Largest single investment
Infineon wants to build a new plant in Dresden
11/14/2022, 6:27 p.m
The EU and the federal government are funding the expansion of the chip industry with billions. Infineon is now announcing a new production facility in Dresden – provided funding is available. The company sends an optimistic long-term forecast to back it up.
The chip manufacturer Infineon is building a new plant in Dresden for five billion euros. The 300-millimeter production capacity for analog and mixed-signal chips as well as for power semiconductors should thus be expanded, the company announced in Munich. It is the largest single investment in the company’s history. This could create up to 1000 jobs. The supervisory board approved the expansion of production. “The planned production site is Dresden, subject to appropriate public funding,” the statement said. The factory could go into operation in autumn 2026.
Saxony’s Prime Minister Michael Kretschmer spoke of a promise for the future. “Microelectronics is the key technology. For decades, Saxony has promoted this industry of the future through investments in science,” said the CDU politician.
In February, the EU launched the “European Chips Act”. It enables billions in subsidies from public and private sources in the European Union. The US chip manufacturer Intel then decided to build a chip area in Magdeburg for 17 billion euros. Almost seven billion euros in aid come from the federal government alone. In October, “Capital” reported that the Taiwanese semiconductor group TSMC is pushing ahead with plans for its own production in Germany and is also considering building a plant in Dresden.
DAX group raises expectations
At the same time, the Munich semiconductor manufacturer increased its long-term growth targets. In the future, revenues are expected to increase by more than ten percent per year, which is one percentage point more than previously predicted. The automotive, industrial and renewable energy markets, which Infineon mainly supplies with its chips, showed “increasing dynamics and permanently strong growth factors”, the company justified the investment and the increase in its goals. At 25 (previously: 19) percent, the operating return on sales (segment result margin) should be significantly higher than previously expected.
For the current fiscal year (until the end of September), Infineon expects a margin of 24 percent, sales are expected to increase to 15.5 billion euros with a range of 500 million in both directions. “The 2023 fiscal year that has just begun has got off to a good start,” said Infineon CEO Jochen Hanebeck. Nevertheless, vigilance is required in view of the economic and political uncertainties.
In 2022, annual sales soared by 29 percent to 14.2 billion euros. The segment result improved by 63 percent to 3.4 billion euros. The company clearly exceeded analysts’ expectations. The shareholders are to receive 32 cents per share for the past year – 5 cents more than in the previous year. The stock rose significantly after the numbers.