German semiconductor manufacturer Infineon Technologies is investing US$1.23 billion (€1.1 billion) to expand its chip manufacturing plant in Villach, Austria. Infineon aims to strengthen European chip production as demand for energy-efficient technologies and artificial intelligence infrastructure continues to grow.
The investment will support the development of advanced gallium nitride (GaN) power semiconductor manufacturing capacity at the Infineon’s Austrian site. The facility is also expected to use 300-millimeter wafers to manufacture next-generation power chips. Production is scheduled to begin by the end of 2027 while the investment program is expected to extend through 2034.
Infineon Austrian Chip Manufacturing Facility Expansion
The expansion comes as data centres, particularly those supporting artificial intelligence workloads, require increasingly efficient power conversion and management systems. The pace with which data centres continue to scale-up is also increasing, with expansions such as AirTrunk’s SYD3 hyperscale data centre project in Sydney, Australia progressing wiht development. GaN semiconductors can switch electrical power faster and with lower energy losses than conventional silicon-based technologies in suitable applications. This makes them valuable for high-efficiency power supplies and other demanding electronic systems.
The new manufacturing line is expected to use existing cleanroom capacity at Villach. This will allow Infineon to expand production without relying entirely on the construction of a completely new factory.
The use of 300-millimeter wafers also offers a manufacturing efficiency advantage, as each wafer can yield approximately 2.3 times as many chips as a 200-millimeter wafer. However, this depends on the chip design and production process.
Infineon’s Manufacturing Footprint in Europe
Additionally, the project also builds on Infineon’s established manufacturing footprint in Villach, where the company opened a €1.6 billion power semiconductor factory in 2021. The site serves as a major centre for power electronics research and production. It has expertise spanning silicon, silicon carbide and gallium nitride technologies.
The latest investment also aligns with Infineon’s wider strategy to strengthen its position in power management technologies for AI infrastructure. On October 21, 2026, the company announced a collaboration with NVIDIA on GaN-based power conversion systems for 800-volt direct-current AI data centres. This continues to highlight the growing importance of advanced power electronics as computing infrastructure expands.
The expansion is also expected to reinforce Austria’s role in Europe’s semiconductor supply chain. This is while supporting the development of technologies used in data centres, energy infrastructure, electric mobility, robotics and consumer electronics.
However, further details on the expansion’s construction schedule, additional employment and expected production capacity have not been confirmed yet.
Infineon Villach Semiconductor Chip Manufacturing Plant Expansion Project Fact Sheet
Location: Villach, Carinthia, Austria
Developer and investor: Infineon Technologies AG
Investment: €1.1 billion (US$1.23 billion)
Project type: Semiconductor manufacturing capacity expansion
Technology: Gallium nitride (GaN) power semiconductors
Wafer technology: 300-millimeter wafers
Expected production start: End of 2027
Investment program: Extending through 2034
Primary applications: AI data centres, energy infrastructure, electric vehicles, robotics and consumer electronics
Existing infrastructure: The expansion is expected to use existing cleanroom capacity at Villach
Project status: Investment announced. Expansion and production milestones remain subject to further details.
Project Team
Project owner, investor and technology developer: Infineon Technologies AG
Austrian operating subsidiary: Infineon Technologies Austria AG
Manufacturing location: Infineon’s Villach Innovation Factory
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