Infineon to Boost Investment in Semiconductor Technologies in the Year Ahead

October 19, 2021 by Shannon Cuthrell

Chip giant Infineon is planning a significant boost to its investments in factory expansions over the next year.

German semiconductor giant Infineon Technologies recently announced it’s increasing its expansion-related investments to 2.4 billion euros (or about $2.7 billion USD) over the next year.

Infineon’s new chip factory in Villach, Austria. (Photo courtesy of Infineon Technologies)

The announcement was made earlier this month at Infineon’s Capital Markets Day event, in which it confirmed its preliminary fiscal year 2021 guidance with 1.6 billion euros in investments to property, plants and equipment, and other costs. The investments planned for 2022 mark a 50% jump from that figure, as the company secures more production capacity to meet growing market demand. 

Infineon is also forecasting 2021 revenues topping 11 billion euros (or $12.7 billion USD), up from 8.5 billion euros reported in 2020.

A slide from Infineon’s series of presentations to investors in October. (Image via Infineon)

In a statement, Infineon CEO Reinhard Ploss cited carbon emissions reduction and the demand for secure and smart-connected systems as major trends across semiconductor end-markets, feeding into Infineon’s upcoming growth plans.

“Infineon is successfully managing the cycle and has leading positions in multiple markets with long-duration structural growth drivers,” Ploss added. “2022 is shaping up to be a strong year; we are continuing our profitable growth journey and sustainable value creation.”

Infineon CFO Sven Schneider told Reuters that the investments would initially focus on the company’s existing plants. While the company is considering adding more capacity, Schneider said it’s too early to make a decision. 

One presentation on Capital Markets Day noted expansions to Infineon’s SiC (Silicon Carbide) and GaN (Gallium Nitride) production plants, to meet the growing demand for power electronics materials. It recently opened a 300-mm wafer factory in Villach, Austria, reflecting an investment of 1.6 billion euros. The presentation also mentioned expansions at its site in Kulim, Malaysia.

A slide from Infineon’s series of presentations to investors in October. (Image via Infineon)

Despite strong market demand, Infineon’s overall revenue only grew by 1% in the third quarter of 2021. The company attributed the limited growth to pandemic-related constrictions on its Malaysian manufacturing capacity and the historic winter storm in Austin, Texas, last February. These issues primarily impacted its automotive and power and sensor systems segments, which recorded revenue declines of 1% and 4%, respectively. Both segments account for the bulk of Infineon’s group-wide revenue, with automotive claiming 44% and power and sensor systems claiming 28%. 

Still, revenue in Infineon’s industrial power control and connected secure systems segments grew by 14% and 5%, respectively, in the third quarter.