The European Commission has approved €319 million in Austrian state aid for German semiconductor manufacturer Infineon Technologies to upgrade its factory in Villach, Austria. The company plans to invest €1.1 billion in the project, Euronews reported.
The upgraded facility will produce next-generation gallium nitride (GaN) power semiconductors using 300-millimeter wafers. According to Infineon, it will become the world’s first high-volume manufacturing facility for this type of chip.
GaN semiconductors are used in smartphone chargers, electric vehicles, AI data centers and renewable energy systems. They offer higher energy efficiency and faster switching speeds compared with conventional silicon chips.
The funding was approved under the EU Chips Act, which aims to reduce Europe’s dependence on imported semiconductors. The EU aims to increase its share of global chip production from 10% in 2023 to 20% by 2030.
Using 300-millimeter wafers will let Infineon produce about 2.3 times as many chips per wafer as with conventional 200-millimeter wafers, helping reduce production costs. The company expects to complete the factory upgrade by 2034.
Last year, the Dutch government temporarily intervened in the operations of Nexperia, a Chinese-owned semiconductor company based in Nijmegen, amid concerns over chip supplies. The company produces chips widely used by automakers, with much of its European production sent to China for assembly and packaging. Following the dispute with Dutch authorities, China eased export restrictions, allowing shipments of certain Nexperia chips to resume.
