€319m in Austrian state aid is being granted to Infineon Technologies to upgrade its semiconductor factory.
The factory is set to receive a €1.1bn upgrade, creating what it claims is the world’s first high-volume manufacturing facility for next-generation semiconductors.
These are gallium nitride (GaN) power semiconductors on 300mm wafers, something Infineon says it was the first company to achieve in 2024.
GaN semiconductors are becoming increasingly important
Since 2024, these semiconductors have been used more and more as they replace silicon in power electronics. They can handle higher voltages, switch faster, and operate at higher temperatures, all while using less energy.
Current uses include device chargers, AI data centres, electric vehicles, solar panels, wind turbines, 5G and 6G telecoms base stations, and robotics.
Their wafers are larger than the standard 200mm wafers, which allows for 2.3x more individual chips to be made per wafer and lowers manufacturing costs.
The European Commission will now fund Infineon to scale up production of these chips. In its announcement on 28 October, the measure falls under the EU’s Chips Act, and will “strengthen the EU’s position and autonomy in the semiconductor value chain.”
The Chips Act aims to boost the EU’s share of global semiconductor production from 10% in 2023 to 20% by 2030, while increasing domestic suppliers and demand for European-made chips.
Infineon, which currently holds a 29% market share in the power systems sector and 50% in the automotive chips sector, says this investment and factory upgrade in Villach will turn the facility into a “global competence centre for power semiconductors”.
“A strong commitment to Austria”
Christian Stocker, the Austrian chancellor, said: “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.”
Jochen Hanebeck, CEO of Infineon Technologies AG, added: “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.”
European policy is pushing to make more chips, including semiconductors, to reduce reliance on outside production and secure its business future. Dr. Luigi Capoani and Alberto Corso of the European Youth Think Tank wrote for INN about how the EU should approach this and what it needs to focus on to achieve the best results.
