EU approves €319 million in state aid to Austrian 'first of a kind' next generation semiconductor factory

The European Commission has greenlit a €319 million investment from Austrian state funds, earmarked for Infineon Technologies to upgrade its factory in Villach. This €1.1 billion expansion will enable the semiconductor giant to ramp up production and become the world's first manufacturer of next-generation gallium nitride (GaN) power semiconductors on 300-millimetre wafers.

The EU's Chips Act, the driving force behind this financial support, aims to bolster the EU's semiconductor industry, reduce reliance on imports from third countries, and cement its role as a global technology leader alongside the US and China. The EU intends to broaden its share of global semiconductor production from 10% in 2023 to 20% by 2030.

Infineon's investment in Villach marks a significant commitment to the European semiconductor ecosystem, ensuring that semiconductor innovation won't be confined to Asia or the United States. CEO Jochen Hanebeck emphasized that this massive project establishes the site as a global competence center for power semiconductors, offering energy-efficient, high-performance solutions for various industries, including smartphones, electric vehicles, AI data centers, and renewable energy systems. This milestone is expected to be achieved by 2034.