Infineon Puts €1.1 Billion Into World's First 300mm GaN Fab

Infineon Technologies AG will invest around €1.1 billion by 2034 to build the world's first high-volume manufacturing facility for gallium nitride power semiconductors on 300-millimetre wafers in Europe. Production is scheduled to start by the end of 2027 at the company's existing Villach site in Austria. The European Commission has approved €319 million in state aid under the European Chips Act to support the project.

The German chipmaker will spend the money on cleanroom facilities at Villach, an existing site it can expand without building from scratch. Infineon said leveraging existing and upgraded infrastructure enables highly efficient and cost-effective expansion of manufacturing capacity.

Why 300-millimetre wafers matter

Infineon processed the world's first 300-millimetre gallium nitride wafers two years ago, a technological milestone it now transfers to customer-serving volume production. The larger wafer diameter yields 2.3 times as many chips per wafer compared with 200-millimetre production, making output significantly more efficient.

Gallium nitride switches and converts electricity much more efficiently than conventional semiconductor materials. The gains enable smaller, more powerful and more energy-efficient systems with lower energy loss and reduced heat generation. Infineon targets demand from AI data centers, energy infrastructure, e-mobility, robotics and consumer electronics.

CEO Jochen Hanebeck said: "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-millimetre wafers, we will be the first company in the world to bring gallium nitride power electronics into volume production."

He added: "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."

What does the state aid cover?

The European Commission approved €319 million in support. The formal funding commitment by the Austrian Federal Ministry for Economic Affairs, Energy and Tourism is expected within the stipulated time limits. The Commission said the aid generates positive spillover effects in related sectors, including:

• Cross-border collaboration with universities and research institutions
• Improved access to innovative technologies and products for start-ups and small and medium-sized enterprises

Austrian Federal Chancellor Christian Stocker called the deal 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," Stocker said.

Sabine Herlitschka, CEO of Infineon Technologies Austria AG, framed the project as a flagship for turning research into industrial value creation. "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," Herlitschka said.

How big is the Villach operation?

Infineon Austria currently employs around 5,800 people, approximately 4,800 of them at Villach. The investment strengthens Villach's role as a global competence center for power electronics and new semiconductor materials. The new 300-millimetre GaN line will create synergies with the power electronics research and development activities already located at the site.

What is the market outlook?

Analysts expect the GaN power semiconductor market to grow to approximately USD 3.5 billion by 2031, representing annual growth of around 35 percent between 2025 and 2031. That trajectory, driven by power-hungry AI data centers and electrified transport, underpins Infineon's bet that 300-millimetre GaN volume production in Europe can capture share ahead of Asian and American rivals.