Infineon (AO) | Buy | Positive feedback from Dresden 4 fab visit

Research evidence excerpt

Infineon (AO) | Buy | Positive feedback from Dresden 4 fab visit

Infineon Buy | Target Price: EUR95.00

The Dresden 4 fab should finally allow the group to more than double the existing Dresden fabs capacity (Dresden 3 generates c.

EUR2bn in sales, Dresden 1+2 c. EUR2bn in sales, in our view). All in all, the Dresden campus is now ready to generate c. EUR9bn

in sales at full capacity.

Infineon has also room to expand the capacity of the Dresden campus beyond Dresden 4 if needed (there is room to build another

module in the campus), bearing in mind that expanding manufacturing capacities in existing sites remains the most efficient

option, thanks to large economies of scale and manufacturing flexibility (from power to analog mixed-signals). The Dresden site

should be 30% more capacity efficient when the new Dresden 4 fab runs at full capacity.

Large opportunities to expand capacities outside Dresden

While the Villach fab remains the technology development centre for silicon carbide (SiC), the SiC volumes will ramp up in the

200mm fab in Kulim.

The Villach fab is currently fairly loaded with its 200mm wafer capacities (split between silicon and gallium nitride (GaN)

technologies), and Infineon has the opportunity to shift Villach 200mm wafer capacities to 300mm wafers if needed, leading to c.

40% additional capacity within the existing clean room (with large additional capacities available for both silicon and GaN

300mm wafers).

Infineon is currently shifting its 150mm SiC volumes in Villach to its 200mm fab in Kulim, leaving additional capacities available

for both silicon and GaN in Villach.

The Kulim 3 fab is gradually ramping up, and Infineon still claims that it could be the largest and most competitive 200mm SiC fab

in the world.