Infineon Technologies AG — Call Transcript 2016

Oct 11, 2016

Automotive Conference Call 11 October 2016

Peter Schiefer Division President Automotive

Infineon's position in the automotive semiconductor universe

* See glossary; ** Divestment of Standard Products business announced

Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2016

Megatrends shaping the automotive market; significantly increasing semi content per car

ADAS*/AD*

› ADAS* and AD* (automated driving) are critical enabler to reduce the number of fatalities and serious injuries ("Vision Zero")

* See glossary

Clean cars

• › To reach CO² emission goals, the automotive industry has to focus on
• a higher efficiency of the classic ICE*, and
• the electrification of the drivetrain (xEV*)

Connectivity/security

• › Advanced connectivity is driven by making the car part of the internet
• › Connectivity must be secure

Overview of an ADAS*/AD* system

More sensors required for any next automation level lead to sensor "cocoon" in level 4/5

	Level of automation
	Level 2	Level 3	Level 4/5
	Automatic emergency brake/ forward collision warning
Application*	Parking assist		Valet parking
	Lane keep assist	Highway assist	Highway and urban chauffeur
Radar # of modules**	≥ 3	≥ 6	≥ 10
Camera # of modules**	≥ 1	2	≥ 8
Lidar # of modules**	0	 1	≥ 1
Others	Ultrasonic	Ultrasonic Interior camera	Ultrasonic Interior camera V2X***

* Source: VDA (German Association of the Automotive Industry), Society of Automotive Engineers

** Market assumption; *** See glossary

ADAS*/AD* semi growth driven by radar and camera sensor modules over the next 5 years

Bill of material estimates include all type of semiconductors***

* See glossary

** Source: Strategy Analytics, IHS Markit, Infineon; *** e.g. radar includes µC (see page 7)

Sense Compute Actuate

Infineon's radar solutions reduce development efforts on customer side

Infineon's value proposition

• › The SiGe*-based radar solutions are the best solutions on the market
• › Infineon's radar solutions facilitate the system integration at customers and reduce their development efforts
• › Infineon's optimized solutions safeguard component interoperability and comply with functional safety requirements

* See glossary

Radar technology roadmap

• * See glossary
• ** not offered by Infineon

Based on current design wins, Infineon will outgrow 24 / 77 GHz radar sensor IC market

› Infineon is strengthening its market leadership in the radar sensor IC market

* Source: IHS Markit, "ADAS Sensor Market Database – H1 2016", August 2016

Infineon enters lidar business through acquisition of Innoluce

Key facts about Innoluce

• › founded in 2010 as an entrepreneurial spinoff of Royal Philips
• › fabless semiconductor company
• › headquartered in Nijmegen, The Netherlands
• › key competence on
• › miniature MEMS-based laser scanning modules enabling long range (>200 m) and high resolution (<0.1°)
• › corresponding mirror control ASIC

Deal rational

• › Infineon completes its ADAS sensor system offering
• › Infineon intends to repeat its radar success story
• › Infineon will make lidar an affordable feature for every new-built car

Infineon opens the door for mass-deployable lidar systems for automated driving

MEMS-based lidar reference design

• introduced in premium cars within the next couple of years are based on mechanical scanning mirrors which are bulky and less robust
• › In order to enter the car mass market lidar must get rid of mechanical parts
• › MEMS-based lidar systems are
• › more compact
• › more cost-effective
• › more robust

Camera systems: AURIX™ 32-bit real-time µC is key element as host controller

2016-10-11 Copyright © Infineon Technologies AG 2016. All rights reserved. 12

AURIX™ as market reference for safe and secure applications

* See glossary; ** for radar

From L2 to L3, requirements for redundancy boost semi BoM* for driving functions by 30%

• * See glossary
• ** "Hands and feet off, eyes and brain on" (see page 16)

Infineon's product portfolio fosters revenue growth in ADAS*/AD* for the next decade

ADAS*/AD* semi BoM* growth is driven by radar and camera sensor modules

	Market penetration per level of automation
g		L5 Driverless
n vi ri			2035 up to 10m vehicles p.a.
d d e t a m		L4 Fully automated
			2030 up to 10m vehicles p.a.
o t u		L3 Highly automated
A			2025 up to 10m vehicles p.a.
* S A D	L2 Partly automated
			2020 up to 20m vehicles p.a.
A		L1 Assisted
			2015 up to 20m vehicles p.a.
		2015	tomorrow

* See glossary Source: IHS Markit, McKinsey, UBS, Infineon

Outlook: Infineon benefits from trend towards shared autonomy

Infineon enables shared autonomy			Increasing semi content
t n e t n o c mi e s g n si a e r c n I	g n vi ri d d owned e at m autonomy o ut A	shared autonomy Vehicle sharing	› Legislation will drive ADAS/AD to reduce the number of fatalities and serious injuries › With the level of automation the average semi content of cars will increase
			Increasing mobility demand
	today	shared economy Increasing mobility demand	› The demand for ad-hoc mobility will increase
			› Shared autonomy will be available for user groups which currently use other means of transport

› Impact on fleet of vehicles: Shared autonomy leads to higher utilization and thus faster replacement cycles

* See glossary

Megatrends shaping the automotive market; significantly increasing semi content per car

ADAS*/AD* Clean cars

› ADAS* and AD* (automated driving) are critical enabler to reduce the number of fatalities and serious injuries ("Vision Zero")

* See glossary

• › To reach CO² emission goals, the automotive industry has to focus on
• a higher efficiency of the classic ICE*, and
• the electrification of the drivetrain (xEV*)

Connectivity/security

• › Advanced connectivity is driven by making the car part of the internet
• › Connectivity must be secure

Technology roadmap: SiC* is the option of choice for most demanding xEV* subsystems

› Advancements in SiC* technology will penetrate more and more xEV* subsystems over the course of the next years

* See glossary

Infineon offers the most complete portfolio of power semis to match OEM and tier-1 needs

Infineon will benefit more and more from the increase in xEV* penetration

In 2015, 7 out of 10 top selling EVs* were powered by Infineon

World's top 10 selling EVs*	Sold cars in 2015	Drivetrain powered by Infineon
Tesla Model S	51,390	
Nissan Leaf	43,651	
Mitsubishi Outlander	43,269	
BYD Qin	31,898	
BMW i3	24,083	
Kandi Panda	20,390	
Renault Zoe	18,846	
BYD Tang	18,375	
Chevrolet Volt	17,508	
Volkswagen Golf GTE	17,282	

Source: InsideEVs.com, Baader Helvea Equity Research, Infineon

Megatrends shaping the automotive market; significantly increasing semi content per car

ADAS*/AD* Clean cars

› ADAS* and AD* (automated driving) are critical enabler to reduce the number of fatalities and serious injuries ("Vision Zero")

• › To reach CO² emission goals, the automotive industry has to focus on
• a higher efficiency of the classic ICE*, and
• the electrification of the drivetrain (xEV*)

Connectivity/security

• › Advanced connectivity is driven by making the car part of the internet
• › Connectivity must be secure
• › More information at Infineon Automotive presentation (pp. 19)

* See glossary

ADAS*/AD*, clean cars, and adoption of premium features drive growth

~8% p.a. through-cycle growth

* See glossary

Summary

Our achievements

1 across the main applications powertrain, safety, body and comfort** #2 overall position in the automotive semi market*** 40 years of experience in the automotive semiconductor market 50% of revenue growth will stem from ADAS*/AD* and clean cars over the next 5 years Outgrow the automotive semiconductor market Sustain and expand high market share in ADAS*/AD* and clean cars Our targets

• * See glossary
• ** Source: Strategy Analytics, Infineon; *** Source: Strategy Analytics

Glossary

ACC	adaptive cruise control
AD	automated driving
ADAS	advanced driver assistance system
AEB	automatic emergency braking
BoM	bill of material
EPS	electric power steering
EV	electric vehicle
FCW	forward collision waring
HEV	mild and full hybrid electric vehicle
ICE	internal combustion engine
micro-hybrid	vehicles using start-stop systems and limited recuperation
mild-hybrid	vehicles using start-stop systems, recuperation, DC-DC conversion, e-motor
PHEV	plug-in hybrid electric vehicle
SiC	silicon carbide
SiGe	silicon germanium
V2X	vehicle-to-everything communication
xEV	all degrees of vehicle electrification (EV, HEV, PHEV)