Christoph Hammerschmidt EE Times (10/13/2009 12:20 PM EST)

MUNICH, Germany — With Infineon's Dresden fab reaching full utilization and in the company's other production sites the utilization climbing, the question arises as to the company's manufacturing perspectives. There is plenty of headroom for growth, Infineon CEO Peter Bauer says.

The period of short time working earlier this year seems forgotten in Infineon's Dresden fab, its main production site. The company recently said the utilization in that fab is about to hit the ceiling; at the same time it announced expansion investments, albeit at a small scale. What drives the recovery of the company whose ability to survive was seen as questionable a few months ago? In a press roundtable at the eCarTec congress in Munich, Infineon CEO Peter Bauer answered some questions.

According to Bauer the utilization at the Dresden plant was driven by strong demand in several segments. The fab manufactures logic devices for a broad range of applications, from smart card chips to automotive and wireless. At a lesser extent, the company at that location also produces devices for industrial control applications. Demand recovered in all three major segments, but it was particularly strong in the wireless business, explained Bauer.

Another reason for the high utilization at Dresden is that the company during the crisis started to move back production from foundries where it had outsourced them before. "It was important to us to utilize our own fab before we outsource production," Bauer said. Thus, some of Infineon's recovery goes at the expense of its foundry partners.

The recently announced expansion investments for the Dresden fab are dedicated to specialty technologies for automotive and other markets — "not the high volume devices," Bauer explained.

The company pursuits a clear production strategy, Bauer said: No own manufacturing for bulk CMOS below 65nm geometries. Smaller geometries will be outsourced to foundry partners. The same holds true for the case the production quantity eventually will exceed Infineon's capacities. For this reason, nobody should expect any investment in production from Infineon in the near or distant future as long as it deals about logic products, Bauer said.

In the power electronics segment which makes up to a sales percentage of roughly 25 percent for Infineon, the situation is "completely different", Bauer said. In this segment, Infineon regards the ability to manufacture as a decisive factor in the competition. Infineon's fab in Kulim which is dedicated to power semiconductors has lots of space to expand production. "The production hall there is larger than needed to accommodate the equipment currently active. This gives us the perspective to grow at low costs — but for the time being, our focus is on raising the utilization of the equipment installed." Bauer explained. The reason is plausible: Despite the current demand peak, the company has by far not yet recovered the production levels of 2007 / 2008, Bauer admitted.

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