- Success story
- Research & development
The new high-tech chip factory for power electronics in Villach is the largest single investment project in the Group’s history, featuring an investment volume of € 1.6 billion. It underlines the feasibility of establishing attractive production facilities in Europe, even in the highly competitive microelectronic sector, when innovative strength is fused with cost efficiency.
Questions posed to Sabine Herlitschka, CEO Infineon Technologies Austria AG:
Over the past five decades, what originally began as an extended workbench has become a trailblazer of digitalisation. Today Infineon Austria bundles competencies for research and development, manufacturing and global business responsibility, producing 8.72 billion chips each year. Which conditions served as the basis for this development in Austria?
We love to speak about corporate success stories in the USA and China. However, our development shows that this is also possible in Austria. We succeeded by constantly focusing on cutting edge technologies, innovation and know-how. In this way, we can also hold our own in global competition and achieve the latest milestone i.e., implementing the new high-tech chip plant for power electronics here in Villach, the biggest investment project in the history of the Infineon Group. These investments have demonstrated the feasibility of setting up attractive production facilities in Europe, even in the highly competitive microelectronics sector. This success was made possible by fusing innovative strength and cost efficiency. In this way we definitely set new benchmarks and, as we know now, were ahead of our time. Over the past few decades, crucial business location factors were improved, active business location policies were pursued, and the potential of different industries was recognised, especially technology-oriented fields. All this also contributed to Infineon’s strong growth in Austria and its highly valuing the country as an industrial and research location.
Infineon employees come from 73 nations at present. How has Austria developed as a work location, and how easy or difficult is it to lure the best talents to Austria?
A company like ours in the microelectronics industry particularly relies on technical and semiconductor specialists. A recent example is our need for experts for new semiconductor materials i.e., silicon carbide and gallium nitride. We cannot find a sufficient number of specialists in Austria alone. For this reason, we have been searching for these professionals locally, nationally and internationally for years. As a company and as the business location of Austria, we stand out thanks to a comprehensive package consisting of appealing job profiles combined with personal development opportunities and attractive working conditions in the company. This is complemented by flexible working hours, further education and professional development programmes, home office and part time work, childcare and holiday care offerings and support in moving. Moreover, the quality of life and personal security speak in our favour. In recent years Austria has realised how important it is to make the business location attractive to foreign specialists and as well as to optimise and expand educational pathways. The newly presented reform of the Red-White-Red Card is once again a step in the right direction. In the meantime, the shortage of skilled works massively limits growth.
Infineon Austria is one of Austria’s most research-intensive companies. 2,100 employees comprising about 44% of the total workforce are involved in research and development. Since 2017, Infineon Austria has served as the global competence centre for new semiconductor materials such as silicon carbide and gallium nitride. How would you rate Austria as a research location in an international comparison and why did Infineon select Austria to bundle its R&D activities?
We are continuously investing in research and development at our sites in Villach, Graz and Linz. In this way, we are strengthening our core know-how and the innovative and future strength of our company. Furthermore, we closely cooperate with universities, universities of applied sciences and research centres. This enables us to create positive spill-over effects on the entire innovation system. For us Austria is a high-performance innovation location due to the qualifications of the employees as well as measures designed to promote research such as the research tax credit. Austria has clearly caught up in recent years with respect to its overall R&D ratio and is now ranked among the very best in Europe. However, it is also evident that the private sector accounts for close to two-thirds of all research expenditures in Austria. This makes it even more important for the public sector to continue providing strong impetus for attractive research funding as well as an innovation-friendly tax system. It is a fact that in a globalised economy, a country’s position can deteriorate simply because other nations become better or faster. That is why investments in education, knowledge, research, innovation and infrastructure remain highly relevant for the future.
Would you say that there is an outstanding level of cooperation in Austria between business and science, also in comparison to other countries?
Partnerships comprise the best approach to promote the transfer of knowledge and thus innovations. They are also the key to prosperity and employment. Together we can jointly develop more comprehensive solutions to the major challenges facing society such as the climate crisis and energy transition and implement them more quickly. We have certainly achieved a lot in terms of the intensity of cooperation, but there is still room for improvement. In particular, the priorities are to facilitate access of SMEs to research, promote spin-offs and startups, increasingly leverage European partnerships and accelerate the utilisation of research and development results. In this regard, it is essential for Austria and Europe to become more agile in light of the fact that the Chinese and American economies continue to gain in momentum.
To what extent has the availability of research funding such as the research tax credit impacted the investment decisions of Infineon in Austria?
For years Infineon has ranked among Austria’s most research-intensive companies. For this reason, the research tax credit is an important and effective business location factor to strengthen our domestic research and development activities against the backdrop of international competition. An attractive funding environment is generally an important advantage for investment decisions but not the only criterion. Location factors such as the infrastructure, availability of skilled workers, know-how and an innovative ecosystem also play a crucial role.
Which other framework conditions in Austria are particularly important for Infineon’s success?
It is vital to further develop the knowledge, innovation and technology location and above all the country’s educational level in a future-oriented manner. We must be more successful in inspiring young people to pursue careers in natural sciences and technology. The educational system still has a lot to do in this respect. Moreover, it is crucial to increase awareness of Austria among talents from all over the world as well as to enhance the attractiveness of business location projects and the establishment of new companies. This will work if one approaches things with the right mindset and is ready to measure oneself against the best in the world anywhere and anytime. In this way one fosters excellence and reaches the critical mass required for global visibility.
From your point of view, how has the Austrian business location changed over the years and decades? What has improved and what do you think was better in the past?
On balance, the right conditions taken together combine to make a business location attractive. It still applies today as it did back then. Measures designed to promote research and innovation are needed alongside investments in the infrastructure, especially the digital infrastructure, energy supply and above all education. We must not get stuck in old structures and systems. More than ever before, we need a future-oriented educational offering featuring a practical orientation and diversity to optimally prepare people for the working world. This includes well trained teachers, beginning with early childhood education. Education spending represents essential investments in the future for society and the business location and is something political decision makers must focus on.
Were there any particularly formative or noteworthy events, turning points or personal experiences in the corporate history of the Austrian facility which you vividly remember?
We collaborated highly professionally and efficiently with the city, federal provinces and the federal government in implementing our € 1.6 billion investment programme for manufacturing and research. This was not only due to our indirectly creating more than 1,000 new jobs, but also because it further upgraded the facility. One job at Infineon creates three more in the region. In this way Austria is sending a signal to investors, companies and people in Austria and abroad.
Could you briefly outline the most important milestones of Infineon’s business operations in Austria? For example, you could mention the number of employees then and now, R&D, expansion projects, new developments and investments at the site and so on.
Various studies show that Infineon has disproportionately positive impacts on the regional economy in Austria. Let me give you a few examples. We have created more than 2,300 new jobs over the last ten years, of which 1,100 are in R&D. In this decade we increased revenues by 187% to € 3.89 billion. A total of € 2.4 billion has been invested in recent years. Research and development expenditures since the 2009 fiscal year have equalled about € 4.6 billion, including € 526 million in the 2021 fiscal year alone.
What are the next steps Infineon plans in Austria? Can you already tell us something about this now?
In September 2021 we opened our new and fully automated high-tech chip plant for power electronics. Production will be gradually ramped up over the next four years or so. We are working on solutions to the major global challenges of our time such as climate change, sustainable mobility, security and all data-related issues. This means continually thinking today about what will happen tomorrow. In this context, new semiconductor materials such as silicon carbide and gallium nitride will play a significant role. In turn, they will serve as the basis for even smaller and more energy-efficient chip solutions. In the future it will be possible to charge electric-powered vehicles in about ten minutes. These represent highly efficient chips for the energy transition. Villach is home to the company’s global competence centre for these new materials. This area will certainly play a significant role in our future investment planning.
Do you have any wishes with respect to the Austrian business location or Austrian Business Agency?
This concerns the positioning of Austria as a top business and work location and place to live. For this reason, it continuously requires added impetus and offerings for investments, international talents and skilled workers. We need the best minds in Austria in order to remain competitive. Austria can offer a lot in this regard and enhance its visibility and recognition by acting quickly and unbureaucratically.
How has ABA supported Infineon?
ABA makes the quality and advantages of the business location visible internationally - to companies, investors and skilled international workers. The decisive point here is to make urgently needed skilled workers more aware of the business location. It is just as important to create a relevant ecosystem by having startups, SMEs, large companies, research institutions and component suppliers locate their operations here in order to succeed as a real technology region. ABA’s activities support us in this regard. Thanks to our work in microelectronics, we are at the cutting edge of decisive developments for a better and more climate-friendly future. At the same time, we are also operating in a region where people like to go on holiday. This is an extremely attractive combination and an optimal basis for further innovation.
And finally, one last question: what do you personally value the most about Austria?
Austria not only plays a vital role in the “heart of Europe” from a geographical standpoint. It is linked by many projects focusing on education, research, business and regional development. Intensive networking, openness and thinking out of the box are particularly crucial right now considering the challenges posed by the climate crisis, the energy transition, digitalisation and structural changes. Austria has achieved a great deal in this respect and will continue to do so in the future.
Infineon Technologies Austria AG
Founded in the year 1970, Infineon Technologies Austria stands for an effective combination of innovative research and high-quality production today. With a workforce of 4,820 employees from 73 nations, of whom 2,100 are involved in research and development, the company generated revenue of about € 3.9 billion in the 2021 fiscal year. Research expenditures of € 516 million in 2021 make Infineon Austria one of the most research-intensive companies in the country.
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