German chip company Infineon Technologies has officially opened its Smart Power Fab in Dresden several months ahead of schedule, marking the largest single investment in the company’s history. Backed by an investment of €5 billion, the new facility significantly expands semiconductor manufacturing capacity and reinforces Europe’s position in advanced chip production.

The plant doubles Infineon’s manufacturing capacity at its Dresden site and establishes what the company describes as the world’s largest factory for intelligent power semiconductors and analog/mixed-signal technologies. The project is also one of Germany’s biggest industrial investments and will create 1,000 direct jobs.

“Our Smart Power Fab is creating urgently needed capacities for the key technologies of the future, for everything from energy supply for AI data centers to software-defined vehicles and renewable energies,” said Jochen Hanebeck, CEO of Infineon Technologies AG.

Supporting AI, Automotive and Renewable Energy Markets

The Dresden facility will manufacture chips used in AI data centers, electric vehicles, renewable energy systems and other industrial applications. Its products include intelligent switches capable of controlling electrical loads while monitoring power flow, helping improve energy efficiency across critical systems.

According to Infineon, the expansion will help strengthen supply chains for sectors increasingly dependent on advanced semiconductor technologies. The facility also reinforces Dresden’s role within the Silicon Saxony semiconductor cluster, one of Europe’s largest microelectronics ecosystems.

German Federal Chancellor Friedrich Merz highlighted the strategic importance of the investment, stating that power semiconductors are essential for “the energy transition, the future of mobility and our AI infrastructure.”

Digital Manufacturing Enhances Production Speed

The Smart Power Fab incorporates extensive digitalization technologies designed to accelerate production and improve operational flexibility. Infineon used a digital twin to optimize the building design and machine layout before construction, while AI-based algorithms support system and process qualification.

The facility is digitally connected to Infineon’s Villach plant through a “One Virtual Fab” approach, enabling faster qualification of products and processes and allowing the company to respond more quickly to changing market demand.

Sustainability Built Into Operations

Infineon said the new fab sets new benchmarks for sustainable semiconductor manufacturing. The production system operates without natural gas and incorporates advanced water treatment and closed-loop water management systems.

Approximately 90 percent of water used in production will be recirculated, while energy recovery technologies are expected to reclaim up to 45 percent of the energy consumed. These measures are intended to reduce resource consumption and improve the environmental footprint of chip manufacturing.

03 July 2026