Infineon to build the world’s largest 200-millimeter SiC Power Fab in Kulim, Malaysia

Munich, Germany – 3 August 2023 – The decarbonization trend will result in strong market growth for power semiconductors, in particular those based on wide bandgap materials. As a leader in Power Systems, Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) is now taking a further, decisive step to shape this market: By significantly expanding its Kulim fab – over and above the original investment announced in February 2022 – Infineon will build the world’s largest 200-millimeter SiC (silicon carbide) Power Fab. The planned expansion is backed by customer commitments covering about five billion euros of new design-wins in automotive and industrial applications as well as about one billion euros in pre-payments.

Over the next five years Infineon will additionally invest up to five billion euros in Kulim during a second construction phase for Module Three. The investment will lead to an annual SiC revenue potential of about seven billion euros by the end of the decade, together with the planned 200-millimeter SiC conversion of Villach and Kulim. This highly competitive manufacturing base will support Infineon’s SiC market share target of 30% towards the end of the decade. Infineon is confident that the company’s SiC revenue in the fiscal year 2025 will come in ahead of the target of one billion euros.

“The market for silicon carbide shows accelerating growth, not only in automotive but also in a broad range of industrial applications such as solar, energy storage and high-power EV charging. With the Kulim expansion, we will secure our leadership position in this market,” said Jochen Hanebeck, CEO of Infineon. “With the industry’s leading scale and a unique cost position, we are leveraging our competitive position of best-in-class SiC trench technology, the broadest package portfolio and unrivaled application understanding. These factors are the areas of differentiation and success in the industry.”

Infineon has been awarded new design wins of about five billion euros along with about one billion euros in prepayments from existing and new customers: In the automotive sector this includes six OEMs, three of them from China. Among the customers are Ford, SAIC and Chery. In the area of renewable energies customers include SolarEdge and three leading Chinese photovoltaic and energy storage systems companies.  In addition, Infineon and Schneider Electric agreed on a capacity reservation including prepayments for power products based on silicon and silicon carbide. Infineon and the respective customers will provide more details in separate announcements in the near future. The prepayments will contribute positively to Infineon’s cash flow in the coming years and shall be fully repaid in connection with the agreed sales volumes by 2030 at the latest.

The Right Honourable Dato’ Seri Anwar bin Ibrahim, Prime Minister of Malaysia, expressed his appreciation for Infineon’s commitment to creating a significant wide bandgap hub in the country. “Malaysia is putting in maximum efforts to meet its national target to decarbonize its economy and achieve net zero by 2050. Malaysia’s continued appeal as a preferred investment destination comes with a well-established landscape for developing innovative and sustainable technologies. In this vein, Infineon’s vision on green technology and sustainability puts it right at home in Malaysia. Infineon and other well-established German corporations’ continued faith in Malaysia is a vote of confidence in Malaysia’s new economic growth agenda premised on inclusivity and sustainability, enabled by strong policies on knowledge transfer, quality investments, business enablement and socio-economic well-being based on equitable sharing of the nation’s wealth.”

The Minister of Investment, Trade and Industry (MITI), His Hon. Tengku Datuk Seri Utama Zafrul Aziz lauded Infineon’s expansion and said, “Infineon’s expansion of their world-class silicon carbide facility in Kulim marks a significant milestone in Malaysia’s pursuit of developing advanced manufacturing capabilities, creating high-skilled employment opportunities and positioning the country at the forefront of enabling green technologies, which are crucial to achieving our global sustainable development goals. The innovative power semiconductor technologies manufactured in the SiC Power Fab will also bolster Malaysia’s position as a key player in the world’s semiconductor ecosystem, with a growing role specifically in the sustainable technology supply chain. I am heartened by Infineon’s sharing of Malaysia’s commitment to address the impact of climate change and I look forward to our long-term partnership for the further development of Malaysia’s green technologies ecosystem.”

Sustainability is a key element in the planning, construction and operation of the fab. The building is designed in a way that allows Infineon to make responsible use of resources such as electricity and water.