INFINEON Technologies announced a breakthrough in the production of compound semiconductors that it said will help bring down manufacturing costs and speed their adoption for artificial intelligence (AI) applications.
The German chipmaker said on Wednesday (Sep 11) it has successfully developed 300 millimetre gallium nitride wafers, which can produce 2.3 times more chips than 200 millimetre wafers, in a move that will make the emerging technology cheaper.
Gallium nitride is a compound semiconductor, meaning it is made from multiple elements, and is particularly energy-efficient, leading to more compact and powerful electronic devices. It is often used in industrial and automotive applications such as power supplies for AI systems, solar panel systems and motor-control systems.
The company is planning to start sending samples to customers in late 2025 and will eventually mass produce the wafers at its plant in Villach, Austria, according to Infineon division president Adam White.
As the cost of production comes down, such chips are becoming more popular, although silicon remains the most common material to use. The market for gallium nitride, or GaN, chips will reach at least US$2.3 billion dollars by the end of the decade, according to White.
“Infineon innovation in GaN manufacturing could help it lead that market,” JPMorgan analysts Sandeep Deshpande and Anchal Sahu said. “However given that samples will only be available in late 2025, high volume production will likely be only in 2027.”
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The new tech can improve device performance, reduce overall costs and ensure steady supplies for customers, according to the Neubiberg-based company. There is a growing need for advanced power chips as countries around the world race to build more AI data centres and carmakers upgrade designs for their smart vehicles.
The production breakthrough came after Infineon bought Ottawa-based GaN Systems for US$830 million last year.
Automotive chips
European chipmakers are leaders in the global automotive chip market, which McKinsey forecasts will be worth about US$150 billion by 2030, rising from US$52 billion in 2021. Infineon competes with European peers NXP Semiconductors and STMicroelectronics in the automotive chip space.
Infineon and NXP are part of a consortium, led by Taiwan Semiconductor Manufacturing, that is building a 10 billion euros (S$14 billion) advanced fab in the eastern German city of Dresden. The Dresden site is expected to help grow the local semiconductor ecosystem and boost Europe’s renewed industrial push.
However, Infineon is not immune to a plethora of challenges Germany’s automotive-reliant economy faces. In August, the chipmaker said it plans to eliminate 1,400 jobs due to a prolonged slump in demand for electric vehicles. The AI frenzy has also cooled down recently, with investors questioning whether the new tech can be monetised amid signs of an economic slowdown in the US.
There is also an increasing number of Chinese firms, such as Siengine Technology and Zhejiang Jingneng Microelectronics, entering the automotive market with support from local carmakers as Beijing seeks to reduce dependence on foreign technologies.
While Infineon and its European peers are still pinning their hopes for growth on the Chinese market, they are likely to be hurt by Beijing’s efforts to foster domestic firms in the long run. Chinese officials earlier this year told local carmakers to prioritise procuring China-made chips, Bloomberg News has reported. BLOOMBERG
