Heat pump boom causes Germany’s biggest chip maker to expand capacity

Germany’s shift away from Russian gas, coupled with government plans to phase out fossil fuel heating systems, has led to a massive heat pump boom that is forcing the country’s biggest semiconductor producer, Infineon, to expand capacity, business daily Handelsblatt reports. Computer chips are key components for heat pumps but they have been in short supply globally. The run-on heat pumps has ensured a high volume of orders at Infineon, said Peter Wawer, the company’s industry division head. “With the war in Ukraine, the business took on a whole new dimension. That will be extremely relevant for us,” he said. Infineon is “building up enormous capacity, but we can't keep up with the deliveries," he added, pointing out that demand for heat pumps has not only skyrocketed in Germany. “Heat pumps are now a global issue,” he continued. The Munich company expects sales to increase massively in the next few years. Handelsblatt notes that “a billion-dollar market is developing”.

The International Energy Agency (IEA) estimates that 1.5 million heat pumps are currently being installed each month, or 18 million a year. By 2030, that figure is expected to reach 5 million a month 60 million a year. According to the Federation of German Heating Industry (BDH), 236,000 heat pumps were sold in Germany in 2022 — 53 percent more than in the previous year — while sales of classic gas heaters fell by 8 percent. Thermotechnik, a subsidiary of Bosch, recently reported that last year its heat pump business grew 75 percent in Germany and 54 percent worldwide. Heating manufacturers are likewise expanding production facilities. German group Vaillant is about to open a new heat pump mega-factory in Slovakia with an annual production capacity of 300,000 units, doubling its capacity to more than half a million heat pumps a year. Rival Viessmann, meanwhile, is investing 200 million euros in a production site in Poland.