Infineon Invests 1.1 Billion Euros in European Semiconductors in Villach, Austria
The technology group Infineon is making a historic statement for Europe as an industrial hub: By 2034, approximately 1.1 billion euros will be invested in Villach, Carinthia. There, Europe’s—and the world’s—first high-volume production facility for advanced gallium nitride power semiconductors on 300-millimeter wafers is being built. Supported by broad cooperation among political, business, and labor partners, this major project marks a milestone for Europe’s technological sovereignty.
Campeon: Infineon Headquarters in Neubiberg, near Munich. / Picture: © Wikimedia Commons; Rufus46, CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0/deed.en)
With this massive investment, Infineon is expanding its Villach plant into a global center of excellence for power semiconductors. The focus is on the semiconductor material gallium nitride (GaN), which delivers major efficiency gains over conventional silicon.
The highlight of the facility is its use of the advanced 300-millimeter wafer format. Two years ago, Infineon became the first company in the world to successfully run gallium nitride processes on these large wafers. Since the larger diameter allows for approximately 2.3 times as many chips per run compared to older 200-millimeter wafers, the new production facility operates much more cost-effectively and conserves resources.
Drivers for AI, the Energy Transition, and Electric Mobility
Global demand for energy-efficient chips is booming. The latest-generation power semiconductors manufactured in Villach are essential components for future technologies such as AI data centers designed to meet rapidly growing computing demands, modern energy infrastructures and power grids, as well as electric mobility and advanced robotics applications.
According to current market analyses (such as industry reports from Yole Intelligence), rapid growth is forecast for the market for GaN power semiconductors. With the planned start of production at the end of 2027, Infineon is perfectly positioned at the forefront of this development.
European Chips Act & Co-financing: Government Leverage for Europe’s Autonomy
Europe currently accounts for just under ten percent of global semiconductor production. To reduce dangerous strategic dependencies on Asia and the United States, the EU has launched the European Chips Act. This initiative aims to significantly increase Europe’s share of the global market and secure the continent’s technological sovereignty.
The 1.1-billion-euro project in Carinthia is therefore being substantially co-financed by the government under this EU framework. Of the total amount, the Republic of Austria is contributing 319 million euros in funding, which was recently approved by the European Commission. Economics Minister Wolfgang Hattmannsdorfer emphasizes that funding amounting to just under 29 percent represents a highly efficient use of public funds. For every job in the semiconductor industry, up to six additional jobs are created in supplier companies, logistics, and the service sector. It acts as a catalyst to retain private capital in the country over the long term and secure highly skilled jobs.
Infineon Austria CEO Sabine Herlitschka emphasized that excellent research is directly translated into industrial value creation here, which secures highly skilled jobs in the long term.
Widespread Support from the Region and the Business Community
In addition to federal policymakers, the Carinthian state government, the social partners, and the Federation of Austrian Industries are also highly satisfied. Carinthia’s Governor Daniel Fellner spoke of a “historic milestone for Carinthia as a high-tech hub and an unmistakable signal to the global tech world.” Chamber of Commerce President Jürgen Mandl and Director Meinrad Höfferer highlighted accompanying measures in this context—including the extensive remediation of an old landfill site (Auen), which was reactivated as a construction and development site for the project.
Representatives of the workforce (such as GPA Chairwoman Barbara Teiber) and the Federation of Austrian Industries (President Georg Knill) emphasized that targeted government co-financing and reliable framework conditions (such as competitive energy prices and securing a skilled workforce) are key to keeping Europe competitive in the global race for business locations.
This forward-looking project in Villach, Austria, impressively demonstrates that, despite challenging global conditions, it is possible to actively shape European technological sovereignty and establish global beacons of innovation.
Infineon Austria: From an “extended workbench” to a global research beacon
The history of Infineon in Austria illustrates Villach’s rise as an international tech hub. The story dates back to 1970, when Siemens established a modest diode manufacturing facility with 24 employees in Villach. In 1997, Villach was designated as Siemens’ global center of excellence for power electronics. When Siemens spun off its semiconductor division in 1999, Infineon Technologies AG was formed.
Today, Infineon Austria employs approximately 5,800 people (of whom about 4,800 work directly at the Villach site). With branches in Villach, Graz, Linz, Klagenfurt, and Vienna, as well as an annual research budget of hundreds of millions of euros, Infineon Austria is considered the most research-intensive industrial company in Austria.
A German Heavyweight at the Heart of Austrian Industry
These close ties underscore the dynamism of the German-Austrian economic region. Infineon Technologies AG, headquartered in Neubiberg near Munich, is Germany’s largest and one of the world’s leading semiconductor manufacturers.
Although the corporate headquarters is located in Bavaria, the German semiconductor giant has chosen Villach, of all places, as its global hub for power semiconductors. The fact that Infineon CEO Jochen Hanebeck and Infineon Austria CEO Sabine Herlitschka are driving the expansion in Austria demonstrates the great confidence in the Austrian ecosystem of top-tier professionals, university partnerships, and stable infrastructure. It proves that cross-border capital and regional high-tech expertise can create European success stories.