Infineon Technologies AG is setting up Europe’s first high-volume manufacturing facility for gallium nitride (GaN) power semiconductors using 300-millimetre wafers. The company plans to invest around €1.1 billion in its existing cleanroom facilities at its Villach site in Austria by 2034, using and upgrading the current infrastructure to expand production capacity more efficiently and at a lower cost. Manufacturing is expected to begin by the end of 2027. The investment aims to meet growing demand for energy-efficient power chips used in AI data centres, energy infrastructure, electric vehicles, robotics and consumer electronics. GaN semiconductors can improve power-conversion efficiency, reduce energy losses and enable smaller, more compact electronic systems.
Infineon is a leading developer of gallium nitride (GaN) power semiconductors. Two years ago, the company achieved a major technological milestone by successfully processing GaN wafers measuring 300 millimetres in diameter. These larger wafers can produce around 2.3 times more chips per wafer than conventional 200-millimetre wafers, making manufacturing more efficient and cost-effective. Infineon is now moving this technology into high-volume production to supply customers with next-generation power semiconductors.
“This substantial investment shows our clear commitment to strengthening the European semiconductor ecosystem and Europe’s technological sovereignty. 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,” says Jochen Hanebeck, CEO of Infineon Technologies AG. “In doing so, we are paving the way for the widespread use of gallium nitride in a wide range of key applications in areas such as artificial intelligence, energy infrastructure, e-mobility and robotics. This new, state-of-the-art manufacturing facility translates innovation leadership into direct customer benefits.”
Christian Stocker, Federal Chancellor of the Republic of Austria: “With Infineon’s billion-euro 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 Austria as a business location but also helps ensure that the future of the semiconductor industry will not be shaped solely in Asia or the United States, but also in Austria and Europe. Villach will thus become home to a globally unique production facility for one of the key technologies that will shape the future. This will strengthen our international competitiveness and secure jobs and value creation in Austria. After all, Austria may not be a country with unlimited natural resources, but it is a country with an unlimited wealth of talent. Our cutting-edge research sets international standards, and companies such as Infineon demonstrate every day how innovation made in Austria works. These are precisely the strengths we want to build on with our industrial strategy so that, by 2035, Austria will once again rank among the world’s top ten industrial nations.”
Wolfgang Hattmannsdorfer, Austrian Federal Minister for Economic Affairs: “Chips are as important to tomorrow’s economy as oil was to yesterday’s. Europe currently accounts for only around 10 percent of global chip production. For me, the conclusion is clear: We must also manufacture this key technology in Europe. Austria is already a leader in energy-efficient chips. Relative to our population, we rank first in the EU in business R&D spending in the semiconductor sector. With our industrial strategy, we intend to build on this lead and not only research new technologies but also manufacture them on an industrial scale. This benefits the entire economy: Statistically, every job in the chip industry can provide six additional jobs across the broader economy. That is why we intend to support Infineon’s new chip production with up to 319 million euros – subject to clear funding criteria for the location. This will ensure that public funds strengthen value creation and jobs in Austria over the long term.”
The investment in this first-of-a-kind technology is being supported under the European Chips Act. The European Commission approved €319 million in state aid. The formal funding commitment by the Austrian Federal Ministry for Economic Affairs, Energy and Tourism is expected within the stipulated time limits. By approving the funding from the Federal Ministry for Economic Affairs, Energy and Tourism, the European Commission is not only enabling the expansion of manufacturing capacities in Europe but is also generating positive spillover effects in related sectors – for example, through cross-border collaboration with universities and research institutions and improved access to innovative technologies and products for start-ups and small and medium-sized enterprises.
“Competitiveness and technological sovereignty emerge where excellent research is translated into industrial value creation. This is precisely where our flagship project comes in: From Austria, we are bringing innovation into industrial application, strengthening our technological leadership and securing highly skilled jobs. Microelectronics is a key industry with enormous leverage for the economy and society. The entire Austrian semiconductor ecosystem benefits – from research organizations and universities to industrial partners. We are thus sustainably strengthening Europe’s competitiveness and strategic autonomy in microelectronics,” emphasizes Sabine Herlitschka, CEO of Infineon Technologies Austria AG.
The investment strengthens Villach’s role as a global competence center for power electronics and new semiconductor materials. Infineon Austria currently employs around 5,800 people, approximately 4,800 of them at the Villach1 site. Together with universities, research institutions, start-ups and industry partners, Infineon forms the core of an internationally recognized microelectronics ecosystem in southern Austria. The establishment of the new 300-millimeter GaN manufacturing facility will also create positive synergies with the power electronics research and development activities located in Villach.
Gallium nitride is an advanced semiconductor material that can switch and convert electricity much more efficiently. This enables smaller, more powerful and more energy-efficient electronic systems with lower energy loss and reduced heat generation. Analysts expect the market for GaN power semiconductors to grow to approximately USD 3.5 billion by 2031, representing annual growth of around 35 percent between 2025 and 2031.2
