EL7.AI
StocksMedium•31 October 2026•
3 min read

EU Approval Clears Way for Infineon’s €1.1 Billion Investment in Villach

Key Facts

1Infineon plans to invest about €1.1 billion in existing cleanroom facilities in Villach through 2034.
2Production is scheduled to start by the end of 2027.
3A 300 mm wafer produces 2.3 times as many chips as a 200 mm wafer.
4The power GaN semiconductor market could reach about $3.5 billion by 2031, with annual growth of about 35% from 2025–2031.

The European Commission has approved Austrian state aid to upgrade Infineon’s existing facility in Villach, paving the way for the company to invest about €1.1 billion in cleanroom facilities at the site through 2034. The project aims to bring power electronics made from gallium nitride into volume production using 300 mm wafers. Infineon said production is scheduled to start by the end of 2027, drawing on existing infrastructure and planned upgrades. The Commission’s approval of the aid is separate from Austria’s formal funding commitment, which the company said is expected within the stipulated time frame. The company’s chief executive said high-volume manufacturing on 300 mm wafers would make Infineon, in his words, the first company globally to bring GaN power electronics into volume production.

The expansion plan rests on a specific production advantage linked to wafer size: Infineon said a 300 mm wafer enables production of 2.3 times as many chips as a 200 mm wafer. The figure refers to the number of chips per wafer, not a general increase in productivity, clarifying the technical basis for efficiently raising manufacturing capacity. The company said combining existing and upgraded infrastructure would allow it to expand capacity efficiently and cost-effectively. The project will therefore develop the existing Villach facility rather than build a new site, while the announced production start remains the end of 2027. The planned investment in cleanroom facilities runs through 2034.

Infineon linked the investment to rapidly growing demand for high-performance power supply solutions, which serve applications requiring efficient power management. Target markets include AI data centers, energy infrastructure, electric mobility, robotics and consumer electronics. The company estimated, citing Yole Research, that the power GaN semiconductor market could reach about $3.5 billion by 2031. That would represent annual growth of about 35% from 2025 to 2031, according to the same estimate. This market forecast provides context for the production expansion decision, while the project’s ability to meet demand will depend on reaching volume manufacturing on the announced schedule.

The current expansion follows earlier pilot work at the site. In 2024, Infineon announced the development of 300 mm GaN power wafer technology and said it had manufactured the wafers on a fully integrated pilot line within its existing silicon wafer production facility in Villach. In an update on fiscal 2025, the company said the first test products were delivered to customers in October 2025 for evaluation. Applications it cited at the time included AI data centers, robotics, renewable energy, mobility and industry. Those steps provide background on the transition from development and testing to the large-scale manufacturing targeted by the new plan. Infineon said commercial production is scheduled to start by the end of 2027, while Austria’s formal funding commitment remains expected within the stipulated time frame.