Infineon to boost fab spend over €1.5bn

June 08, 2018 // By Nick Flaherty
Infineon is increasing its investment in fab capacity by over 20% to capitalise on the growth in demand for power semiconductors.

The company is increasing its investment from 13% to 15% of revenue. That represents an increase from €918m in 2017 to €1.15bn this year. That doesn’t include a €700m investment in Villach, Austria.

This is being driven by automotive, industrial, IoT and security applications says Dr Reinhard Ploss, CEO of Infineon. The company is starting volume production of gallium nitride (GaN) power transitors later this year.

"A broad range of structural trends will drive growth in the coming years: electro-mobility, renewable energies, factory automation, data centres and a steadily increasing number of battery-powered, connected devices," he said. "We have established an excellent position in the markets in which we operate and we are determined to exploit the opportunities that result from this and, accordingly, apply a rigorous approach to investing. Our current plans are aimed at providing the necessary level of manufacturing capacity to meet expected growth. It is currently forecast that, by the middle of the coming decade, more than half of the power semiconductors produced by Infineon will be manufactured on 300 mm wafers n Dresden, Germany and Villach, Austria. This will enable us to improve our profitability further, despite higher depreciation expense."

On average, annual investments are expected to be 15 percent, up from 13 percent, of revenue which is expected to grow at 10% this year.

Further investments in the low three-digit million euro range in total are planned over the coming years to enable Infineon to exploit additional business opportunities and react appropriately to structural changes. The €700m for front-end 300mm cleanrooms and larger R&D buildings mean the investment-to-sales ratio well above the ratio envisaged in the target operating model.

www.infineon.com

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