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German semiconductor manufacturer Infineon Technologies plans to invest around €1.1 billion in its Villach facility in Austria to establish what it describes as the world’s first high-volume manufacturing operation for gallium nitride (GaN) power semiconductors on 300-millimetre wafers.
Production is expected to begin by the end of 2027, with the investment programme extending through 2034.
Announced on October 27, 2026, the project will expand manufacturing capacity by upgrading existing cleanroom facilities. Infineon aims to meet growing demand for energy-efficient power electronics used in artificial intelligence (AI) data centres, electricity infrastructure, electric mobility, robotics and consumer electronics.
A key advantage of the project is the shift to larger wafers. Infineon says 300-millimetre wafers can produce approximately 2.3 times as many chips as 200-millimetre wafers. The larger format could improve manufacturing efficiency and support higher production volumes, although actual output will depend on production yields, capacity utilisation and customer demand.
Gallium nitride is a semiconductor material that enables efficient switching and conversion of electrical power. In suitable applications, GaN devices can reduce energy losses and heat generation compared with conventional silicon-based solutions, helping manufacturers develop smaller and more efficient power systems.
These characteristics are particularly relevant to AI data centres, where expanding computing workloads are increasing demand for efficient power delivery and thermal management. GaN technology also has applications in electric vehicles, renewable energy equipment, industrial systems and consumer electronics.
The European Commission has approved €319 million in Austrian state aid for the project under the European Chips Act. Infineon said the formal funding commitment from Austria’s Federal Ministry for Economic Affairs, Energy and Tourism was still expected. The approval should therefore not be interpreted as confirmation that the funds have already been disbursed. The investment is intended to strengthen Europe’s semiconductor manufacturing capabilities and support the region’s broader microelectronics ecosystem. It will also reinforce Villach’s role in power electronics manufacturing and research, building on the facility’s existing industrial and technological infrastructure.
The expansion comes as governments and chipmakers seek to strengthen semiconductor supply chains and expand regional production of strategically important components. For Europe, scaling up GaN manufacturing could improve access to advanced power semiconductors, although the project’s commercial impact will depend on production ramp-up and market adoption.
Infineon cited Yole Group’s Power GaN 2026 report, which projects that the power GaN semiconductor market could reach approximately €3.5 billion by 2031, with annual growth of around 35% between 2025 and 2031.
With production planned for late 2027, Infineon’s next challenge will be to translate its 300-millimetre wafer technology into reliable, high-volume manufacturing. The investment marks a significant step in that effort and positions the company to pursue opportunities in energy-efficient computing, electrification and industrial power systems.
Announced on October 27, 2026, the project will expand manufacturing capacity by upgrading existing cleanroom facilities. Infineon aims to meet growing demand for energy-efficient power electronics used in artificial intelligence (AI) data centres, electricity infrastructure, electric mobility, robotics and consumer electronics.
A key advantage of the project is the shift to larger wafers. Infineon says 300-millimetre wafers can produce approximately 2.3 times as many chips as 200-millimetre wafers. The larger format could improve manufacturing efficiency and support higher production volumes, although actual output will depend on production yields, capacity utilisation and customer demand.
Gallium nitride is a semiconductor material that enables efficient switching and conversion of electrical power. In suitable applications, GaN devices can reduce energy losses and heat generation compared with conventional silicon-based solutions, helping manufacturers develop smaller and more efficient power systems.
These characteristics are particularly relevant to AI data centres, where expanding computing workloads are increasing demand for efficient power delivery and thermal management. GaN technology also has applications in electric vehicles, renewable energy equipment, industrial systems and consumer electronics.
The European Commission has approved €319 million in Austrian state aid for the project under the European Chips Act. Infineon said the formal funding commitment from Austria’s Federal Ministry for Economic Affairs, Energy and Tourism was still expected. The approval should therefore not be interpreted as confirmation that the funds have already been disbursed. The investment is intended to strengthen Europe’s semiconductor manufacturing capabilities and support the region’s broader microelectronics ecosystem. It will also reinforce Villach’s role in power electronics manufacturing and research, building on the facility’s existing industrial and technological infrastructure.
The expansion comes as governments and chipmakers seek to strengthen semiconductor supply chains and expand regional production of strategically important components. For Europe, scaling up GaN manufacturing could improve access to advanced power semiconductors, although the project’s commercial impact will depend on production ramp-up and market adoption.
Infineon cited Yole Group’s Power GaN 2026 report, which projects that the power GaN semiconductor market could reach approximately €3.5 billion by 2031, with annual growth of around 35% between 2025 and 2031.
With production planned for late 2027, Infineon’s next challenge will be to translate its 300-millimetre wafer technology into reliable, high-volume manufacturing. The investment marks a significant step in that effort and positions the company to pursue opportunities in energy-efficient computing, electrification and industrial power systems.
