Infineon Technologies AG

Earnings Release • Nov 24, 2010

Web Cast Presentation Fourth Quarter FY 2010 London, 23 November 2010

Infineon Technologies AG

Ulrich Pelzer Corp. Vice President Corp. Development & IR Peter Schiefer Head of Operations, Division VP Industrial & Multimarket

Infineon Results and Outlook

Business Highlights

Infineon"s Superior Manufacturing Technologies

In Q4 Revenue and Profitability of IFX Improved

Revenues +6%	Net Income	[EUR m]	Q3 FY10	Q4 FY10
942 885		Revenues	885	942
		Segment Result	138	171
	390 126	Net Income	126	390
	Q4 FY10 Q3 FY10	Employees	25,978	26,654
		Free Cash Flow	173	236
		Gross Cash Position	1,514	1,727
		Net Cash	1,108	1,331
		Equity Ratio	51%	53%

Notes: IFX Continued Operations (excl. WLS) for Revenues and Segment Result and Free Cash Flow; Employees are all current IFX employees without temporary employees; Net Income, Gross Cash, Net Cash and Equity Ratio as reported.

23 November 2010

Copyright © Infineon Technologies 2010. All rights reserved.

SR Margin from Cont. Ops Was 18%; Net Income EUR 390m

Copyright © Infineon Technologies 2010. All rights reserved. 23 November 2010 Page 4

Higher Investments in Response to Demand and 300mm-Thin-Wafer Pilot Line

1) For definition please see slide 34in appendix.

Net Cash Rose to EUR 1.3bn

* Consists of Convertible Bond 2014 (nominal value EUR 196m; book value EUR 153m).

• Strong improvement of net cash position driven by large free cash flow from continuing operations of EUR 236m in Q4 FY10.
• Low leverage including in-the-money convertible 2014.

WLS Transaction Will Enable a Strategic Cash Position

[EUR bn]

Another Year of Growth in FY 2011; Continuing Strong Operat. Performance

Infineon Results and Outlook

Business Highlights

Infineon"s Superior Manufacturing Technologies

Revenue Split by Division

12-months FY 2010 revenue split

Infineon Holds #1 Positions in All Target Markets

Source: Strategy Analytics, May 2010

August 2010

October 2010

Chip Card & Security Segment (CCS)

Revenue and Segment Result from Q1 FY08 to Q4 FY10

Sales in Q4 was driven by higher demand in certain government ID projects. Segment result doubled to EUR 12m compared with Q3.

Automotive Segment (ATV)

Revenue and Segment Result from Q1 FY08 to Q4 FY10

Sales in Q4 was driven by continued strong demand in all regions and across the entire product range. Segment result margin again slightly up to 17.1%.

Four Infineon Sensors in Each and Every Car Worldwide on Average

25m Bicycles Sold in China in 2009; 1 Out of 3 Uses Infineon Semiconductors

Infineon's solutions and system know-how for e-vehicle applications

Microcontroller

High-performance 8- and 16-bit µC

MOSFETs

OptiMOS and CoolMOS

Gate Driver ICs

3-phase Bridge Driver ICs

Power Supply

• Linear and DC/DC Voltage Regulator
• PFC/LLC Controller
• CoolSET
• SiC Diodes

Communication

CAN and LIN Transceivers

Sensors

• iGMR Angle Sensors
• Hall Switches
• Current Measurement

LED Lighting

• Linear LED Driver IC´s
• Switched Mode LED Drivers
• Smart Power Switches

Industrial & Multimarket Segment (IMM)

Revenue and Segment Result from Q1 FY08 to Q4 FY10

Revenue, segment result and segment result margin came in at an all time high in Q4 of EUR 413m, EUR 98m and 23.7%, respectively.

IMM Achieves Around 3/4 of its Revenues With Power Products; 1/4 With Non-power Products

Balanced Application Portfolio; More Than Half of IMM Sales in APAC

IMM revenue split by region

IFX Continues to Gain Market Share in Both Power Discretes and Power Modules Market

Source: IMS Research, Global Market for Power Semiconductor Discretes & Modules, August 2010.

Demand for Energy Continues to Grow – ~1/3 of Energy Consumption is Electricity

World energy consumption, 1970 – 2035

World Energy Consumption 2007

Approximately one third of global energy use is based on electricity.

Sources: Energy Information Administration (EIA), International Energy Outlook 2009, 2010, BP World Energy report

• 1) Infineon estimates based on IEA 2006
• 2) British thermal unit (Btu): 1 Btu = 1,05506 kJ

Power Semiconductors Play a Major Role in the Whole Electrical Energy Supply Chain

Copyright © Infineon Technologies 2010. All rights reserved. 23 November 2010 Page 21

Continuous Growth in Wind and Solar; First Design-Wins in Chinese Wind Market

Solar power

• Solar installations typically range from ~5 kW (on-roof PV) to ~50 MW (solar farm).
• Power semiconductor content in solar installations accounts for ~ EUR 25 to EUR 350,000.
• Products: CoolMOSTM, SiC diodes, discrete IGBTs and IGBT modules.

Wind power

• Wind mills typically range from ~2 MW (on-shore) to ~5 MW (off-shore).
• Power semiconductor content in wind mills accounts for ~ EUR 6k to EUR 25k.
• Products: IGBT modules, thyristor discs and modules and complete inverter stacks.

Converter EconoDUAL™3

Shenzhen Hopewind

• First design-wins in China at Shenzhen Hopewind Electric Co., Ltd., a leading Chinese wind energy converter manufacturer.
• Infineon parts: EconoDUAL™3

Copyright © Infineon Technologies 2010. All rights reserved. 23 November 2010 Page 22

Motor Drives and Traction Are Propelled by Environmental Awareness and Urbanization

Energy efficient motor drives

Infrastructure

Transportation

Sources: Infineon AG, Siemens AG

Buildings

Drives and traction applications typically range from few kW to 100 MW.

• Power semiconductor content accounts for ~ EUR 5 (small drives) to EUR 100k in a high speed train.
• Products: power discretes, power modules and stacks, driver ICs.

CAV: Commercial, Agriculture and Construction Vehicles

China Railways Has Seen Strong Stimulus Support; Network Build-out Continues

The renaissance of trains: High-speed and urban electric trains

China's Ministry of Railways is planning to expand the operating length of the Rail network from 86,000 km in 2009 to 120,000 km by 2020. The corresponding fixed asset investment required is USD 450bn, of which USD 125bn has been spent already.

Very high-speed rail network: The Ministry of Railways expects to increase the high speed rail operating length from 13,000 km today to 20,000 km by 2020, implying 54% growth overall.

Urban/Mass transit markets: To support the plans to urbanize 300m people by 2030, the government wants to build out the transport network in metros. This is the fastest growing segment with the operating length growing nearly 6.5x, from 960 km in 2009 to 11,700 km by 2020.

Siemens Velaro Selected by EuroStar; EUR 50k to 100k Semi Content Per Train

• 10 trains ordered for EUR 600m in total.
• 130 IGBT modules per train resulting in EUR 50k to 100k power semiconducor content per train.
• Power semiconductors represent only 0.15 to 0.2% of system cost but contribut significantly to the entire functionality.

Highest Efficiency in Power Architecture is Key for Today's Computing Applications

• Worldwide approx. 145 mio(1) new desktop PCs are sold per year.
• 300 W silverbox running at average load of 50%.
• For 8 h per day electrical energy consumption would be 63,500 GWh per year.
• 1% efficiency increase saving of 635 GWh per year net savings of ~320,000 tons CO2/year(2) .

• 2009: advanced Infineon power technologies like CoolMOSTM and SiC enabled reduction of CO2 emissions of approx. 140,000 tons!

• Computing applications typically range from 50 W to ~3 kW.

• Power semiconductor content in computing applications range from EUR 1 to EUR 50.
• Products: CoolMOSTM, OptiMOSTM, SiC products, driver ICs and digital power controllers (PrimarionTM).

(1) Infineon estimate based on external analyst figures (Gartner; JPMorgan, 2010). (2) Assuming 500 g CO² /kWh (average based on values from literature ranging from 375 g CO² /kWh (EU-commission) to 750 g CO² /kWh (Solar World).

Copyright © Infineon Technologies 2010. All rights reserved. 23 November 2010 Page 26

Infineon Results and Outlook

Business Highlights

Infineon"s Superior Manufacturing Technologies

Unique Manufacturing Know-How in Ultra-thin Wafers

IGBT transistor

Manufacturing competencies

• Ultra-thin wafer handling
• Frontside processing
• Backside processing
• Outstanding cost performance, e.g. IGBTs and SiC diodes

Rev* cum = ~EUR 136m

Unique Technology and Manufacturing Know-How in Silicon-Carbide (SiC)

Applications

• Power factor correction in high-end power supplies (server, telecom, flat panel displays).
• Solar inverter.
• Speed-controlled motors for traction and drives.

Silicon-carbide diode Manufacturing competencies

• 100 mm SiC manufacturing line in Villach, Austria, on standard 150/200mm equipment.
• World"s 1st 10x100 mm SiC epi system.
• About 30-50% smaller chip size than competition with same performance.
• Special high-temperature processes.

Outstanding Electrical Performance With CoolMOS™ Super-Junction Power MOSFETs

Applications

• Power supplies for servers, PCs, notebooks, games consoles, adapters.
• Graphics boards
• Lighting
• Solar inverter
• Automotive

Super-junction transistor Manufacturing competencies

• In the late 1990s, a super-junction transistor was invented, dubbed CoolMOS™.
• Manufacturing improvements led to a cost reduction by a factor of 4.
• Reduction of RDS(on) by a factor of 6.

Rev* cum = ~EUR 1.4bn

.XT Technology Will Improve Lifetime By a Factor of 10 Versus Standard Technology

• Emerging applications requiring longer life time.
• Trend to higher power density leads to new internal packaging technology.
• .XT technology is a set of internal connection technologies that will improve all life time limiting areas within an IGBT module.
• Start of Production: 2011.

What Is .XT Technology?

Notes

Investments =

• "Purchase of property, plant and equipment"
• • "Purchase of intangible assets, and other assets" incl. capitalization of R&D expenses

Working Capital =

• ("Total current assets"
• "Cash and cash equivalents"
• "Available-for-sale financial assets"
• "Assets classified as held for disposal")
• ("Total current liabilities"
• "Short term debt and current maturities of long-term debt"
• "Liabilities classified as held for sale")

Net Inventory Reach (days of inventory; quarter-to-date) = ("Net Inventories" / "Cost of goods sold") * 90

DSO (days of sales outstanding; quarter-to-date) = ("Trade accounts receivables (net)" / "Revenue") * 90

DPO (days of payables outstanding; quarter-to-date) = 
("Trade accounts payables" / ["Cost of goods sold" + "Purchase of property, plant and equipment"]) * 90

Infineon Consolidated Statements of Operations (IFRS) (unaudited)

	3 months ended			12 months ended
in Euro million	Sep 30, 10	Jun 30, 10 (1)	Sep 30, 09 (1)	Sep 30, 10	Sep 30, 09 (1)
Revenue	942	885	609	3,295	2,184
Cost of goods sold	(563)	(553)	(427)	(2,058)	(1,687)
Gross profit	379	332	182	1,237	497
Research and development expenses	(114)	(100)	(78)	(399)	(319)
Selling, general and administrative expenses	(103)	(100)	(77)	(386)	(332)
Other operating income	7	2	5	18	17
Other operating expense	(15)	(15)	13	(122)	(46)
Operating income (loss)	154	119	45	348	(183)
Financial income	5	5	1	29	101
Financial expense	(16)	(12)	(37)	(95)	(154)
Income from investments accounted for using the equity method	1	4	2	8	7
Income (loss) from continuing operations before income taxes	144	116	11	290	(229)
Income tax benefit (expense)	49	(13)	(1)	22	(4)
Income (loss) from continuing operations	193	103	10	312	(233)
Income (loss) from discontinued operations, net of income taxes	197	23	1	348	(441)
Net income (loss)	390	126	11	660	(674)
Non-controlling interests	-	-	-	1	(48)
Shareholders of Infineon Technologies AG	390	126	11	659	(626)

Basic and diluted earnings (loss) per share attributable to

shareholders of Infineon Technologies AG (in Euro):

Weighted average shares outstanding (in million) – basic	1,087	1,087	977	1,087	855
Weighted average shares outstanding – diluted	1,172	1,172	977	1,171	855
Basic earnings (loss) per share from continuing operations	0.18	0.10	0.01	0.29	(0.27)
Basic earnings (loss) per share from discontinued operations	0.18	0.02	-	0.32	(0.46)
Basic earnings (loss) per share	0.36	0.12	0.01	0.61	(0.73)
Diluted earnings (loss) per share from continuing operations	0.16	0.09	0.01	0.28	(0.27)
Diluted earnings (loss) per share from discontinued operations	0.17	0.02	-	0.30	(0.46)
Diluted earnings (loss) per share	0.33	0.11	0.01	0.58	(0.73)

(1) Prior period figures have been adjusted.

Infineon Consolidated Statements of Financial Position (IFRS) (unaudited)

in Euro million	Sep 30, 10	Jun 30, 10 (1)	Sep 30, 09 (1)
Assets
Current assets:
Cash and cash equivalents	1,667	1,452	1,414
Available-for-sale financial assets	60	62	93
Trade and other receivables	687	685	514
therein: Trade accounts receivables	622	591	449
Inventories	514	551	460
Income tax receivable	7	19	11
Other current financial assets	72	9	26
Other current assets	88	145	114
Assets classified as held for sale	495	24	112
Total current assets	- 3,590	- 2,947	- 2,744
Property, plant and equipment	838	808	928
Goodwill and other intangible assets	87	384	369
Investments accounted for using the equity method	35	39	27
Deferred tax assets	308	175	156
Other financial assets	119	135	124
	16	30	18
Other assets Umsatzerlöse einschließlich Wireless Solutions	-	-	-
Total assets	4,993	4,518	4,366
in Euro million	Sep 30, 10	Jun 30, 10 (1)	Sep 30, 09 (1)
Liabilities and equity
Current liabilities:
Short-term debt and current maturities of long-term debt	133	127	521
Trade and other payables	665	577	393
therein: Trade accounts payables	659	572	384
Current provisions	553	483	436
Income tax payable	111	119	102
Other current financial liabilities	16	54	50
Other current liabilities	153	247	147
Liabilities classified as held for sale	177 -	14 -	9 -
Total current liabilities	1,808	1,621	1,658
Long-term debt	263	279	329
Pension plans and similar commitments	146	103	94
Deferred tax liabilities	11	8	13
Long-term provisions	55	59	89
Other financial liabilities	6	4	5
Other liabilities	79 -	134 -	85 -
Total liabilities	2,368 -	2,208 -	2,273 -
Shareholders' equity:
Ordinary share capital	2,173	2,173	2,173
Additional paid-in capital	6,048	6,048	6,048
Accumulated deficit	(5,613)	(5,911)	(6,180)
Other reserves	17	-	(8)
Total equity attributable to shareholders of Infineon Technologies AG	2,625	2,310	2,033
Non-controlling interests	-	-	60
Total equity	2,625	2,310	2,093
Total liabilities and equity	4,993	4,518	4,366

(1) Prior period figures have been adjusted.

Infineon Consolidated Statements of Cash Flows (IFRS) (unaudited)

	3 months ended
	Sep 30, 10	Jun 30, 10	Sep 30, 09
in Euro million
Net income (loss)	390	126	11
Less: net loss (income) from discontinued operations	(197)	(23)	(1)
Adjustments to reconcile net income (loss) to cash provided by (used in) operating
Depreciation and amortization	85	80	98
Provision for (recovery of) doubtful accounts	-	1
Losses on sales of available-for-sale financial assets	-	-	2
Losses in connection with the deconsolidation of ALTIS	(14)	(4)	-
Losses (gains) on disposals of property, plant, and equipment, and other assets	-	(1)	1
Income from investments accounted for using the equity method	(1)	(4)	(3)
Dividends received from associated companies	4	3	-
Impairment charges	-	5	3
Share-based compensation	-	-	1
Deferred income taxes	(55)	(7)	(2)
Changes in operating assets and liabilities:
Trade and other receivables	6	(82)	(17)
Inventories Other current assets	(8) 34	(18) (7)	31 (4)
Trade and other payables	92	83	12
Provisions	114	(46)	(2)
Other current liabilities	(70)	174	28
Other assets and liabilities	25	(2)	5
Interest received	3	5	5
Interest paid	(1)	(25)	(4)
Income tax received (paid)	(8)	(8)	1
Net cash provided by (used in) operating activities from continuing operations	399	250	165
Net cash provided by (used in) operating activities from discontinued operations	(12)	(11)	24
Net cash provided by (used in) operating activities	387	239	189
Cash flows from investing activities:
Proceeds from sales of available-for-sale financial assets	2	375	6
Proceeds from sales of businesses and interests in subsidiaries	1	-	-
Purchases of intangible assets, and other assets	(8)	(9)	(5)
Purchases of property, plant and equipment	(155)	(71)	(21)
Proceeds from sales of property, plant and equipment, and other assets Net cash provided by (used in) investing activities from continuing operations	(1) (161)	3 298	1 (19)
Net cash provided by (used in) investing activities from discontinued operations	(8)	(35)	(18)
Net cash provided by (used in) investing activities	(169)	263	(37)
Cash flows from financing activities: Net change in short-term debt	-	(8)	-
Net change in related party financial receivables and payables	2	-	-
Proceeds from issuance of long-term debt	2	2	-
Principal repayments of long-term debt	(13)	(267)	(188)
Change in restricted cash	1	(1)	-
Proceeds from issuance of ordinary shares	-	-	680
Dividend payments to minority interests	-	-	3
Net cash provided by (used in) financing activities from continuing operations	(8)	(274)	495
Net cash provided by (used in) financing activities from discontinued operations	-	-	-
Net cash provided by (used in) financing activities	(8)	(274)	495
Net increase (decrease) in cash and cash equivalents	210	228	647
Effect of foreign exchange rate changes on cash and cash equivalents	5	(4)
Cash and cash equivalents at beginning of period	1,452	1,228	767
Cash and cash equivalents at end of period	1,667	1,452	1,414

Financial Calendar and IR Contacts

Financial Calendar IR Contacts

• Feb 17, 2011 Annual Shareholder Meeting
• Feb 01, 2011* Q1 FY11 Results
• May 03, 2011* Q2 FY11 Results
• Jul 28, 2011* Q3 FY11 Results
• Nov 17, 2011* Q4 FY11 Results

* Preliminary Date

Ulrich Pelzer

Corporate Vice President Corporate Development & Investor Relations

+49 89 234-26153

ulrich.pelzer@infineon.com

Joachim Binder

Senior Director, Investor Relations +49 89 234-25649 joachim.binder@infineon.com

Aleksandar Josic Manager, Investor Relations +49 89 234-83045

aleksandar.josic@infineon.com

Disclaimer

This presentation was prepared as of November 16, 2010 and is current only as of that date.

This presentation includes forward-looking statements and assumptions about the future of Infineon"s business and the industry in which we operate. These include statements and assumptions relating to general economic conditions, future developments in the world semiconductor market, our ability to manage our costs and to achieve our growth targets, the resolution of Qimonda"s insolvency proceedings and the liabilities we may face as a result of Qimonda"s insolvency, the successful closing of the sale of our WLS business to Intel, the benefits of research and development alliances and activities, our planned levels of future investment, the introduction of new technology at our facilities, our continuing ability to offer commercially viable products, and our expected or projected future results.

These forward-looking statements are subject to a number of uncertainties, such as broader economic developments, including the sustainability of recent improvements in the market environment; trends in demand and prices for semiconductors generally and for our products in particular, as well as for the end-products, such as automobiles and consumer electronics, that incorporate our products; the success of our development efforts, both alone and with partners; the success of our efforts to introduce new production processes at our facilities; the actions of competitors; the continued availability of adequate funds; any mergers, acquisitions or dispositions we may undertake; the outcome of antitrust investigations and litigation matters; and the resolution of Qimonda"s insolvency proceedings; as well as the other factors mentioned in this presentation and those described in the "Risk Factors" section of our most recent annual report on Form 20-F on file with the U.S. Securities and Exchange Commission.

As a result, Infineon"s actual results could differ materially from those contained in or suggested by these forward-looking statements. You are cautioned not to place undue reliance on these forwardlooking statements. Infineon does not undertake any obligation to publicly update or revise any forward-looking statements in light of developments which differ from those anticipated.