How Infineon is Increasing Semiconductor Supply With New Hub
Infineon Technologies has opened a €5bn (US$5.69bn) facility in Dresden, Germany. Deemed the 'Smart Power Fab', it is the company's largest single investment to date.
The new factory doubles manufacturing capacity at Infineon's Dresden site, allegedly creating the world's largest production facility for power semiconductors and analogue or mixed-signal technologies.
It also could create up to 1,000 jobs in what is Europe's largest chip hub.
Europe's chip supply strategy
Multiple semiconductor facilities could open in Dresden over the coming years. The EU has allocated funding to secure a stable supply of European chips, which it views as necessary for technological sovereignty.
Dresden is Europe's largest semiconductor manufacturing hub. The city is known as Silicon Saxony and is considered Europe's most successful microelectronics cluster.
According to Semi, a market intelligence group for semiconductors, the European Chips Act has catalysed a total of €69bn (US$80bn) in public and private investments in semiconductor research and manufacturing across Europe. Bloomberg reported that Infineon's Dresden project received about €1bn (US$1.145bn) in subsidies under the EU Chips Act.
According to data from the European Commission, the global semiconductor market reached US$796bn in 2025. The growth was driven by demand for data centres, artificial intelligence systems and advanced logic and memory chips.
- Dresden is a critical location to Europe’s plans for a stable semiconductor supply chain.
- Last month, GlobalFoundries and Qualinx announced the successful completion of an end-to-end semiconductor manufacturing flow at GlobalFoundries’ fab there.
Manufacturing capacity and applications
Infineon's Dresden production site was founded in 1994, when the company was still part of Siemens. In Dresden, Infineon manufactures more than 400 different products based on 200mm and 300mm wafers.
Jochen Hanebeck, Chief Executive Officer of Infineon, says: "We are opening our new plant at just the right time. Our Smart Power Fab is creating urgently needed capacities for the key technologies of the future, for everything from energy supply for AI data centres to software-defined vehicles and renewable energies.
"Infineon is thus giving an important impulse in making the global AI revolution possible and securing supply chains in critical industries. By taking this step, we are strengthening our global vanguard position as a leading manufacturer of power semiconductors and analogue / mixed-signal technologies."
Chips for industrial applications
According to Infineon, the interaction between power semiconductors and the components enables energy-efficient and intelligent system solutions. Infineon's chips made in Dresden will contribute to the power supply for AI data centres.
The chips are also used in other industrial and automotive applications. These include wind and solar power systems and software-defined vehicles.
"Our Smart Power Fab is creating urgently needed capacities for the key technologies of the future, for everything from energy supply for AI data centers to software-defined vehicles and renewable energies."
According to Moody's, the average car now carries more than 1,700 chips. The chips support powertrain control, battery management, safety systems, connectivity and infotainment.
Dr Karsten Wildberger, German Federal Minister for Digital Transformation and Government Modernisation, says: "What is being produced here in Dresden secures jobs and creates value in Germany, because these cutting-edge chips are at the heart of key technologies such as electric vehicles, wind turbines and the power infrastructure for AI data centres.
"The Smart Power Fab marks another milestone on Germany's path toward digital sovereignty and demonstrates that Germany can move fast, Germany can deliver high-tech innovation and Germany can shape the future."
