Infineon steps up push to tap into AI opportunities in China

German semiconductor giant Infineon Technologies AG is doubling down on its push to capture artificial intelligence-driven opportunities in China, as the country sees explosive growth in emerging industries such as robots, AI data centers and software-defined vehicles.

The Munich-based chipmaker reported full-year 2025 fiscal revenue of 14.662 billion euros, with the company's China region accounting for 38 percent of its global revenue, up from 34 percent a year earlier.

The company's "In China, For China" localization strategy, officially launched in June 2025, has been steadily implemented across production, innovation, ecosystem and operations.

David Poon, president of Infineon Greater China Region, said China is a critical market in Infineon's global business, with significant strengths in e-mobility, software-defined vehicles, energy infrastructure and humanoid robotics, while also being a major market for AI and data center development.

"Infineon is accelerating the development of a customer-centric local innovation ecosystem, delivering customized and diversified system-level semiconductor solutions to drive sustainable growth with our customers," Poon said.

At the heart of Infineon's strategy is its "From Grid to Core" End-to-End power solutions for AI Infrastructure, which provides comprehensive solutions spanning power generation, transmission and distribution, energy storage, data center infrastructure, and physical AI applications including electric vehicles and robotics. The approach enables full-spectrum enablement — from energy supply to computing power support, and from infrastructure to end-user scenarios.

The urgency of this strategy is underscored by the soaring power demands of AI infrastructure. Poon noted that AI rack power requirements have climbed from around 200 kilowatts two years ago to 500 kilowatts in some advanced deployments today, with next-generation racks expected to reach 1,000 kilowatts within one to two years.

For the 2026 fiscal year, Infineon expects AI data center power supply revenue to reach about 1.5 billion euros, rising to around 2.5 billion euros in fiscal 2027.

The localization push has taken tangible shape across multiple fronts. In production, the company is advancing a "product plus service" dual-drive model to accelerate new product introductions and supply chain responsiveness.

In innovation, Infineon has strengthened its AI system application teams to streamline the path from product definition to mass production. Last week, the company opened its Innovation Space in Shanghai to expand local application innovation platforms.

On the operational side, the upgraded Infineon Distribution Center (China), which received Shanghai Customs AEO certification in January 2026, is scheduled to begin operations in August 2027 as the company's largest finished goods distribution center by single-building floor area globally.

According to TechInsights, the global automotive semiconductor market reached $74.4 billion in 2025, and Infineon secured the No. 1 position for the sixth consecutive year with a 12.8 percent market share. In automotive microcontrollers — a strategically critical segment — the company's share surged to 36.0 percent in 2025, up 3.9 percentage points year-over-year. Infineon also ranks first globally in power semiconductors and overall microcontrollers.

Effective July 1, 2026, Infineon streamlined its organizational structure from four divisions to three — automotive, power systems, and edge systems — to enhance operational agility and accelerate system-level innovation.