VILLACH, Austria -- Infineon Technologies opened a 1.6-billion-euro ($1.9 billion) plant in Austria on Friday, boosting the German semiconductor company's ability to supply power chips for cars, datacenters and renewable power generation.
The plant in Villach, ready three months early, will make chips on 300 mm wafers thinner than a human hair, operating in tandem as a 'megafab' with an existing plant in Dresden, Germany and adding up to 2 billion euros a year in revenues, the supplier said in a statement.
"The new plant is a milestone for Infineon and its opening is very good news for our customers," CEO Reinhard Ploss told an opening ceremony attended by Austrian Chancellor Sebastian Kurz and EU Commissioner Thierry Breton.
"Our timing in adding new capacity could not be better, considering growing demand for power-management semiconductors," added Ploss.
Infineon is adding capacity at a time when global semiconductor supply chains are under extreme stress, with most leading automakers being forced to idle production due to chip shortages.
German-based Infineon, the leading supplier to the auto industry, has itself faced problems meeting delivery commitments after a winter storm knocked out a plant in the United States and coronavirus lockdowns disrupted operations in Malaysia.
The extra production of specialist power chips in Villach will serve growing demand for electric vehicles, datacenters and wind- and solar-power facilities. But it will not immediately help ease the broader semiconductor crunch, say analysts.
Separately, Ploss said he expects silicon chip prices to rise significantly, adding that semiconductor makers needed to cover the cost of investments to meet booming demand.
"We expect significant price increases," Ploss said, adding that the chipmaker would not sell to the highest bidder at a time when customers were willing to pay astronomical prices.
"We are a reliable partner when things go up and when they go down," he said.
Correction: A previous version of this story misstated Reinhard Ploss' first name.