Strong demand sees Infineon invest up to additional €5bil in building world’s largest 200mm SiC Power Fab in Malaysia

• Confidence in economic agenda premised on inclusivity, sustainability
• Industry leading scale & cost position areas of differentiation for Infineon

Like all major global trends, the decarbonization trend is resulting in winners and losers. Chalk up the small city of Kulim, in Malaysia, population around 380,000 as a winner.  

Already an established high tech manufacturing hub, one of its key investors, Germany’s semiconductor leader, Infineon Technologies AG announced yesterday it is significantly expanding its Kulim fab – over and above the original €2bil (RM9.95 billion) investment announced in July 2022 – where, over the next five years Infineon will invest up to an additional €5bil (RM24.9 billion) during a second construction phase for its Module Three (third plant).

The investment boost will result in the plant to become the world's largest 200-millimeter SiC (silicon carbide) Power Fab when it is fully completed in 2028. Replacing silicon as the raw material for its semiconductors with silicon carbide results in energy saving chips with superior qualities such as faster switching, higher efficiency, and increased power density.

Infineon said the expansion is backed by customer commitments of about €5 billion of new design-wins in automotive and industrial applications as well as about €1 billion in pre- payments.

[RM1 = €0.201]

Anwar Ibrahim, Prime Minister of Malaysia, said, "Malaysia is putting in maximum efforts to meet its national target to decarbonize its economy and achieve net zero by 2050. In this vein, Infineon's vision on green technology and sustainability puts it right at home in Malaysia.”

Anwar added that Infineon and other well-established German corporations' continued faith in Malaysia is a vote of confidence in its new economic growth agenda premised on inclusivity and sustainability.

Jochen Hanebeck (pic), CEO of Infineon said, "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 Hanebeck. With an industry leading scale and cost position, Infineon is leveraging its competitive position of best-in-class SiC trench technology, the broadest package portfolio and strong application understanding. “These factors are our areas of differentiation and success in the industry," he added.
The investment will lead to an annual SiC revenue potential of about €7 by the end of the decade, together with the planned 200-millimeter SiC conversion of Infineon’s Villach, Austria and Kulim plants.

Infineon expects this manufacturing base will support its SiC market share target of 30% towards the end of the decade while expressing confidence that its SiC revenue in fiscal year 2025 will come in ahead of the €1 billion target.

The Minister of Investment, Trade and Industry (MITI), Zafrul Aziz said, "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."