June 15, 2026 /SemiMedia/ — Infineon Technologies will begin production at its €5 billion semiconductor facility in Dresden, Germany, on July 2, marking the launch of the company's largest investment project to date.

According to Chief Operations Officer Alexander Gorski, the new power semiconductor fab is part of the Dresden site expansion and is one of the flagship projects supported by the European Union's Chips Act, having received around €1 billion in subsidies.

The facility is widely regarded as one of the few major EU Chips Act projects that has progressed successfully. The legislation was introduced during the global semiconductor shortage with the aim of raising Europe's share of worldwide chip production to 20% by 2030.

Gorski said output from the Dresden fab will be ramped up gradually based on market demand and could eventually generate up to €5 billion in annual revenue. Infineon has already invested about €2 billion in construction, while the remaining funds will be used to add equipment and expand capacity over time.

Rising demand from AI data centers, electric vehicles and industrial applications is expected to support long-term growth for power semiconductors. Gorski noted that AI data centers under construction or in planning worldwide could consume twice as much electricity by 2030 as they do today, increasing the need for efficient power conversion technologies.

Infineon previously forecast that revenue from data center-related businesses would increase from approximately €1.5 billion in fiscal 2026 to €2.5 billion in 2027. Bank of America analysts recently raised their estimate for Infineon's AI power semiconductor revenue in 2028 by €500 million to €4.5 billion, highlighting growing expectations for AI-driven demand.