The European Commission has approved a E920 million German state aid package for Infineon to build a new semiconductor manufacturing plant in Dresden. This funding will support the company's MEGAFAB-DD project, which aims to produce a wide variety of chips. The new facility, expected to reach full capacity by 2031, will play a key role in strengthening Europe's technological autonomy and security of supply in semiconductor technologies, aligning with the European Chips Act's goals.

This move is part of a global trend where chipmakers are investing heavily in new plants, taking advantage of subsidies from the US and the EU to maintain the West's edge in semiconductor technology over China. The European Commission has allocated E15 billion for public and private semiconductor projects by 2030, further reinforcing the region's commitment to securing its position in the industry.

Infineon's E3.5 billion investment, the largest in its history, will help address the growing demand for semiconductors used in industrial, automotive, and consumer applications. The company has committed to ensuring the plant benefits the wider EU semiconductor value chain, including research and development for the next generation of chips. The plant will also contribute to crisis preparedness by prioritising orders in case of supply shortages.