Infineon cannot expand chip capacity alone, CEO says

MUNICH, Nov 10 : German chipmaker Infineon needs commitments from customers to justify further expansion of its semiconductor production capacity, CEO Jochen Hanebeck said on Monday.

Speaking at an industry event ahead of the electronica trade fair in Munich, Hanebeck said chipmakers were already investing heavily in production and research, but could not shoulder the financial risks of expansion alone.

"There are limits to what we can shoulder," Hanebeck said, adding that customer commitments were "definitely" needed to bring additional capacity online.

Infineon opened a new €5 billion ($5.6 billion) semiconductor factory in Dresden, Germany in July, and in October announced plans to invest around €1.1 billion in gallium nitride chip production in Villach, Austria.

Hanebeck said government support remained essential to attracting semiconductor investment, citing economies of scale, existing engineering expertise and public funding as the reasons Infineon continued to expand its European factories.

"What we get in Europe is substantial, but as compared to other regions, it's still certainly not a level playing field," he said.