EU clears Austrian aid for Infineon power chips

The European Commission has approved €319 million in Austrian state aid for Infineon’s gallium nitride power semiconductor project in Villach. The company plans roughly €1.1 billion in investment through 2034, with production starting by the end of 2027. Existing cleanrooms will be converted rather than a new factory built, and capacity will expand with demand.

The facility will manufacture chips on 300-millimeter wafers, a capability the Commission describes as first-of-a-kind within the EU. Infineon says these wafers yield 2.3 times as many chips as smaller wafers currently used for GaN production. Potential savings depend on manufacturing yields, which the company has not disclosed. GaN chips switch faster than silicon and lose less energy as heat, supporting applications including AI data centers, electric mobility, renewable energy and robotics.

The grant requires Infineon to broaden collaboration with startups, smaller businesses and research institutions, provide training, and share profits exceeding current expectations with Austria. The Austrian ministry’s formal funding commitment remains pending, and additional hiring has not been quantified. The project falls under the European Chips Act, which seeks to strengthen regional semiconductor production and reduce dependence on outside suppliers.