Germany-based semiconductor major Infineon Technologies announced plans to invest an additional €500 million in manufacturing capacity during the current fiscal year, reflecting strong and accelerating demand for chips used in artificial intelligence data centers.
The increased spending lifts Infineon’s total planned investments for the 2026 fiscal year, which began on October 1, to €2.7 billion. The bulk of the capital expenditure will be directed toward expanding production of power semiconductors and related chips that support AI-driven data center infrastructure.
Infineon said it expects revenue from its AI-related business to reach €1.5 billion in the current year and rise to €2.5 billion in the following year. The company also projects that revenue from this segment will grow by around two-thirds by 2027, reflecting sustained demand from hyperscale and enterprise data center customers.
“The very dynamic demand for AI, against an otherwise subdued market backdrop, is providing strong tailwinds to Infineon,” said Chief Executive Officer Jochen Hanebeck. He added that the company is bringing forward investments to better align manufacturing capacity with rising customer demand.
Infineon shares rose 2.6 percent in early trading.
Infineon reported first-quarter group revenue of €3.66 billion. The company’s segment result margin, its preferred measure of operating profitability, reached 17.9 percent for the fiscal first quarter ended in December.
Revenue in the Automotive segment fell in the first quarter of fiscal year 2026 to €1,821 million, from €1,921 million in the previous quarter. The 5 percent decline was due to seasonally weaker demand.
Revenue from Infineon’s power and sensor systems segment declined 3 percent quarter on quarter to €1.17 billion. However, the company said this segment is expected to grow at a significantly faster pace than the group average over the rest of the year, driven largely by expanding data center demand linked to AI workloads.
Revenue in the Green Industrial Power segment dropped to €349 million, from €442 million in the previous quarter. The 21 percent decrease was the result of significantly lower demand across all areas except grid infrastructure, where revenue rose substantially.
Connected Secure Systems segment revenue decreased in the first quarter of fiscal year 2026 to €321 million, from €369 million in the previous quarter. The 13 percent decline was due to seasonally lower demand in most application areas.
BABURAJAN KIZHAKEDATH