Amid a sharp rise in artificial intelligence workloads, a leading European chipmaker is moving quickly to expand its production capacity to meet growing data centre needs.
Germany’s Infineon said it plans to invest an additional €500 million ($591.65 million) in manufacturing capacity during the current fiscal year, citing strong growth expectations from its AI-related business. The company said revenue from this segment is expected to rise by nearly two-thirds in 2027.
On Wednesday, Infineon raised its total planned investments for the 2026 fiscal year, which began on October 1, to €2.7 billion. The spending will largely focus on chips used to power AI data centres.
Following the updated outlook, the company said revenue from its AI business is projected to reach €1.5 billion in the current year and grow further to €2.5 billion in the next year. Infineon shares rose 2.6% in early trading after the announcement.
“The very dynamic demand for AI, against an otherwise subdued market backdrop, is providing strong tailwinds to Infineon,” Chief Executive Jochen Hanebeck said.
“To serve our customers in the best possible way, we are aligning our manufacturing capacity to meet further rising demand and are bringing forward our investments in this area,” he added.
Infineon also reported group revenue of €3.66 billion for the fiscal first quarter ended in December, slightly above the €3.62 billion expected in an analyst poll published on January 27. Its segment result margin, the company’s key operating profitability metric, came in at 17.9%, exceeding market expectations.
Revenue from the power and sensor systems segment declined 3% quarter-on-quarter to €1.17 billion. However, Infineon said this segment is expected to grow at a much faster pace than the group average over the year, driven by sustained data centre demand.
Also read: Viksit Workforce for a Viksit Bharat
Do Follow: The Mainstream formerly known as CIO News LinkedIn Account | The Mainstream formerly known as CIO News Facebook | The Mainstream formerly known as CIO News Youtube | The Mainstream formerly known as CIO News Twitter
About us:
The Mainstream is a premier platform delivering the latest updates and informed perspectives across the technology business and cyber landscape. Built on research-driven, thought leadership and original intellectual property, The Mainstream also curates summits & conferences that convene decision makers to explore how technology reshapes industries and leadership. With a growing presence in India and globally across the Middle East, Africa, ASEAN, the USA, the UK and Australia, The Mainstream carries a vision to bring the latest happenings and insights to 8.2 billion people and to place technology at the centre of conversation for leaders navigating the future.
