Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) is strengthening its market leadership in power semiconductors by adding significant manufacturing capacities in the field of wide bandgap (SiC and GaN) semiconductors. The company is investing more than €2 billion to build a third module at its site in Kulim, Malaysia. Once fully equipped, the new module will generate €2 billion in additional annual revenue with products based on silicon carbide and gallium nitride.

The expansion, following the company’s long-term manufacturing strategy, will benefit from the excellent economies of scale already achieved for 200-millimeter manufacturing in Kulim. It will complement Infineon’s leading position in silicon, based on 300-millimeter manufacturing in Villach and Dresden. The new investment will greatly reinforce the overall competitive advantage, which is based on the combination of technology leadership, a broad product portfolio and deep application know-how, following Infineon’s “Product to System” approach.

“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, Chief Operations Officer 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 center in Villach and cost-effective production in Kulim for wide bandgap power semiconductors.”

Two sites with high-volume wide bandgap capabilities for supply chain resilience

Infineon already provides SiC-based products to more than 3,000 customers today. Used in a variety of applications, these semiconductors offer added value to the customer because of better system performance in terms of efficiency, size and cost compared to silicon-based solutions. Infineon’s strategic “Product to System” approach also facilitates the adoption of SiC-based semiconductors with leading base technology, the broadest product and package portfolio and unparalleled application know-how. Focus applications are industrial power supply, photovoltaic, transportation, drives, automotive and EV charging. Infineon is targeting revenues of $1 billion with SiC-based power semiconductors by the middle of the decade. The GaN market is also predicted to undergo massive growth – from $47 million in 2020 to $801 million in 2025 (CAGR: 76%; source: Yole – Compound Semiconductor Quarterly Market Monitor Q3 2021). Infineon has leading-edge system and application understanding, a broad GaN IP portfolio and large R&D force.

Once fully loaded, Kulim 3 will create 900 high-value jobs. Construction will begin in June and the fab will be ready for equipment in summer 2024. The first wafers will leave the fab in the second half of 2024. The investment in Kulim will comprise significant value-added steps, in particular epitaxial processes and wafer singulation.

“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”, says Malaysia’s Senior Minister and Minister of International Trade and Industry, Dato’ 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.”

Villach to strengthen its role as global competence center for wide bandgap technology

The Villach site will continue to serve as the innovation base and global competence center for wide bandgap technology by converting existing silicon facilities over the next years. 6” and 8” silicon lines will be converted to SiC and GaN manufacturing by repurposing non-specific silicon equipment. The Villach site is currently preparing for further growth opportunities.

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