Infineon to Invest Up to €5 Billion in Malaysia Site Expansion

Infineon Technologies AG announced plans to expand its manufacturing capacity with a project on its Malaysia site that will cost as much as €5 billion ($5.5 billion) over five years.

(Bloomberg) — Infineon Technologies AG announced plans to expand its manufacturing capacity with a project on its Malaysia site that will cost as much as €5 billion ($5.5 billion) over five years.

The expansion, which more than doubles the original investment Infineon announced 18 months ago, will help generate €7 billion in revenue by the end of the decade, the company said in a statement on Thursday.

Customers have committed to €5 billion in spending and have pre-paid about €1 billion, Infineon said. It’s the latest expansion as the chipmaker rushes to take advantage of a healthy market for its chips from automakers. 

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Infineon Chief Financial Officer Sven Schneider said in an interview on Bloomberg TV that Malaysia has a good base of employees, making it an attractive place to expand. A dearth of qualified employees has been a major problem for chipmakers’ plans to expand in the US and Europe. 

Still, the announcement comes as investors express greater concern over the company’s shrinking profitability. Margin declines in the third quarter from the previous three months and a forecast showing that they could contract further this quarter helped send shares down the most since 2020 on Thursday. 

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