Automotive supplier Infineon invests billions in semiconductor manufacturing
22 February 2022
Infineon, one of Europe’s largest chipmakers and leading supplier of semiconductors, will pour more than €2 billion into its Malaysian site. The move will help the German company generate billions in additional revenue.
Many of Infineon’s customers are carmakers, with the supplier being one of the winners emerging from the global chip crunch. The company has established itself as a market leader in power semiconductors, with the latest announcement underlying its plans to increase manufacturing capacities in Malaysia, one of its main hubs.
Focused on silicon carbide and gallium nitride (SiC and GaN) semiconductors, the Munich-based company said the multi-billion investment will allow it to build a module at its Malaysian site in Kulim. This strategic step will give Infineon the opportunity to make €2 billion in sales with products based on SiC and GaN semiconductors.
These kinds of components are known as wide bandgap semiconductors that differ from conventional chips, allowing for operation at higher voltages, temperatures, and frequencies. Last year, Infineon opened a new high-tech plant in Villach, Austria, to increase capacity in Europe, where carmakers are racing to get their hands on chips.
‘Innovative technologies and the use of green electrical energy are key in reducing carbon emissions. Renewable energies and electro-mobility are major drivers for a strong and sustainable rise in power semiconductor demand,’ said Jochen Hanebeck, COO at Infineon.
‘The expansion of our SiC and GaN capacity is readying Infineon for the acceleration of wide bandgap markets. We are creating a winning combination of our development competence centre in Villach and cost-effective production in Kulim for wide bandgap power semiconductors.’
Infineon delivers SiC-based products to more than 3,000 customers that use the components in a variety of applications, including industrial power supply, photovoltaic, transportation, drives, automotive and electric-vehicle charging. The company aims to book $1 billion (€880 billion) in revenues with SiC-based power semiconductors by 2025.
Meanwhile, the company added that the market for GaN is forecast to grow massively in the coming years – from $47 million in 2020 to $801 million in 2025, making it a money-spinning business for the chipmaker.
The company stated that construction in Malaysia will commence in June, with the first wafers leaving the fab in 2024. Infineon is not the only international company to expand manufacturing in the country. Automotive supplier Bosch is ramping up chip production at its Malaysian plants, last year earmarking €400 million for investments in microchip production in the country, as well as in its home market, Germany.
Malaysia is among the top 10 countries in the chip industry. It accounts for 7% of the global semiconductor trade and about 13% of global chip assembly testing and packaging, Reuters reports. Infineon’s latest investment drew attention from the local government.
‘Malaysia is one of Infineon’s main regional hubs and this further investment truly attests to our conducive ecosystem and the capability of our local talent to support long-term growth,’ said Malaysia’s Senior Minister and Minister of International Trade and Industry, Dato,’ said Seri Mohamed Azmin Ali.
‘The Government, through Malaysian Investment Development Authority (MIDA), will continue working closely with our strategic investors to solidify Malaysia’s prominence as a key semiconductor hub in the region.’