German semiconductor manufacturer Infineon Technologies has broken new ground on its new semiconductor production facility in Dresden, Germany.

The company claims that it is investing €5bn in this new plant, the largest single investment it has made so far.

This investment is expected to strengthen the semiconductor manufacturing framework and enables decarbonisation and digitalisation.

Political leaders and officials from Berlin, Brussels, and Saxony participated in the ground-breaking announcement ceremony, including EU Commission officials, Infineon officials and even the German federal chancellor Olaf Scholz.

Infineon CEO Jochen Hanebeck said: “With this groundbreaking [semiconductor facility], Infineon is launching an important contribution to the green and digital transformation of our society.

“Global semiconductor demand will grow strongly and persistently in view of the high demand for renewable energies, data centres and electromobility. Our new plant will serve our customers’ demands in the second half of the decade. Together, we are driving decarbonisation and digitalisation.”

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The expansion of the current Dresden facility is expected to create approximately 1,000 jobs. Preparatory work is already underway at the plant’s site, with shell construction set to begin in late 2023.

Manufacturing is set to commence between September and November of 2026.

The EU Commission’s president Ursula von der Leyen said: “In times of increasing geopolitical risks, it is great news for Europe that Infineon is investing massively in semiconductor manufacturing in Dresden.

“We need more such projects in Europe as demand for microchips will continue to rise rapidly. The EU Commission and member states are mobilising €43bn over the next few years under the European Chips Act to create a stronger and more resilient Europe in the digital domain.”

Subject to the EU Commission’s state aid decision and the national grant procedure, the project will be funded in line with the objectives of the European Chips Act. Infineon is seeking approximately €1bn in public funding.