Infineon Technologies AG — Interim / Quarterly Report 2011

May 3, 2011

Second Quarter FY 2011Quarterly Update

Infineon Technologies AGInvestor Relations

Infineon Results and Outlook

Business Highlights

Executing on Continued Improvements in Financial Performance

	[ ] E U R m	F Y 2 0 1 0	Q 1 F Y 1 1	Q 2 F Y 1 1
	R e v e n u e	3 2 9 5 ,	9 2 2	9 9 4
	S l R t t e g m e n e s u	4 7 5	1 7 7	2 0 2
	S R M i a g n r	1 4 %	1 9 %	2 0 %
9 9 4 9 2 2	N I t e n c o m e	6 6 0	2 3 2	5 7 2
	I t t n e s m e n s v	3 2 5	1 3 1	1 6 4
	f 'd F C F t r o m c o n i t o p e r a o n s	3 5 7	4	1 3
2 0 2 1 7 7	G C h o s s a s r	2 1 7 7 ,	6 6 9 1 ,	2 6 9 1 ,
Q 1 1 1 Q 2 1 1 F Y F Y S l R R t t e v e n u e e g m e n e s u	h N C t e a s	1 3 3 1 ,	1 2 9 3 ,	2 3 3 5 ,

New All-Time-High in Segment Result Margin With 20%

Revenue and Segment Result[EUR m]781885 ^{942 922 994} +27%96 ^{138 170 177 202} Q2 FY10 Q3 Q4 Q1 FY11 Q2 Revenue Segment Result Segment Result margin12%16% 18% 19% 20%

All-time-high for ATV in Revenue and SR Margin; CCS Strong in Seasonally Weak Q

OpEx Continues to be Within Target Corridor

Considering Raising Investment Budget to Exploit Growth Potential

1) For definition please see slide 22 in appendix.

2) IFX is currently considering increasing the FY 2011 investment budget.

3) Guidance for D&A has been reduced on 03 May 2011 from previously EUR ~400m.

Cash Inflow from Closing of WLS Divest Drives Strong Increase in Net Cash

*Consists of Convertible Bond 2014 (nominal value EUR 160m; book value EUR 129m).

• Gross and net cash up due to receipt of proceeds of WLS sale from Intel.
• Repurchases of CB 2014 of EUR 27m cash (nominal EUR 8m) equivalent to 3.5m underlying shares.

Guidance for FY 2011 Increased Again

Outlook Q3 FY11(compared to Q2 FY11)

R t e e n e o v u
b f l t t t s a y a o u a
t t q u a r e r o n q u a r e r. - -

Revenue togrow by 20%.

previously: Revenue to grow bymid-teens percentage.

Total Segment Result Margin

Revenue

Segment Result Margin to stay about flatquarter-on-quarter.

Segment Result Margin to be about in line with H1 FY11.

previously: Margin to be a high teens percentage.

Infineon Results and Outlook

Business Highlights

Revenue Split by Division

6-months FY11 revenue split

Tight Customer Relationships are Based on System Knowhow and App Understanding

Infineon Holds Top Positions in All Target Markets

Source:Strategy Analytics, April 2011.

Source:IMS Research, July 2010.

Source:Frost & Sullivan, October 2010.

Automotive Segment (ATV)

Revenue and Segment Result

[EUR m]

• Revenue increased 11% quarter-on-quarter to an all-time-high; segment result margin up again to 19%.
• Production capacity of automotive-grade products grew significantly due to targeted investments. Incremental available capacity was absorbed immediately given high customer demand.

Design-wins Secure Leadership in Electronic Transmission Control ASICs

TLE8245X / TLE8246X

Key features

• Supports 4, 6, 8+ speed automatic transmission architectures.
• 3rd generation; best-in-class current accuracy over temperature.
• Integration of power devices and Integration devices shunts for lower system costs.
• Improves transmission efficiency by
• optimizing gear ratio;
• optimizing gear shift;
• reducing friction losses;
• reducing hydraulic losses.

Industrial & Multimarket Segment (IMM)

Revenue and Segment Result

[EUR m]

• Growth in RF and renewable energy businesses partly offset by normal negative seasonality in some consumer-related businesses, e.g. game console products.
• Agreements signed in smart metering arena (secure ASIC for measurement of gas and electricity flow).

Energy Efficiency is of Utmost Importance for Today's Data Centers of ~50MW-Class

Open Compute Project:

(http://opencompute.org)

Facebook's data center is one of the most efficient ones in the world and will boost energy efficiency by 38%1) while lowering cost by 24%2) .

1)Facebook lab testing conducted in February 2011, under production workloads.

2) Compared with other state-of-the-art data centers. Source: Report to Congress on Server and Data Center Energy Efficiency, U.S. Environmental Protection Agency ENERGY STAR Program, August 2, 2007.

CoolMOS™ C6/CP

Power supply

Facebook's first companyowned data center in Prineville, Oregon.

Chip Card & Security Segment (CCS)

Revenue and Segment Result

[EUR m]

• Revenue driven by payment products, growing shipments for the German identity card as well as other government ID projects.
• Segment result margin improved by ongoing ramp of 90nm products.
• First shipments for NFC solutions ramped in Q2.

Innovation Award of German Industry for Integrity Guard™ Security Technology

Award-winning Integrity Guard™ security technology

On 19 February 2011, the prestigious Innovation Award of German Industry for the best technologicalinnovation went to Infineon's "Integrity Guard" securitytechnology. This marked the third time Infineon hasreceived this accolade.

The 16 -bit SLE 78 family is based on "Integrity Guard"security technology. The new German National e-ID Card is the first major project for the SLE 78 family.

Solid Flash™ Replaces ROM-based Memory Solutions

Customers' benefit with Solid Flash™

• Fast and easy prototyping. Sampling and code change through the immediate availability of hardware samples.
• Lead times for chip production based on forecast are reduced by more than 50% compared to mask ROM.
• Products can be configured by the system integrators on demand allowing much faster reaction times and eliminating very complex inventory management of the different mask ROM versions.

Target applications

• payment
• transport
• eGovernment ID
• high-end SIM / UICC
• M2M

Officially acknowledged by EMVCo, Common Criteria EAL4+ (high) and EAL 5+ (high) certifications.

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'

eserved. – '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 03 May 2011

Infineon Consolidated Statements of Operations (IFRS) (unaudited)

	3 m hs d e d t on en			6 m hs de d t o n en
in E mi llio t fo r th har e d ata uro n; e xce p e p er s	M a r 3 1, 11	D e c 3 1, 10	M a r 3 1, 10	M a r 3 1, 11	M a r 3 1, 10
Re ve nu e	9 9 4	9 2 2	7 8 1	1, 9 1 6	1, 4 6 8
Co of ds ld st g oo so	( ) 5 7 3	( ) 5 3 8	( ) 4 9 6	( ) 1, 1 1 1	( ) 9 4 2
Gr fit o ss p ro	4 2 1	3 8 4	2 8 5	8 0 5	5 2 6
Re h a nd de lop nt se arc ve me exp en se s	( ) 1 1 2	( ) 1 0 8	( ) 9 6	( ) 2 2 0	( ) 1 8 5
Se llin l an d a dm inis tiv tra g, g en era e e xpe ns es	( ) 1 1 3	( ) 1 0 3	( ) 9 5	( ) 2 1 6	( ) 1 8 3
Ot he ing inc rat r o pe om e	9	2	3	1 1	9
Ot he ing rat r o pe ex pe ns e	( ) 1 8	( ) 6	4	( ) 2 4	( ) 9 2
ing in Op at er co me	1 8 7	1 6 9	1 0 1	5 3 6	5 7
Fin cia l in an co me	8	6	8	1 4	1 9
Fin cia l ex an pe ns e	( ) 1 1	( ) 1 8	( ) 3 0	( ) 2 9	( ) 6 8
Inc e f inv ed fo ing th ity tho d tm ts unt om rom es en ac co r us e e qu me	2	-	2	2	3
Inc fr inu ing io be fo inc nt rat o me o m co o pe ns re o me ta	1 8 6	1 5 7	8 1	3 4 3	2 9
xe s Inc e t om ax exp en se	( 1 3 )	( 8 )	( 6 )	( 2 1 )	( 1 3 )
Inc fr nt inu ing rat io o me o m co o pe ns	1 7 3	1 4 9	7 5	3 2 2	1 6
Inc e f dis nti ed tio f in t o ta om rom co nu op era ns , ne co me xes	3 9 9	8 3	4	4 8 2	1 2 8
N et in co me	5 7 2	2 3 2	7 9	8 0 4	1 4 4
At trib ble uta to :
No llin int tro sts n-c on g ere	-	-	-	-	1
Sh ho lde of Inf ine Te ch log ies AG are rs on no	5 7 2	2 3 2	7 9	8 0 4	1 4 3
of Inf Ba sic rni sh at trib uta ble to sh ho lde ine ea ng s p er are are rs on Te ch log ies AG ( in E ): no uro
We ig hte d a ha din ( in m illio n) – ba sic tst ve rag e s res ou an g	1, 0 8 7	1, 0 8 7	1, 0 8 7	1, 0 8 7	1, 0 8 7
Ba sic rni sh fro nti ing tio ea ng s p er are m co nu op era ns	0. 1 6	0. 1 4	0. 0 7	0. 3 0	0. 0 1
Ba sic rni sh fro m d isc tin d o ion rat ea ng s p er are on ue pe s	0. 3 7	0. 0 7	-	0. 4 4	0. 1 2
ic ing B sh as ea rn s p er ar e	0. 5 3	0. 2 1	0. 0 7	0. 7 4	0. 1 3
Dil d e ing sh trib ble sh ho lde f ute at uta to arn s p er are are rs o AG ( ): Inf ine Te ch log ies in E on no uro
We ig hte d a ha din di lut ed tst ve rag e s res ou an g –	1, 1 6 0	1, 1 6 7	1, 1 7 1	1, 1 6 3	1, 0 8 7
Dil d e ing sh fro nti ing tio ute arn s p er are m co nu op era ns	0. 1 5	0. 1 3	0. 0 7	0. 2 9	0. 0 1
Dil d e ing sh fro dis nti ed tio ute arn s p er are m co nu op era ns	0. 3 5	0. 0 7	-	0. 4 1	0. 1 2
D ilu d e nin sh te ar g s p er ar e	5 0. 0	0. 2 0	0. 0 7	0. 7 0	0. 1 3

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

in E mill ion uro	M a r 3 1, 1 1	D e c 3 1, 1 0	Se 30 , 10 p
A s ts: se
Cu t as set rren s:
Ca sh and sh iva lent ca equ s	1, 162	1, 61 0	1, 66 7
Fin ial i stm ent anc nve s	1, 52 9	59	60
Tra de and oth iva ble er r ece s	82 9	68 5	68 7
the rin: Tra de ts r iva ble acc oun ece s	59 3	63 0	62 2
Inve ries nto	61 5	57 3	51 4
Inco tax eiv abl me rec e	13	12	7
Oth nt f ina nci al a ts er c urre sse	9	22	72
Oth nt a ts er c urre sse	97	109	88
As lass ifie d a s h eld for le set s c sa	-	56 7	49 5
T o tal nt ts cu rre as se	4, 25 4	3, 63 7	3, 59 0
Pro lant d e ipm ty, p ent per an qu	96 2	89 0	83 8
Go odw ill a nd oth er i ible nta set ng as s	97	91	87
Inv est nts nte d fo ing the uity tho d me ac cou r us eq me	37	35	35
Def d ta set erre x as s	22 3	30 8	30 8
Oth er f ina nci al a ts sse	126	120	119
Oth ts er a sse	25	23	16
T o tal ts as se	5, 72 4	5, 10 4	4, 99 3
Lia bil itie nd uit s a eq y:
Cu t lia bilit ies rren :
Sho de bt a nd ritie f lo de bt rt-t t m atu term erm cur ren s o ng-	130	129	133
Tra de and oth ble er p aya s	9 77	71 6	66 5
the rin: Tra de ble ts p acc oun aya s	68 5	70 6	65 9
Cu t pr ovi sio rren ns	58 2	48 9	3 55
Inco ble tax me pa ya	142	10 1	11 1
Oth nt f ina nci al li abi litie er c urre s	11	12	16
Oth nt l iab ilitie er c urre s	32 3	154	153
Lia bilit ies cla ssi fied he ld f ale as or s	-	152	177
T o tal lia bil itie nt cu rre s	1, 96 7	1, 75 3	1, 80 8
Lon deb g-te t rm	22 6	24 7	26 3
Pe nsi lans d s imi lar mit nts on p an com me	147	154	146
Def d ta x lia bilit ies erre	11	10	11
Lon g-te vis ion rm pro s	42	54	55
Oth er f ina nci al li abi litie s	5	5	6
Oth er l iab ilitie s	77	73	79
lia bil itie T o tal s	2, 47 5	2, 29 6	2, 36 8
Sha reh old ' eq uity ers :
Ord ina har ital ry s e c ap	2, 173	2, 173	2, 173
Ad diti l pa id-i ital ona n c ap	5, 88 0	6, 00 4	6, 04 8
Ac ulat ed def icit cum	( ) 4, 80 9	( 1) 5, 38	( ) 5, 61 3
Oth er r ese rve s	5	12	17
T o tal uit eq y	3, 24 9	2, 80 8	2, 62 5
T o tal lia bil itie nd uit s a eq y	5, 72 4	5, 10 4	4, 99 3

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

	3 m ont h		d ed s en
in Eu illion ro m	M ar 3 1, 11	D ec 3 1, 10	M a r 3 1 , 10
Net inc om e	572	232	79
Les et in e fr disc inue d op tion f in ont et o e ta s: n com om era s, n com xes
Adj ustm ents to ile n et in e to net sh vide d by ting tivit ies: rec onc com ca pro op era ac	(39 9)	(83 )	(4)
Dep iatio d a tiza tion rec n an mor	89	83	81
Prov isio n fo r (re of) do ubtf ul a unts cov ery cco	3	-	1
of A LTIS Los in c ect ion w it h th e de soli dat ion ses onn con	-	-	(8)
Los (ga ins) disp ls o f pr plan d eq uipm rty, t an ent ses on osa ope	-	-	(2)
from d fo Inco inv est ts a unte ing the ity m etho d me men cco r us equ	(2)	-	(2)
Imp airm cha ent rge s	(3)	(2)	1
Sha re-b d co tion ase mpe nsa	1	-	-
Def d in e ta erre com xes	(1)	1	(5)
Cha s in ting d lia biliti sets nge op era as an es:
Tra de a nd o the ceiv able r re s	(72 )	(9)	(60 )
Inv ries ento	13	(50 )	(14 )
Oth nt a ts er c urre sse	10	(20 )	(15 )
Tra de a nd o the yab les r pa	13	44	80
Pro visi ons	20	(52 )	32
Oth nt li abil ities er c urre	(31 )	33	49
Oth nd l iabi lities ts a er a sse	(20 )	(9)	11
Inte ceiv ed t re res	6	4	4
Inte id t pa res	-	(10 )	(8)
Inc id tax ome pa	(22 )	(28 )	(13 )
Net sh vid ed by rati ivit ies fro inu ing tion act ont ca pro ope ng m c op era s	177	134	207
Net sh vid ed by (us ed in) rati act ivit ies fro ca pro ope ng m	84	76	(34 )
dis tinu ed rati con ope ons
Net sh vid ed by rati ivit ies act ca pro ope ng	261	210	173
Cas h flo fro m in ting act ivitie w s ves s:
Pur cha of fina ncia l inv est ts ses men	(1,4 68)	-	(37 5)
ds f of f Pro les inan cial inv est ts cee rom sa men	-	-	25
Pur cha of inta ngib le a ts a nd o the sets ses sse r as	(9)	(9)	(10 )
of Pur cha ty, plan t an d eq uipm ent ses pro per	(15 5)	(12 2)	(36 )
Pro ds f les of p erty , pla nt a nd e quip t an d ot her sets cee rom sa rop men as	-	1	24
Net sh d in inv est ing act ivit ies fro ont inu ing tion ca use m c op era s	(1,6 32)	(13 0)	(37 2)
Net sh vid ed by (us ed in) inv ing ivit ies fro m d isc inu ed est act ont ca pro rati ope ons	1,07 7	(55 )	(17 )
Net sh d in inv est ing act ivit ies ca use	(55 5)	(18 5)	(38 9)
Cas h flo fro m fi cing ivitie act w s nan s:
Net cha in s hor rm d ebt t-te nge	-	-	8
Net cha in r elat ed ty f inan cial eiva bles d pa yab les nge par rec an	-	-	1
Pro ds f iss f lo de bt term cee rom uan ce o ng-	-	27	-
Rep of long m d ebt ents -ter aym	(16 )	(27 )	(13 )
Rep has e of rtibl ubo rdin ated not urc co nve e s es	(27 )	(80 )	(14 2)
Cha in r ricte d ca sh est nge	-	-	1
Divi den d pa nts yme	(10 9)	-	-
Net sh d in fin ing act ivit ies fro ont inu ing tion ca use anc m c op era s	(15 2)	(80 )	(14 5)
Net sh vid ed by (us ed in) fina nci ivit ies fro m d isc inu ed act ont ca pro ng	1	(4)
rati ope ons			-
d in fin ing ivit ies Net sh act ca use anc	(15 1)	(84 )	(14 5)
Net incr e (d e) i sh a nd c ash uiva lent eas ecr eas n ca eq s	(44 5)	(59 )	(36 1)
Effe ct o f fo reig cha rat han h an d ca sh e quiv alen ts n ex nge e c ges on cas	(3)	2	-
Cas h an d ca sh e quiv alen t be ginn ing of p erio d ts a	1,61 0	1,66 7	1,58 9
Cas h a nd h e qui val d o f pe riod ent t en cas s a	1,16 2	1,6 10	1,2 28

Financial Calendar

• 11 May 2011, London Credit Suisse European Technology Conference
• 17-18 May 2011, Boston JPMorgan TMT Conference
• 07 Jun 2011*, Campeon, Neubiberg IFX Day
• 28 Jul 2011* Q3 FY11 Results
• 08 Sep 2011, London Deutsche Bank European TMT Conference
• 13-15 Sep 2011, Las Vegas Deutsche Bank Technology Conference
• 28 Sep 2011, Munich UniCredit German Investment Conference
• 16 Nov 2011* Q4 FY11 Results
• 17-18 Nov 2011, Barcelona Morgan Stanley TMT Conference

Investor Relations Contacts

Ulrich Pelzer

Corporate Vice President, Corporate Development & Investor Relations- +49 89 234-26153 ulrich.pelzer@infineon.com

Joachim BinderSenior Director, Investor Relations- +49 89 234-25649

joachim.binder@infineon.com

Aleksandar JosicManager, Investor Relations-+49 89 234-83045

aleksandar.josic@infineon.com

Holger SchmidtManager, Investor Relations-+49 89 234-22332

holger.schmidt@infineon.com

Disclaimer

This presentation was prepared as of 03 May 2011 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 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 disclosed at other occasions.

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.