Germany’s Infineon said it would invest €1.1 billion (£920m) into its manufacturing site in Villach, Austria, to expand the production of gallium nitride (GaN) power chips, in a move financed in part by the EU’s Chips Act.

Infineon is aiming the energy-efficient power chips at uses including AI data centres, electric vehicles and robotics.

The funds are to be invested over a period of eight years, with nearly one-third of the financing made up of EU funds, Infineon said, as part of a drive to bring more chip manufacturing into the bloc.

Energy-efficient chips

The investment is to upgrade the Villach site to produce GaN power chips using 300-millimetre wafers, which can hold 2.3 times as many chips as the most common 200mm wafers.

Infineon opened the plant in 2021 with an initial investment of €1.6bn as a centre for the use of energy-efficient materials such as gallium nitride.

The company is one of the world’s biggest makers of power chips, an area that has seen significant demand due to heavy spending on data centres.