Infineon Opens Smart Power Fab in Dresden on July 2: €5 Billion for EU AI Power Chips
On July 2, 2026, Infineon Technologies will open its Smart Power Fab in Dresden: this is a €5 billion facility dedicated to the production of power semiconductors. The opening takes place three months ahead of schedule, supported by €1 billion in EU Chips Act subsidies. At full capacity, the facility could generate up to €5 billion in annual revenue and create up to 1,000 jobs in Dresden.
The construction of a production facility fills the gap left when Intel decided to cancel the Magdeburg project, effectively undermining Europe’s strategy for sovereignty in semiconductors. Infineon's new factory, approved more than a year ago, thus becomes the first concrete success of the EU Chips Act, and it does so on a prestigious site: the plant is located in the same campus as TSMC's first European fab.
Power Chips for AI, Electric Vehicles, and Renewables
The facility will produce semiconductors on 300-millimeter wafers, in silicon and silicon carbide (SiC), intended for the management of voltages and currents, for three segments: AI data centers, electric vehicles, and renewable energy systems. So far, Infineon has spent about €2 billion on construction; the remaining €3 billion will be gradually invested in machinery purchases as demand grows.
The economic rationale is illustrated by COO Alexander Gorski: "AI data centers currently under construction and planned worldwide will consume double the electricity by 2030 compared to today. That’s as much as the entire Federal Republic of Germany." Group numbers confirm the acceleration: data center revenues are projected to rise from €250 million in fiscal year 2024 to over €700 million in 2025, with expectations of €1.5 billion for fiscal year 2026 and €2.5 billion in 2027.
On June 8, Infineon signed a partnership with Siemens to provide its CoolSiC MOSFET power modules for the new solid-state circuit breakers SENTRON 3QD2. These devices interrupt current in microseconds, up to 1000 times faster than conventional systems, with direct application in protecting data center infrastructure.
Analysts and Chips Act 2.0
Major tech companies are collectively investing over $700 billion in data centers in 2026. Infineon’s stock has more than doubled in value over the year, reaching a 52-week high of €89.67. Morgan Stanley raised its target from €63 to €91, and Deutsche Bank from €70 to €90, both with a buy rating.
The new Dresden facility is inaugurated just as Brussels proposes an EU Chips Act 2.0 that grants the Commission direct funding powers for chip production in Europe.