German chipmaker Infineon Technologies said it would invest around 2.4 billion euros ($2.8 billion) in 2022 as compared with about 1.6 billion euros this year.

“We are initially investing in existing plants,” finance chief Sven Schneider told Reuters. He said Infineon was considering whether it needed to add more capacity, but added it was too early to decide on that yet.

Infineon is the leading supplier of chips to the auto industry. Infineon forecast revenue would grow by a mid-teens percentage next year, with a segment result margin – a measure of operational profitability – of around 20 percent, up from a 2021 target for 18 percent.

“The main part of the sales growth will come from capacity building, but also a decent part from higher prices, some of which we will pass on to customers,” Schneider said.

The company blamed a lack of investment in new capacity by its manufacturing partners for tightness in semiconductor markets as demand rebounded after coronavirus lockdowns, disrupting chip supplies especially in the car industry.

Contract chipmakers have invested chiefly in production of higher-margin processors used in devices like smartphones, leaving existing plants unable to meet demand for the older chips used in cars.

Infineon opened a 1.6 billion euro plant in Austria last month, boosting its ability to supply power chips for cars, data centres and renewable power.

The Munich-based firm could decide to build another factory soon, assuming the rapid adoption of electric vehicles continues to take up capacity in its existing plants, Stifel analyst Juergen Wagner predicted.

Schneider said he expected the shortage of chips to drag on well in to 2022, welcoming European efforts to increase semiconductor production capacity.

Infineon confirmed guidance for 2021 revenues of 11 billion euros.

The company has faced problems meeting delivery commitments after a winter storm knocked out a plant in the United States and lockdowns disrupted operations in Malaysia.