Infineon targets start of power gallium chip production in Villach by end-2027
Key Facts
Infineon is targeting the start of production at its new power gallium chip facility in Villach, Austria, by the end of 2027, as part of an industrial expansion aimed at applications including AI data centers, energy infrastructure and electric mobility. The company said building a high-volume production line using 300-millimeter wafers would make it the first to bring gallium nitride power electronics into volume production. The project comes as technology companies turn to data centers that require more efficient power supplies. Robotics and consumer electronics are also among the applications targeted by the new chips, according to the company. The announced timeline gives investors an indication that the expected impact of the industrial expansion will begin more than a year from now.
The plan is based on 300-millimeter wafers, which Infineon said enable it to produce 2.3 times as many chips per wafer as 200-millimeter wafers. This technical difference means greater capacity to produce chips from each wafer, supporting the shift to high-volume manufacturing. The company is betting that improving energy efficiency in the targeted applications will boost the use of gallium nitride technology. Those applications include AI data centers, as well as energy infrastructure, electric mobility, robotics and consumer electronics. Chief Executive Joachim Hanebeck said the project strengthens Europe’s semiconductor ecosystem and that the company would be the first to bring these electronics into volume production.
The project has the backing of the Austrian government, which the European Commission approved at a value of 319 million euros, according to Infineon. The company said the official grant from Austria’s Ministry of Economy, Energy and Tourism had been expected within the specified time frame. The Commission’s approval constitutes authorization of the proposed state aid, while issuance of the official grant remains a separate step, according to the company’s clarification. This public funding places the project in the context of Europe’s efforts to strengthen its capacity to produce semiconductors within the region. Hanebeck linked the investment to strengthening Europe’s chip ecosystem, with the project focused on producing power components for growing sectors.
Villach’s plans come as Infineon is counting on demand related to AI data centers to support its business. The company recorded record revenue of 4.172 billion euros in the third quarter of its 2026 fiscal year, and segment result of 797 million euros, with a margin of 19.1%. It said strong demand for data center power supply solutions remained its most important growth driver. In its fourth-quarter outlook, it forecast revenue to rise by about 13% to nearly 4.7 billion euros, with a segment result margin of about 23%. It also expected 2026 fiscal-year revenue of around 16.3 billion euros, after raising its forecast following its third-quarter results.
Semiconductor stocks came under pressure in the November 5 session, with Infineon shares falling 8.5% as technology stocks declined, according to Reuters coverage carried by MarketScreener. Axios coverage linked the selloff in technology stocks to concerns about a slowdown in the AI boom and growing political resistance to data center expansion after Democratic gains in the midterm elections. The following day, some losses in U.S. AI stocks were reversed and the Nasdaq rose 1.1%, while Germany’s DAX lost 1.9%, according to the Associated Press. These moves did not provide evidence that the investment announcement was what moved Infineon shares in Friday’s session. The market’s assessment of the company also remains tied to its reported results and operating outlook.
Investors are now focused on fourth-quarter and 2026 fiscal-year results, scheduled for release on November 10 at 7:30 Central European Time, according to the company’s calendar. The results will provide a near-term opportunity to compare actual performance with Infineon’s published forecasts for revenue and segment result margin. The company had forecast annual revenue of around 16.3 billion euros for the 2026 fiscal year. Production at the Villach facility, meanwhile, is targeted to begin by the end of 2027. The upcoming results combine an imminent financial update with an industrial expansion project whose operational impact will extend into a later period.