Infineon Bets €1.1 Billion on World's First 300mm GaN Fab in Austria

Infineon is putting €1.1 billion into a gallium nitride chip factory in Villach, Austria — what it calls the world's first high-volume manufacturing facility for GaN power semiconductors built on 300-millimeter wafers. The Munich-based chipmaker announced the investment at a news conference in Vienna on Tuesday. Production is scheduled to start by the end of 2027, with spending running through 2034 into existing cleanroom space at the site.

Why move to 300-millimeter wafers?

The wafer transition is the heart of the announcement. According to Infineon, a 300-millimeter wafer yields 2.3 times as many chips as the 200-millimeter wafers commonly used for GaN today. The company processed its first 300-millimeter GaN wafers two years ago; now the technology moves into mass production, with the ramp-up aligned to market demand, Infineon said.

"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 at the announcement.

Gallium nitride switches and converts power faster and more efficiently than conventional silicon, which means smaller devices, lower energy losses and less heat. Infineon is chasing four markets in particular:

• AI data centers: more efficient power supplies for servers whose energy needs are growing fast
• Energy infrastructure: solar installations and grid technology
• E-mobility and robotics: more compact drives and charging systems
• Consumer electronics: smaller, faster chargers

The market research firm Yole Group expects the GaN power semiconductor market to grow to roughly $3.5 billion (about €3.1 billion) by 2031 — roughly 35 percent growth a year.

What do the subsidies buy — and not buy?

The European Chips Act is supporting the project with €319 million. The European Commission has already approved the state aid; formal sign-off from Austria's economy ministry is still pending.

Politicians showed up accordingly. Chancellor Christian Stocker called the plant "one of the largest single investments in the history of Austria's high-tech industry." Economy Minister Wolfgang Hattmannsdorfer noted that Europe accounts for only around 10 percent of global chip production, and said the aid would be granted "subject to clear funding criteria for the location."

One thing the billion euros won't buy is new jobs. Sabine Herlitschka, chief executive of Infineon Austria, said the investment would secure existing positions rather than add to them, according to the news agency dpa. Infineon Austria employs about 5,800 people, roughly 4,800 of them in Villach.

Because the plant slots into existing cleanrooms, the project also stays far smaller than Infineon's new factory in Dresden, opened this summer at around €5 billion — still the largest single investment in the company's history.

The timing is awkward. Infineon shares have lost about 40 percent since mid-June, and chip stocks broadly remain under pressure.

Can Infineon outrun the Chinese price war?

The GaN market has been churning. TSMC, the world's largest contract chipmaker, has said it will exit the GaN foundry business by mid-2027, partly because of price pressure from Chinese rivals, TrendForce reported. The most important challenger is China's Innoscience, which describes itself as the largest GaN manufacturer on 200-millimeter wafers. Navitas in the U.S., STMicroelectronics and Texas Instruments are all working on GaN power chips as well.

Infineon's wager is straightforward: the early jump to 300-millimeter wafers delivers a unit-cost edge that 200-millimeter rivals can't match. If Villach ramps on schedule by the end of 2027, the company will enter a consolidating market with the largest wafers and the first high-volume line — just as TSMC walks away.