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German semiconductor firm Infineon Technologies (Infineon) has opened a €5bn ($5.7bn) smart power fab in Dresden, doubling manufacturing capacity at the Germany-based site.
The plant marks Infineon’s largest-ever single investment and is expected to support Europe’s semiconductor manufacturing base amid rising demand from AI infrastructure, electric vehicles, and renewable energy systems.
Located in Europe’s largest microelectronics cluster, the facility expands production of power semiconductors – used for power switching, management, and control in electronic systems – and analogue/mixed-signal technologies – which connect the real-world signals with digital systems.
The facility uses advanced digitalisation to accelerate production and double manufacturing speed, enabling faster response to market demand across these key industries.
Friedrich Merz, German Federal Chancellor, said, “The expansion of Infineon’s production capacity… strengthens our technological sovereignty and the resilience of important supply chains in Europe.”
The project is by a European Union-approved €920m ($1bn) German aid measure, under the European Chips Act and the Important Project of Common European Interest in Microelectronics and Communication Technologies (IPCEI ME/CT) programme.
According to market research, the domestic semiconductor industry generated over €17bn ($19.4bn) in 2025, with more than a third of European chips produced in Germany.
