Infineon Plans €5 Billion Dresden Site, Raises Targets

Infineon Technologies AG is planning a new 5 billion-euro ($5.16 billion) factory in the eastern German city of Dresden to expand its 300-millimetre production capacities, the German chipmaker said on Monday, while also raising its long-term financial targets.

The plant, subject to adequate public funding, could go into operation in autumn 2026 and create up to 1,000 jobs, Infineon added.

When operating at full capacity, the planned factory would have the potential to generate annual revenue equal to the level of the investment, it added.

The company also raised its future growth targets and now expects its average rate of revenue growth to be more than 10% annually, up from a previous 9%.

The chipmaker said it sees growth driven in particular by electromobility, autonomous driving, renewable energy, data centres, and the so-called internet of things – in which items like appliances, factory equipment and health monitors are connected to the internet or other communications networks.

The segment result margin is also expected to reach an average level of 25% versus 19% to date.

Infineon already expects a margin of 24% for its current fiscal year through the end of September, with sales forecast to reach 15.5 billion euros plus or minus 500 million.

Chief Executive Jochen Hanebeck said the new fiscal year had got off to a good start. But he added: “In view of ongoing macroeconomic and geopolitical uncertainties, heightened vigilance is required in the coming quarters.”

In fiscal 2022, Infineon saw revenue rise 29% to 14.2 billion euros, while segment profit jumped 63% to 3.4 billion euros – exceeding analysts’ expectations on both counts.

Following the results announcement, shares in Infineon were up 7.5%.

(Reporting by Alexander Huebner; writing by Miranda Murray and Rachel More; editing by Jonathan Oatis)