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Infineon to invest US$1bil in new factory in Kedah |
Thursday, December 09, 2004 |
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INFINEON Technologies AG, Europe's second largest maker of semiconductors, plans to invest about US$1bil in a new factory in Kedah's Kulim High Tech Park as chief executive officer Wolfgang Ziebart expands the company's motor vehicle chip business.
The plant will begin production in 2006 and employ 1,700 people at full capacity, Munich-based Infineon said in an e-mailed statement yesterday. The factory will add to similar plants Infineon runs in Germany and France, the company said.
The factory is “an important step in continuing our successful business with chips for motor vehicle and industrial power applications,'' Ziebart, who took over in September, said in the statement. “With this move, we are systematically expanding our presence in the future market of Asia.''
Under Ziebart, a former executive in the motor vehicle industry, Infineon is pulling out of businesses he considers too risky or expensive, and focusing instead on such areas as chips for cars, where demand is rising as manufacturers add more electronics to their vehicles.
The planned plant is the second US$1bil factory investment Infineon has announced this year.
Expanding production in Asia will also make Infineon less susceptible to currency swings, Ziebart said. About two-thirds of the company's cost base is in euros, and chief operating officer Andreas von Zitzewitz had in November said the value of the euro, which advanced to a record on Tuesday, is a “very big headache.''
Infineon said it was the world's second-largest producer behind Freescale Semiconductor Inc in the US$13.3bil market for chips used in cars, and in Europe, where it has a market share of 15%, ranks behind STMicroelectronics NV.
Siemens VDO, the motor vehicle division of Siemens AG and an Infineon customer, had in June forecast electronics components to represent about 40% of a car's value by 2010, compared with 23% now. Only 10% of all cars in Europe are equipped with a satellite-based navigation system.
Infineon forecast the market for electronics components in cars to grow by about 10% in the next 10 years. The company also makes chips that go in personal computers, mobile phones and security systems.– Bloomberg
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