The title is a bit sensationalist and - unfortunately - misleading. This project was greenlit in February 2023 and is not connected to the recent EU Chips / Data Center / Sovereignty Package that came out in June this year. What is notable is that the EU funding grant of 1bn was officially approved in February 2025.
Technically this is a 300mm power + analog/mixed-signal fab. This means MOSFETs, IGBTs, plus wide-bandgap SiC and GaN devices. No FinFET/GAAFET, nothing in the 5/3/2nm class.
The framing of the article that this is AI-related is questionable. Infineon can market these chips to the AI market or the Automotive or renewable Energy market.
This helps Europe's automotive and industrial sectors from being overly dependent on Asian intermediate parts in this space, which is a much more critical dependency from a NatSec perspective compared to bleeding edge compute.