Infineon Revives Five Year Old $1 Billion Expansion Project

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Infineon Technologies AG (NYSE:IFX) (Dresden, Germany) is completing construction of a $1 billion expansion at its Sandston (Richmond metro area), Virginia plant. The expansion, originally reported by Industrialinfo.com in late 2000, was scheduled to take place that year, but was shelved because of the economic slowdown and low demand for memory chips. Over the past year, the economy has been heating up, chip sales have rebounded and Infineon has decided that it was time to revive the project, which will add 800 jobs to a plant that currently employs almost 2,000.

Before the project was put on hold in June of 2001, Austin Commercial Industries (Dallas, Texas) was the engineering and construction firm working on the project. Austin Commercial managed to complete the construction of a 600,000 square foot building shell addition, which includes 100,000 square foot clean room space, 500,000 square feet of supporting space, which includes HPM (Hazardous Material Production) rooms and chemical mechanical polishing. An additional 150,000 square feet of office space was also added. The interior could not be completed before the project was placed on hold.

Since the project's revival in early 2004, it has been moving very rapidly. Construction on the interior began in the early summer of 2004 and is expected to be complete in early 2005, giving the plant the capacity to process 25,000-30,000 300-mm wafers per month. Since Austin Commercial was able to complete the building shell in 2001, Infineon has been performing construction management oversight for the interior build-out. This project is following the industry trend of converting existing 200-mm fabrication plants (Fabs) to 300-mm production facilities. See related November 3, 2004, article covering this trend - Demand for 300-Millimeter Chips Fuels Global Semiconductor Manufacturing Investments. Infineon will not discontinue the production of 200-mm wafers but will instead produce 300-mm wafers in addition to the 200-mm. It is also ramping up production of 300-mm wafers in Dresden, Germany, where Dynamic Random Access Memory (DRAM), Logic Products, and Flash memory products are produced. The expansion will enable the Sandston plant to increase production capacity of DRAM chips by more than 100%. The expansion will give the plant the flexibility to rapidly increase additional capacity as market demand dictates.

The Richmond, Virginia facility was founded as White Oak Semiconductor in 1996 and began production of memory products in August of 1998. Infineon's U.S Headquarters is located in San Jose, California, with worldwide headquarters in Munich, Germany. The company employs approximately 2,000 people in the U.S. and 32,300 globally. Infineon is currently the sixth largest semiconductor manufacturer in the world. Richmond is Infineon's only North American production facility. Infineon also operates seven R&D centers in the United States. Infineon been a player in the North American semiconductor market since 1952, beginning as the semiconductor division of Siemens in a joint venture with Motorola. Infineon bought out Motorola's stake in the company and then was spun off as a separate entity in 1999 with initial public offering following in 2000.

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