment amount when operating at full capacity.
Infineon’s CEO, Jochen Hanebeck, said, “We see structurally growing demand for semiconductors, for example, for use in renewable energies, data centers, and electro-mobility. By building the 300mm Smart Power Fab in Dresden, we are establishing the prerequisites necessary to successfully meet the rising demand for semiconductor solutions.”
The expansion project is a significant step towards meeting the growing global demand for semiconductors. By investing in new manufacturing capacity, Infineon is taking a proactive approach to ensure that it can continue to provide high-quality semiconductor solutions that meet the needs of its customers.
