Jochen Hanebeck, CEO of German chip maker Infineon, revealed in a recent interview that Infineon is localizing the production of commodity-grade products in its quest to maintain close ties with Chinese buyers.

Customers in China are asking for localized production of parts that are difficult to replace,” Hanebeck said. That's why we're moving some of our products to foundries in China, where we have our own back-end manufacturing, so that we can address the security of supply concerns of our Chinese customers.”

Information shows that Infineon set up a manufacturing base in Wuxi, China, as early as 1996, but the plant was mainly engaged in back-end packaging manufacturing. Currently Infineon does not have its own wafer manufacturing plant in China. Therefore, what Hanebeck said is that part of the chip's front-end manufacturing will be handed over to the domestic foundry to manufacture.

Hanebeck did not detail the specific percentage of relevant products that are planned to be manufactured in China, but he said it depends on the development of the product category and the market. “We are willing to localize highly innovative power semiconductors,” such as ”in our factories in Europe and Southeast Asia.” He added.

Infineon is currently the world leader in automotive MCUs and power semiconductors. According to market researcher TechInsights, the global automotive chip market will grow by 16.5% in 2023. Infineon is also the world's largest automotive MCU (microcontroller) manufacturer, the company's sales in the automotive MCU field increased by nearly 44% from 2022, with a global market share of about 29% in 2023. Its products are mainly used in electric vehicles, data centers and other devices for power usage. Its wafer manufacturing is centralized in Germany, Austria, and Malaysia.

It is worth noting that before this, automotive chip maker STMicroelectronics has announced that it will hand over its 40nm MCU to Hua Hong Group OEM. Subsequently, automotive chip maker NXP also revealed that NXP is still trying to find a way to serve those who need China's production capacity of customers, and said, “We will establish a China supply chain. As NXP already has its own packaging and testing plant in Tianjin, this statement means that part of the chip's front-end manufacturing will also be placed in China.