Infineon Technologies AG

Earnings Release • May 4, 2017

Second Quarter FY 2017 Quarterly Update Infineon Technologies AG

Investor Relations

Table of Contents

Please regard the "Notes" and "Glossary" at the end of the presentation.

Disclaimer: This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.

These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.

Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forwardlooking statements.

Infineon at a glance

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Our strategy is targeted at value creation through sustainable organic growth

Focus		Technology leadership	System understanding
Auto	Power	RF and sensors	Security
System leader in automotive	#1; system and technology leader	Broad RF and sensor technology portfolio	Leader in security solutions

Average-cycle financial targets

~8% p.a. revenue growth

~17% Segment Result Margin ~13%

investment-to-sales (thereof capex*: ~11%)

Continued value creation for shareholders

Organic RoCE ~ 2x WACC

• › paying out at least a constant dividend even in periods of slower growth
• › continuous EPS increase

* Infineon reports under IFRS and has therefore to capitalize development assets which represents currently ~2% of sales.

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Infineon increased relative market share in power and outperformed chip card market

Source: Strategy Analytics, April 2017 Source: IHS Markit, October 2016 Source: IHS Markit, July 2016

Tight customer relationships are based on system know-how and app understanding

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Infineon's organic revenue development clearly outperformed total semi market

Revenue Infineon* [lhs]

* Based on Infineon's portfolio (excl. Other Operating Segments and Corporate & Eliminations) per end of FY16.

** If International Rectifier had been consolidated since 1 Oct 2014, Infineon would have recorded revenues of €6,059m in FY15. Source: Infineon; WSTS (World Semiconductor Trade Statistics), November 2016

Accelerated investments in FY17 to maximize margin contribution and customer satisfaction

Incremental investments in PPE of €100m help accommodate strong order entry in major growth areas, such as xEV, ADAS and power

Organic RoCE as the key value metric typically amounts to ~2x WACC

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Our promise to investors: Continued value creation through growth

Total cash return to shareholders

• › Increase of dividend from €0.20 to €0.22.
• › Payment of €248m on 21 Feb 2017.

Guidance for Q3 FY17 and FY17

	Outlook Q3 FY17* (compared to Q2 FY17)	Updated Outlook FY17* (compared to FY16)
Revenue	Increase of 3% +/- 2%-points	Increase of 8% to 11% (prev.: "Increase of 6% +/- 2%-points")
Segment Result Margin	At the mid-point of the revenue guidance: ~17.5%	At the mid-point of the guidance: ~17% revenue (prev.: "16%")
Investments in FY17		€1,050m About (prev.: "About €950m")
D&A in FY17		€830m*** About

• * Based on an assumed average exchange rate of \$1.10 for €1.00.
• ** Including approximately €35m for a new building at Infineon's headquarters in Neubiberg near Munich.
• *** Including D&A on tangible and intangible assets from purchase price allocation of International Rectifier.

Table of Contents

Q2 FY17 Group and Division Performance

* Individual small product groups were transferred to other segments with effect from 1 October 2016. The previous year's figures have been adjusted accordingly.

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2017 marks the market entry of Infineon with SiC MOSFETs and full SiC modules

• › Infineon owns industry's broadest power semiconductor portfolio with regard to products, packages and technology
• › Infineon offers "best-fit solutions" based on Si-based and SiC-based components
• › Infineon's SiC MOSFET is based on its innovative trench concept with highest reliability

Villach (Austria) › SiC manufacturing runs on standard manufacturing lines, i.e. no capacity constraints

Infineon SiC MOSFET already revenue potential of triple-digit €m in industrial applications

More and more applications will gradually reach their tipping point

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Hybrid SiC and full SiC power modules will show highest growth

Source: IHS Markit, "World Market for SiC and GaN Power Semi", Feb 2016; Infineon Source: Yole, "Power SiC 2016", Jul 2016

Table of Contents

Infineon benefits from industrial and auto, the by far fastest growing segments

CAGR 2016 – 2021 by Semiconductor Industry Segment

Source: IHS Markit, "Worldwide Semiconductor Shipment Forecast", April 2017

• * Market size in calendar year 2016
• ** Source: ABI Research, "Smart Cards and Secure ICs", February 2017; smart card and embedded secure microcontroller ICs

Infineon is system leader in automotive; making cars clean, safe and smart

2 with market share gains in power and sensors:

• › #1 in power semiconductors*
• › #2 in sensors*
• › #3 in microcontrollers* (#1 in powertrain**)

Most balanced portfolio with sensors, microcontrollers and power for system approach

Leader in electric drivetrain and CO² reduction - making cars clean

Leader in ADAS - making autonomous driving safe and reliable

Leading product portfolio of sensors and security ICs for individual convenience and connectivity - making cars smart

Focus on sustainable high-bill-of-material areas: powertrain, safety/ADAS/autonomous cars, body

* Source: Strategy Analytics, April 2016; ** own estimate.

Infineon is ideally positioned to benefit from ADAS/AD, xEV, connected cars and to gain further market share in Automotive

For full automotive story please refer to:

16 Mar 2017: Bernstein xEV and Energy Storage Conference by Hans Adlkofer, VP Automotive System Group www.infineon.com/bernstein

11 Oct 2016: ATV Division Call by Peter Schiefer, Division President Automotive www.infineon.com/atv-call

2 Aug 2016: ATV Presentation www.infineon.com/auto-slides

Infineon first partner in Volkswagen's "TRANSFORM 2025+" strategy program

Peter Schiefer, Division President Automotive at Infineon (left); Dr. Volkmar Tanneberger, Head of Electrical and Electronic Development at Volkswagen (Courtesy: Volkswagen AG)

"TRANSFORM 2025+"

• › Volkswagen secures its position in the field of future vehicle innovations such as automated and fully electric driving cars
• › The company is cooperating directly with semiconductor manufacturers to further shorten development and innovation cycles
• › Infineon is Volkswagen's first partner here
• › Cooperation between automotive OEMs and semiconductor manufacturers is becoming increasingly important for further innovation
• › Infineon is strengthening the bond to customers, getting involved even more deeply in the development processes
• › Infineon benefits from longer planning horizon and higher stickiness of the business

Infineon's position in the automotive semiconductor universe

* Divestiture of NXP's Standard Product business ("Nexperia") closed on 16 Feb 2017; hence included in the 2016 ranking. Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2017

m.s. trend

m.s. trend – 24 / 77 GHz radar – REAL3™ sensor

– ADAS/AD – Powertrain – xEV penetration

– EPS

m.s. trend

– Lighting

Key market trends significantly drive increasing semiconductor content per car

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

ADAS/AD 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

ADAS/AD and clean cars will generate half of the 8% trendline growth of ATV

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**

* Source: Strategy Analytics, IHS Markit, Infineon; ** e.g. radar includes µC

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

All types of xEV will significantly increase power semiconductor content per car

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Power semiconductor demand for different levels of electrification

Infineon has all elements and unparalleled package expertise for all xEV applications

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Infineon is well positioned globally to benefit disproportionately from xEV boom

In 2016, 8 out of 10 top selling xEVs were powered by Infineon

World's top 10 selling xEVs	type	Sold cars in 2016	Drivetrain powered by Infineon
Tesla Model S	EV	50,935	
Nissan Leaf	EV	49,818	
BYD Tang	PHEV	31,405	
Chevrolet Volt	EV	28,295	
Mitsubishi Outlander	PHEV	27,850	
BMW i3	EV	25,576	
Tesla Model X	EV	25,372	
BYD Qin	PHEV	21,868	
Renault Zoe	EV	21,626	
BYD e6	EV	20,609	

Source: EVvolumes.com, Infineon

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

~8% p.a. through-cycle growth

1 in the market*

for MOSFETs, discrete IGBTs, and total market

Broad product and technology portfolio

Addressing broadest range of applications

300 mm thin-wafer manufacturing for power semiconductors

System leader with digitalization of the control loop and functional integration * Source: IHS Markit, "Power Semiconductor Discretes & Modules Report – 2016", October 2016 Key areas of innovation

Leader in next-generation power semiconductor materials SiC and GaN

Infineon is ideally positioned to gain further market share and earn superior margins in power semiconductors

Ramp of 300 mm thin-wafer manufacturing technology on schedule

Advantages of 300 mm manufacturing of power semiconductors

• › When fully loaded, frontend manufacturing cost per unit will be 20 – 30% lower than on 200 mm
• › Capital intensity is 30% lower than for 200 mm

Current status of Dresden 300 mm fab

• › Headwind from 300 mm-related expenses (process development, product qualification and manufacturing infrastructure) decreasing in FY17
• › Cost cross over versus 200 mm expected by end of CY17 when reaching 25 – 30% area utilization

As system leader in power, Infineon has broadest application and technology reach

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Efficiency and digitalization are main market drivers for power applications

Tailored growth strategies maintain leadership position in both major segments of PMM

Infineon is the leader in security solutions for the connected world

2 in microcontroller-based smart card ICs*

1 in embedded digital security**

Complete portfolio of hardware, software, services and turn-key solutions

Leading in growth segments payment, government ID, connected car security, IoT, and Information and Communications Technology security

Infineon is ideally positioned to benefit from the growth trends in the security controller market

** Source: IHS Markit, December 2015

^* Source: IHS Markit, July 2016

CCS is enabling security for the connected world

Source: IHS Markit, Dec 2015, July 2016; * based on units; USD-ranking not provided

Infineon's long-term growth is based on sustainable growth drivers

~8% p.a. through-cycle growth

Table of Contents

SG&A includes noticeable Wolfspeed acquisition-related costs

* Target range for SG&A: "Low teens percentage of sales".

** Target range for R&D: "Low to mid teens percentage of sales".

All figures on a healthy level

* For definition please see page "Notes".

Investments increase to €1,050m from €950m due to higher full-year growth above trendline

• * For definition please see page "Notes".
• ** The figure includes approximately €35m for a new building at Infineon's headquarters. Excluding this amount the percentage rate is approximately 14.3%.

Net cash decreased due to dividend payment

• › Free Cash Flow from continuing operations was €82m.
• › Debt decreased by €26m due to repayment of €11m long-term debt and a change in FX-rates used for valuing US\$-based debt.
• › Dividend payment of €248m on 21 Feb 2017.

Infineon has a balanced maturity profile and a solid investment grade rating (BBB) from S&P

Note: Additional debt with maturities between 2017 and 2023 totaling €178m of which €41m repayments related to Campeon.

Infineon is a long-standing member of Europe's leading sustainability indices

Infineon's most recent achievements

• › Jan 2017: Infineon is listed in the Sustainability Yearbook for the 7th consecutive year and, according to RobecoSAM, among the top 15% most sustainable companies worldwide.
• › Sep 2016: Infineon is listed in the Dow Jones Sustainability Europe Index for the 7th consecutive year and in the World Index for the 2nd time – both achievements this year as the only European semiconductor company.

› Sep 2016: Infineon is listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon's performance in the governance, social and environmental areas (ESG).

› Infineon was added to the FTSE4Good Index Series in 2001 and has been confirmed as a member since then.

› Jul 2016: Most recent review.

› Dec 2016: In the Carbon Disclosure Project (CDP) climate change report, Infineon achieved a placing among the best companies in the Information Technology sector.

› Mar 2017: Infineon has been reconfirmed as a constituent of the Ethibel Sustainability Index (ESI) Excellence Europe.

Financial calendar

Date	Location	Event
11 May 2017	San Francisco	Dt. Bank AutoTech Conference
22 May 2017	Tarrytown, NY	Berenberg European Conference USA
23 – 24 May 2017	Boston	JPMorgan TMT Conference
24 May 2017	Milan	Equita European Conference
30 May 2017	Copenhagen	German Corporate Day by Danske Bank Markets
31 May – 01 Jun 2017	New York	Bernstein Strategic Decision Conference
01 Jun 2017	Zurich	Berenberg TMT Conference
06 – 07 Jun 2017	San Francisco	BoAML Global Technology Conference
13 – 14 Jun 2017	Paris	Exane European Conference
20 Jun 2017	London	JPMorgan CEO Conference
21 – 22 Jun 2017	Berlin	Dt. Bank German, Swiss & Austrian Conference
29 Jun 2017	London	PMM Presentation by Andreas Urschitz, Division President
01 Aug 2017*		Q3 FY17 Results
31 Aug 2017	Frankfurt	Commerzbank Sector Conference
6 – 7 Sep 2017	New York	Citi Global Technology Conference
18 Sep 2017	Munich	Berenberg Bank and Goldman Sachs German Corporate Conference
20 Sep 2017	Munich	Baader Investment Conference
10 Oct 2017	London	ATV Presentation by Peter Schiefer, Division President
14 Nov 2017*		Q4 FY17 and FY 2017 Results

* preliminary

/ Capital Employed

DOI (days of inventory; quarter-to-date) =

('Net Inventories' / 'Cost of goods sold') * 90

Working Capital =

• ('Total current assets'
• 'Cash and cash equivalents'
• 'Financial investment'
• 'Assets classified as held for sale')
• ('Total current liabilities'
• 'Short term debt and current maturities of long-term debt'
• 'Liabilities classified as held for sale')

DSO (days sales outstanding; quarter-to-date) = ('Trade receivables' / 'revenue') * 90

Please note:

All positions in ' ' refer to the respective accounting position and therefore should be applied with the positive or negative sign used in the relevant accounting table.

Investments =

Notes

'Purchase of property, plant and equipment'

• 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses

Capital Employed =

'Total assets'

• 'Cash and cash equivalents'
• 'Financial investments'
• 'Assets classified as held for sale'
• ('Total Current liabilities'
• 'Short-term debt and current maturities of long-term debt'
• 'Liabilities classified as held for sale')

RoCE =

NOPAT / Capital Employed =

('Income from continuing operations'

– 'financial income'

– 'financial expense')

DPO (days payables outstanding; quarter-to-date) =

('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) * 90

Glossary

ACC	adaptive cruise control	micro hybrid	vehicles using start-stop systems and limited recuperation
AD	automated driving
ADAS	advanced driver assistance system	mild hybrid	vehicles using start-stop systems, recuperation, DC DC conversion, e-motor
AEB	automatic emergency braking	OBC	onboard charger
BoM	bill of material	PHEV	plug-in hybrid electric vehicle
DPM	digital power management	SiC	silicon carbide
EPS	electric power steering
EV	electric vehicle		silicon germanium
		UPS	uninterruptible power supply
FCW	forward collision waring
HEV	mild and full hybrid electric vehicle	V2X	vehicle-to-everything communication
ICE	internal combustion engine	VSD	variable speed drive
MHA	major home appliances	xEV	all degrees of vehicle electrification (EV, HEV, PHEV)

Institutional Investor Relations contacts

Dr. Jürgen Rebel

Corporate Vice President +49 89 234-21626

Investor Relations juergen.rebel@infineon.com

Joachim Binder

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

Holger Schmidt

Senior Manager +49 89 234-22332 Investor Relations holger.schmidt@infineon.com

Tillmann Geneuss

Manager +49 89 234-83346 Investor Relations tillmann.geneuss@infineon.com