Infineon to Invest €1.1 Billion to Expand 300 mm Gallium Nitride Chip Production in Austria
Key Facts
Infineon said on October 27, 2026, it would invest about €1.1 billion in existing cleanroom facilities in Villach, Austria, to expand production of gallium nitride semiconductors on 300 mm wafers. The investment runs through 2034, making the project a long-term industrial expansion plan rather than immediate spending or the construction of an entirely new factory. Chief Executive Jochen Hanebeck said the project “paves the way for the widespread use of gallium nitride” in areas including artificial intelligence, energy infrastructure, electric mobility and robotics. Production is scheduled to begin by the end of 2027, the company said. Output increases will track market demand, linking commercial expansion to the evolution of demand for these chips.
The project is based on manufacturing gallium wafers with a diameter of 300 mm, a shift Infineon says improves output per wafer compared with the smaller size currently in use. The larger wafer produces 2.3 times as many chips as a 200 mm wafer, according to the company. This increase allows production capacity to be expanded using fewer wafers for each chip produced, while Infineon plans to make use of existing cleanrooms and upgrade their infrastructure. The company said combining existing and upgraded infrastructure would allow manufacturing to be expanded “with high efficiency and cost-effectively.” The project places Villach’s expansion within a strategy of increasing production capacity by raising the output of its available industrial infrastructure.
The project’s importance is tied to the power semiconductor sector, where Infineon expects the GaN chip market to grow rapidly. The company cited an estimate by Yole Group that the market will reach about $3.5 billion by 2031. The report projects annual growth of about 35% from 2025 to 2031. These estimates provide a commercial backdrop for the Villach expansion, but remain market forecasts rather than a measure of confirmed orders for the site’s output. Hanebeck linked the chips to a range of applications extending beyond data centres to include energy, electric mobility and robotics.
Infineon announced a partnership with Nvidia on October 21 to develop power infrastructure for AI data centres, a separate initiative from the Villach investment announcement. The companies first announced their collaboration in May 2025. It focuses on an 800-volt direct-current distribution architecture for server racks, with power conversion close to the AI processor. In October 2026, the partnership expanded to include high-voltage intermediate bus converters based on GaN. Infineon said the technology allows the converter stage’s switching frequency to rise to as much as 1 megahertz, helping reduce the size of magnetic and passive components and improve power density. The partnership illustrates one application for power chips in data-centre systems, but is not part of the Austrian investment announcement.
In a separate announcement on October 26, Infineon said it would supply Enphase with 900-volt, monolithic bidirectional GaN switches to develop solid-state transformer units for AI data centres. The company said the devices had passed testing and were being integrated into Enphase’s “IQ SST” product development. Production qualification is still expected at a later stage, meaning the announcement concerns product development and potential supply, not commercial production already under way. This collaboration differs from the Nvidia partnership in product type and timing, and both differ from the industrial expansion project in Villach. The three initiatives are linked by their application of power technologies in data centres, while each announcement remains a separate track.
Infineon shares rose about 1% in early Frankfurt trading on the day of the investment announcement, according to Reuters. The move followed a decline of about 40% from mid-June through October 27, the same report said. These data do not support the 2.3% gain cited in the first draft. In EL7 data, Nvidia shares closed at $213.66 on October 29, 2026. The price came after Nvidia’s partnership announcement with Infineon, but does not establish the partnership’s effect on the share performance.
Infineon’s next milestone is the release of its fourth-quarter and fiscal 2026 results on November 10, according to the company’s events calendar, which lists the date as preliminary. The results will provide a near-term financial disclosure after the Villach project announcement, while production at the project remains targeted to begin at the end of 2027. Infineon says output increases will track market demand, making demand trends a factor in the expansion path after manufacturing begins. The investment plan runs through 2034, a timeline far longer than the next financial results date. Monitoring the project therefore spans near-term financial performance updates and industrial execution and production over the following years.