Infineon: World's Largest Fab for Power Semiconductors

Infineon Technologies has opened its new ‘Smart Power Fab’ in Dresden, Germany, and, with an investment volume of €5bn (US$5.69bn), it is the largest single investment in Infineon's history.

Multiple semiconductor fabs are set to open in Dresden over the coming years and the EU has funnelled billions into securing a stable supply of European chips which it sees as critical to its technological sovereignty. 

Dresden is Europe’s largest hub for semiconductor manufacturing; it is known as ‘Silicon Saxony’ and considered Europe's most successful microelectronics cluster.

The Smart Power fab

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. 

Its new fab doubles manufacturing capacities at the site. Infineon says it creates the world's largest factory for intelligent power semiconductors and analog / mixed-signal technologies. 

Jochen Hanebeck, CEO of Infineon, says: "We're 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 centers 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 analog / mixed-signal technologies."

The project is one of the largest investment projects in Germany and creates 1,000 direct jobs.

Europe’s US$80bn investment in chips

The global semiconductor market reached US$796bn in 2025, following record growth driven by demand for data centres, artificial intelligence systems and advanced logic and memory chips, according to data from the European Commission. 

The EU is investing heavily in the sector to try and secure its future technological sovereignty using the European Chips Act. 

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 powering research and manufacturing in semiconductors across Europe.

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."

Bloomberg reported that Infineon’s project in Dresden is a major recipient of EU Chips Act funds and received about €1bn (US$1.145bn) in subsidies.

The semiconductor supply chain

Infineon says that the interaction between power semiconductors and analog / mixed-signal components enables especially energy-efficient and intelligent system solutions, hence the ‘Smart Power Fab’ name.

Infineon’s chips made in Dresden will contribute to the efficient supply of power to AI data centres.

The chips are also used in other industrial and automotive applications, such as wind and solar power systems and software-defined vehicles. 

Moody’s says that the average car now carries more than 1,700 chips, supporting everything from powertrain control and battery management to safety systems, connectivity and infotainment.