The new Infineon plant was put into production in the first quarter ahead of schedule. CEO said that the price of chips will still soar.

According to a number of foreign media reports, Infineon officially opened its 12-inch wafer power semiconductor plant in Ferraher, Austria, on Friday, local time, with a total investment of 1.6 billion euros (12.1 billion yuan). It is one of the largest semiconductor projects in Europe.

It is reported that the plant has been under construction since November 2018 and was put into production in early August this year, three months ahead of schedule, and the first batch of wafers will be shipped this week. The first phase of production capacity mainly produces power management chips in the field of automotive, data center and renewable energy power generation, and production capacity will continue to climb in the next four to five years. The new plant is expected to generate annual sales of 2 billion euros (15.2 billion yuan) for Infineon.

Can the new factory alleviate the current situation of "lack of core"? Infineon CEO Reinhard Ploss said the new plant aims to expand long-term capacity, but now that "global demand for power management chips is increasing, this is the perfect time to open capacity". In the short term, the opening of new capacity can alleviate the chip shortage to some extent, but it is impossible to give an exact figure for how much capacity gap can actually be made up.

Talking about the soaring prices under the chip shortage, Infineon said that customers' budget spending on chips is indeed getting higher and higher. "the market is the most critical determinant of price", but the company does not agree with the practice of "the highest bidder gets" to drive up the price, and will conduct specific negotiations with customers on pricing in the future. However, Infineon also expects that due to the high cost pressure of semiconductor manufacturers and the still high demand, the price of chips in the industry will rise sharply.

How long can the price go up? Infineon CEO Reinhard Ploss believes that the semiconductor market may peak in 2023-2024, when the problem of oversupply will also emerge. At the same time, a more important focus should be on chip allocation across industries: which industries will see growth and which industries need more chip supply.

In addition, Ploss also stressed that in the current market situation, it is indeed very important to have their own wafer production capacity, which will help to adjust production capacity to meet customer demand and maintain their competitiveness. Otherwise, seeking external cooperation in wafer foundry is likely to incur additional costs.