The €5 billion investment will boost semiconductor capacity in Europe.
The European Commission has approved funding under the EU Chips Act for the Smart Power Fab of Infineon Technologies AG in Dresden. This key project in the semiconductor sector already has support through the innovation program IPCEI ME/CT (Important Project of Common European Interest on Microelectronics and Communication Technologies). Final approval from the Federal Ministry for Economic Affairs and Climate Action of Germany (BMWK), responsible for distributing these funds, is expected to be finalized in the coming months.
The total funding for the development in Dresden amounts to €1 billion, while Infineon’s overall investment at this site will reach €5 billion. Construction began in March 2023 and is progressing as planned, with an inauguration scheduled for 2026.
Europe strengthens its leadership in semiconductors
The investment, backed by the German government and driven by the EU Chips Act, reinforces the position of Dresden, Germany, and Europe as a strategic hub for the semiconductor industry. According to Jochen Hanebeck, CEO of Infineon:
“This government-supported investment strengthens Europe as a hub for innovation and cutting-edge microelectronics production. We are increasing semiconductor capacity in the region, contributing to the stability of supply chains in key sectors such as automotive, security, and industry.”
Job creation and economic impact
The Smart Power Fab is set to generate up to 1,000 new direct jobs, not including indirect jobs within the investment ecosystem. Experts estimate a job multiplier effect of 1:6, meaning that for each direct position, six additional jobs will be created in the value chain.
The primary goal of this new plant is to drive technologies that accelerate decarbonization and digitalization, through energy-efficient solutions applied to Artificial Intelligence and other industrial sectors.
Investment in innovation and collaboration with universities
In addition to expanding its production capacity, Infineon is utilizing funds from the IPCEI ME/CT program to enhance research and development at other company locations. Between 2022 and 2027, the company will allocate €2.3 billion to innovative projects in Germany and Austria, focused on:
- Power electronics
- Analog and mixed-signal technologies
- Advanced sensors
- Radio frequency applications
Infineon has also announced initiatives to strengthen collaboration between science and industry. Strategic partnerships with European universities, research centers, and start-ups will be fostered, aimed at developing sustainable innovations and strengthening Europe’s technological ecosystem.
A strategic boost for the European semiconductor industry
The support from the EU Chips Act and the IPCEI ME/CT program not only strengthens Europe’s technological sovereignty but also lays the groundwork for sustainable growth in the semiconductor sector. With this investment, Infineon aims to consolidate its position as a leader in microelectronics, contributing to the stability of supply chains and the transition towards a more digital and sustainable economy.
With the opening of the Smart Power Fab in 2026, Europe is expected to strengthen its semiconductor manufacturing capacity, reducing reliance on external markets and positioning itself at the forefront of innovation in the technology sector.
Source: Infineon