In June 2025, Infineon Technologies, a global semiconductor giant, officially announced its localization strategy "In China, For China", marking an unprecedented level of attention to the Chinese market. This strategy is not only a response to China's position as the world's largest automotive market and manufacturing hub, but also reflects Infineon's ambition to stay local and continue to grow in the face of emerging technologies.
As early as 1995, Infineon opened a factory in Wuxi, marking the beginning of its development in China. According to the financial report for fiscal year 2024, Greater China has contributed 34% of its global revenue, making it one of the most important regional markets. At a time when the global semiconductor industry is becoming more volatile in the cycle, Infineon's choice to increase its weight in China is a strategic choice based on in-depth insight into the potential of the local market.
Ⅰ Emerging industries are driving the Chinese market up
Emerging application scenarios such as AI, robotics, and electric vehicles are reshaping the global semiconductor demand landscape. According to the data, the global AI market will reach US$136 billion by 2025, of which the Chinese market will exceed US$15 billion, accounting for about 11%. In terms of robotics, China's share of the global market will grow from 30% in 2023 to 31.5% in 2026.
This trend has made China a new highland for global chip manufacturers to compete. Infineon's acceleration of localization deployment is intended to leverage its technological advantages and integration with China's industrial ecosystem to take the lead in the next round of growth.
Figure: In June 2025, Infineon officially announced its localization strategy "In China, For China"
Ⅱ A four-pillar strategy to promote local integration
Infineon's localization strategy is carried out from innovation, operation, production to ecological cooperation, and builds a complete business closed loop for the Chinese market.
1. Localized innovation
Infineon plans to launch customized products for the automotive and industrial sectors in the Chinese market. Its next-generation 28nm TC4x MCU family is expected to complete local coverage of its main products by 2027. This move not only improves customer adaptability, but also enhances its differentiated competitiveness in China's chip market.
2. Localized operations
The Wuxi plant is the core base of Infineon's manufacturing and operations in China. At present, the plant has more than 1,500 employees, more than 30,000 square meters of clean room area, and has deployed a number of automation systems, and is expected to achieve 70% automation rate by 2026. Infineon is also actively deploying logistics and customer service systems to improve market responsiveness and enhance customer stickiness.
3. Local production
In terms of production capacity, Infineon is expanding its local manufacturing capabilities for core products such as MCUs, MOSFETs and IGBT modules. Some low-power IGBT modules have achieved local mass production, and the next generation of 28nm products will also achieve front-end and local cooperation. This can help shorten supply chain cycles, increase local delivery capabilities, and reduce the impact of external policy risks on supply.
4. Localized ecology
Infineon is also committed to building a network of local partners, including local companies, universities and research institutes to promote application innovation. In the field of robotics, its chip products have been applied to wireless charging, energy management and other links. By co-building the ecosystem, Infineon has increased the depth of its technology implementation and helped local partners to improve their capabilities and achieve win-win development.
Ⅲ Technology and market advantages support each other
Infineon is the world's leading technology provider for power semiconductors and automotive MCUs. In 2024, its automotive MCU market share will jump to the first place in the world, and for the first time, it will rank first in the overall MCU market. In the second quarter of the 2025 fiscal year, the company's revenue reached 3,591 million euros, up 5% quarter-on-quarter.
In AI-related fields, Infineon is also making efforts. It expects revenue from its AI-related business to grow from EUR 600 million in fiscal 2025 to EUR 1 billion in fiscal 2026, which will be an important driving force for business structure optimization.
Ⅳ In the face of challenges, the layout of China is to take the initiative
At present, the global semiconductor industry is in a downward cycle, with high automotive chip inventories and pressure on prices. Infineon has also lowered its forecast for fiscal 2025, expecting a slight decline in revenue, gross margin of around 40 percent, profit margins of 14 to 16 percent, and capital expenditures of 2.3 billion euros.
Against this backdrop, China has become the key to breaking through the bottleneck of growth. Strengthening the local production and supply system not only reduces geopolitical uncertainties, but also brings greater market flexibility and resilience to Infineon.
Ⅴ The high-level statement highlights the strategic focus
David Pan, Senior Vice President and President of Infineon Greater China, said that the company will continue to rely on its technical capabilities and local resources to invest in the Chinese market and respond to the "China speed". Fan Yongxin, General Manager of Infineon Wuxi, also pointed out that the Wuxi plant will better serve customers in China through improved efficiency and responsiveness.
These high-level statements send a clear signal that Infineon sees the Chinese market as a long-term strategic location rather than a short-term opportunity.
Ⅵ Two-way promotion: China's industrial chain resonates with international enterprises
Infineon's in-depth localization will not only increase its market share in China, but also form a positive impetus for the upgrading of China's semiconductor industry chain:
* Driving technological improvement: Infineon's R&D and manufacturing investments in China will accelerate the quality improvement of the local supply chain;
* Helping talent training: Its local operation system cultivates engineers and management talents with an international perspective for China Semiconductor;
* Enhance the sense of competition: Under the pressure of international giants, local manufacturers will accelerate product and technology iteration and enhance their core competitiveness.
To a certain extent, the localization of international companies such as Infineon has also provided a "external force" growth momentum for China's semiconductor industry.
Ⅶ Conclusion: Build a new pattern together and win the era of intelligence
Overall, Infineon's localization in the Chinese market is not only a strategic adjustment to cope with the uncertainty of the global market, but also a firm recognition of the long-term value of China's semiconductor market. Its deep integration from products, operations, production to ecology is expected to increase its market share in AI, electric vehicles, industrial automation and other fields, and promote the entire Chinese semiconductor industry chain to leap to high value-added links.
In the future, Infineon will interact more closely with the Chinese market, and the two parties will work together to build a stronger technology and industrial ecology to inject continuous impetus into the global semiconductor industry.
