The new fab marks a win for the EU in its attempts to improve the bloc’s chipmaking capacity.

Global semiconductor company Infineon Technologies is set to open a new €5bn chip factory in Germany, extending its existing campus in Dresden.

The factory represents Infineon’s single largest investment, according to Bloomberg, and was built with support from European Union subsidies. The Smart Power Fab will be opening doors on 2 July.

EU support for Infineon is part of a strong effort aimed at honing the bloc’s chipmaking capabilities and improving resilience to foreign pressures on the industry. Last year, the European Commission approved a direct grant of up to €920m for Infineon to support its investment in Dresden.

The fab also received support under a different programme aimed at supporting common European interests on microelectronics and communication technologies. The company said that the total funding for the newly expanded Dresden site amounts to around €1bn.

The new “first-of-a-kind” European plant will produce two types of semiconductor technologies to be used in industrial, automotive and consumer applications, according to the Commission.

Infineon claimed that the development will create up to 1,000 new jobs, aside from jobs created in the investment ecosystem.

“The AI data centres currently being built and planned around the world will consume twice as much electricity in 2030 as they do today,” Alesander Gorski, Infineon’s chief operating officer, told media at a walk-through of the site. “That’s as much as the entire Federal Republic of Germany.”

Chip production at the fab will be scaled over a period of time depending on demand, Gorski said, adding that it could potentially add as much as €5bn in revenue every year.

The Smart Power Fab is a welcome success for the EU, coming less than a year after Intel scrapped plans for a chip factory in Germany and an assembling and testing facility in Poland.

Earlier this year, Infineon opened a new Cork-based R&D centre focused on its newest innovations in the automotive and consumer microelectronics space, in areas such as battery management, motor control and touchscreens.

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