Infineon is opening a Dresden power-chip fab to cash in on AI data centres and their bonkers electricity appetite.
In a statement, Infineon said it will open its $5.8 billion, about €5 billion, power-chip fab in Dresden on 2 July. The plant is backed by about $1.1 billion, roughly €947 million, in EU Chips Act subsidies.
The German outfit has traditionally made chips for the automotive industry, but AI data centres are now giving it another fat line of business. The new fab will make power semiconductors needed to keep AI infrastructure fed with electricity.
Infineon chief operating officer Alexander Gorski said: “The AI data centres currently being built and planned around the world will consume twice as much electricity in 2030 as they do today. That’s as much as the entire Federal Republic of Germany.”
Chip production at Dresden will scale over time depending on demand. Gorski said the site could add as much as €5 billion in annual revenue, but declined to say when full capacity would be reached.
Infineon has spent about €2 billion on construction so far. The rest will be spent over time on more machines for the fab, which is where the real silicon sausage-making starts. The new facility is “a key catalyst,” Bank of America analysts wrote in a note last week.
Demand from AI customers is materially above Infineon’s current capacity, the analysts said. They expect that imbalance to improve in the 2027 and 2028 financial years. The analysts raised their AI power revenue forecast for Infineon by €500 million to €4.5 billion for 2028.
Infineon expects data centre-related revenue to rise from about €1.5 billion in fiscal 2026, roughly 10 per cent of sales, to €2.5 billion in 2027. The hundreds of billions of dollars being flung at AI are driving a rapid expansion of data centre capacity worldwide. That means someone has to provide the less glamorous kit that stops the whole thing tripping the breaker.
Infineon does not make advanced AI chips like those designed by Nvidia. Still, the power semiconductors planned for Dresden are needed if AI infrastructure is going to keep guzzling electricity without falling over.
