Infineon Technologies AG

Investor Presentation • Sep 28, 2005

Sanford C. Bernstein Strategic Decisions Conference

London, 2005-09-28

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September 28, 2005 ñ London

Peter J. Fischl Executive Vice President & CFO Infineon Technologies AG

reserved.

Technologies 2005. All rights

Copyright © Infineon

Disclaimer

Please note that while you are reviewing this information, this presentation was created as of the date listed, and reflected management views as of that date.

This presentation contains certain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Such risks and uncertainties include, but are not limited to the Risk Factors noted in the Company's Earnings Releases and the Company's filings with the Securities and Exchange Commission.

SCB Conference London, 2005-09-28 Slide -2-

Table of contents

Group Financials Group Financials

Automotive, Industrial & Multimarket Automotive, Industrial & Multimarket

Communication Communication

Memory Products Memory Products

Outlook Outlook

Results for Q3 vs. Q2 of FY05

[ E U R ] m	Q 2 F Y 0 5 Q 2 F Y 0 5	Q 3 F Y 0 5 Q 3 F Y 0 5	C h C h a n g e a n g e
N t l e s a e s G t h r o w	1 6 0 6 ,	1 6 0 6 ,	-- -
G i r o s s m a r g n	2 7 %	1 6 %
R & D e p e n s e s x i % f l n o s a e s	3 5 4 2 2 %	3 2 0 2 0 %	3 4 -
S G & A e p e n s e s x % f i l n o s a e s	1 6 4 % 1 0	1 5 7 % 1 0	7 -
E B I T	1 1 7 -	2 3 4 -	1 1 7 -
E B I T l. i i h t e x c r e o r g a n z a o n c a r g e i % f l n o s a e s	4 3 s - 3 % -	1 3 5 - 1 0 % -	1 1 0 -

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Maintaining a Solid Financial Cash Position

[ E U R ] m	Q 1 3 F Y 0 5 Q 1 3 0 F Y 5 - -	J 3 0 2 0 0 5 3 0 2 0 0 J 5 u n e u n e , ,
O t i p e r a n g h f l c a s o w	8 9 7	[ E U R ] m G N t T t l r o s s e o a h h d b t c a s c a s e 2 3 8 4 3 1 2 2 0 7 2 , ,
C a p e x	( 1 1 3 ) 5 ,	6 3 4
O h t e r ( 1 ) i t t n v e s m e n s	8 0	6 9 0
F h f l r e e c a s o w	( 2 6 6 )	2 0 0 5 4 8
		4 2 % i b l d F b 2 0 0 5 t 7 c o n v e r e u e e 0 0 % i b l d J 2 0 1 0 5 t c o n v e r e u e u n e O t h l t d b t e r o n g e r m e - S h t- t d b t o r e r m e

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Infineon's Commitment to Sustainable Profitability

Implemented actions leading to an even stronger focus on customers and profitable businesses Implemented actions leading to an even stronger focus on customers and profitable businesses

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Recent Management Changes

Mr. Kin Wah Loh ñ Now head of BG Memory Products Mr. Kin Wah Loh ñ Now head of BG Memory Products

• ! Member of Management Board of IFX AG since 2004
• ! President of Infineon Technologies Asia Pacific 1999-2004
• ! General Manager of various production sites of Siemens Semi
• !25 years of experience in semiconductor and manufacturing
• ! Engineering and Business degrees

Mr. Hermann Eul ñ Now head of BG Communication Mr. Hermann Eul ñ Now head of BG Communication

• ! New Deputy Member of Management Board
• ! Group VP and GM of Communication Business Group since 2004
• ! Professor for RF-Technology and Radio-Systems at University of Hanover/Germany
• !GM of various Business Units at IFX AG and Siemens AG
• ! 18 years of experience in R&D and management functions in communications and RF technologies
• ! PhD in Electrical Engineering

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Table of contents

Group Financials Group Financials

Automotive, Industrial & Multimarket Automotive, Industrial & Multimarket

Communication Communication

Memory Products Memory Products

Outlook Outlook

Slide -8-

Business Group Automotive, Industrial & Multimarket FQ3 Update

• !Slightly lower revenues due to higher than expected pricing pressure in chip card and security business
• !Sales to automotive & industrial industry increased slightly

Lower EBIT due to very strong pricing pressure at card ICs

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AIM ñ Recent Business Highlights (1)

!Automotive

Increased market share in car electronics from 8.7% in CY03 to 9.1% in CY04 (Source: Strategy Analytics, June 2005)

!Chip Card & Security ICs

IFX to supply secure chips, package and more for German e-Passport

!Asic Design & Solutions

Agreement with a leading HDD manufacturer to develop a product for fast-growing mobile applications market.

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AIM ñ Recent Business Highlights (2)

! Asic & Design Solutions

• ñ Supplier of key components for the Microsoft Xbox 360ô games console:
  • !a removable solid-state memory unit
  • ! wireless game-pad controller
  • ! an advanced security chip

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In Automotive, Infineon Leads the Long-range Route

Outstanding performance: #1 in Europe, #2 worldwide, #3 in U.S. Outstanding performance: #1 in Europe, #2 worldwide, #3 in U.S.

Market 2004: USD 15 bn 100% 200% 300% 400% 500% 600% 700% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Sales Growth 1994-2004 (CAGR) Infineon Automotive (20%) Automotive Semi Market (10%) Total Semis (8%) Strong development in Europe Improved in NAFTA & Japan Key applications ! Powertrain ! Safety management ! Body & convenience ! Infotainment IFX products ! Sensors ! Microcontrollers ! Power devices ! Wireless chipsets ! Discretes Others 33,8% STM 8,3% Freescale 12,0% 9,1% Bosch 5,9% Philips 6,0% Toshiba 6,1% NEC 6,2% Renesas 7,0% TI 3,4% FujitsuInfineon

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Infineon strengthened #1 Position in Power Semiconductors and improved to #4 in Industrial Applications

Industrial Semiconductor Market Industrial Semiconductor Market

		2 0 0 4
		R e e n e v u
1	R T h l e n e s a s e c n o o g y	1. 7 0 0
2	I t l n e	1. 4 9 7
3	S T M i l i t c r o e e c r o n c s	1. 3 7 1
4	I f i T h l i n n e o n e c n o o g e s	9 1 4
5	A l D i n a o g e v c e s	8 1 8
	0 0 4 R k a n	C N o m p a n y a m e

Power Semiconductor Market Power Semiconductor Market 2003 Rank 2004 Rank Company Name 2003 2004 Change 1 1 Infineon 8,1% 8,4% 0,3% 2 2 IR 8,0% 7,8% -0,2% 4 3 Fairchild 7,6% 7,7% 0,1% 3 4 STM 6,7% 7,2% 0,5% 5 5 Toshiba 7,4% 6,7% -0,7% 6 6 Vishay 5,8% 5,9% 0,1% 7 7 Mitsubishi 5,1% 5,4% 0,3% 9 8 Fuji Electric 4,5% 4,7% 0,2% 8 =8 Renesas 4,7% 4,7% 0,0%

IFX Industrial Products IFX Industrial Products

!Power semiconductors

• ñ AC/DC, DC/DC
• ñ High power semiconductors

!Microcontrollers

ñ 8/16/32 bit controllers

!Chipcard products

• ñ RFID
• ñ Crypto and memory controller

• !Sensors

• !Wireless control products

• !Standard and customer/ application-specific products

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10 ON

Sources: (top) iSuppli, August 2005; (bottom) IMS Research, August 2005

3,9% 4,1% 0,2%

New Automotive and Industrial Power Fab in Malaysia on Track for Ramp-up in 2006

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Chip Card and Security ICs Commanding Position Despite Difficult Environment

Addressing broad application base with ~40% market share Addressing broad application base with ~40% market share

Ongoing productivity measures in order to regain profitability Ongoing productivity measures in order to regain profitability

• ! Volume roll-out of 130nm process !Volume roll-out of 130nm process
• !Focus on new 32-bit emerging applications !Focus on new 32-bit emerging applications
• !Accelerated shift to MicroSlim technology !Accelerated shift to MicroSlim technology
• !Shift to Flip-Chip-on-Substrate (FCOS) packaging !Shift to Flip-Chip-on-Substrate (FCOS) packaging

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Table of contents

Group Financials Group Financials

Automotive, Industrial & Multimarket Automotive, Industrial & Multimarket

Communication Communication

Memory Products Memory Products

Outlook Outlook

Slide -16-

Business Group Communication FQ3 Update

!Revenues decreased slightly due to pricing pressure and further decline in demand from baseband customers

!Significant improvement of EBIT because of reduction of idle capacity costs, lower inventory charges, and lower R&D costs

SCB Conference London, 2005-09-28 Slide -17(1) Excl. acquisition related expenses and net charges resulting primarily from reorganization measures.

COM ñ Recent Business Highlights

• !MP-E GPRS/EDGE # one of smallest multimedia phone platform incl. all HW/SW components required for high-performance and advanced multimedia functionality; true 3-chip solution consists of multimedia baseband, power management unit and CMOS RF chip
• !ULC # Sampling world's first ultra low-cost reference design enabling mobile phones with production cost below US \$20.
• !Panasonic/PMC # uses MP1-G multimedia platform now for GSM/GPRS phones; 3-band functionality and camera support, polyphonic-ring tones, color displays and Java capability
• ! SMARTi 3G # world's first CMOS RF transceiver chip for UMTS applications; single-chip for 6-band solution makes UMTS phones usable worldwide; various design wins already
• !VINAX # industry's first fully standard-compliant VDSL2 end-to-end solution; established leading position with regard to Triple Play services

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CMOS ñ EDGE & 3G RF Transceivers Already Sampling, Providing Basis for Low-cost GSM/UMTS Single-chips

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Dates refer to first customer samples available

Infineonís Ultra Low-cost Solution Featuring RF/BB Singlechip Already Sampling to Customers

• \$ Single Chip RF/Baseband + High Level of HW Integration \$Single Chip RF/Baseband + High Level of HW Integration
• \$ Significant reduction of manufacturing and test time \$Significant reduction of manufacturing and test time
• \$ULC fastest growing GSM segment: 150m units in 2010*\$ULC fastest growing GSM segment: 150m units in 2010*

2G Entry Phone

E-Gold radio RF+BB chip E-Gold radio RF+BB chip

PCB size area PCB Components Phone BOM

ULC Phone

Copyright © Infineon Technologies 2005. All rights reserved.*Source: Strategy Analytics, February 2005

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Wireline ñ Strong Positioning in Access Growth Markets

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Sources: Dell'Oro 2005 (ADSL), IFX 2005; Gartner 07/2005 (T/E);

Critical Factors for VDSL2 ñ Infineon Has it All

Early availability "

• !VINAX: 1st fully standard compliant VDSL2 chip solution
• ! IFX: Sole company meeting all regional requirements

"Experience

• ! More than 4 million VDSL1 lines powered by Infineon chip solutions
• ! Fully ADSL backwards compatible

"Complete solution

! Extensive line-card and CPE solutions portfolio including: DSL, Communications Processors, VoIP, WLAN, switch/PHYs

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Table of contents

Group Financials Group Financials

Automotive, Industrial & Multimarket Automotive, Industrial & Multimarket

Communication Communication

Memory Products Memory Products

Outlook Outlook

Business Group Memory Products FQ3 Update

!Higher revenues and strong fully loaded cost reduction due to 45% bitshipment growth based on bit-production growth of ~15% and inventory decrease by ~2 weeks

!EBIT decline due to ASP decline (see above) and ramp-up costs for 300mm fab in Richmond/VA

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MP ñ Recent Business Highlights

• !Started 90nm production commercially with 512M DDR and DDR2 in volume
• !Increased share of specialty DRAMs e.g. for infrastructure and graphics applications
• ! Sampling customized 8GB DDR2-400 tall registered DIMMs
• ! First to provide DDR3 samples with full interface functionality
• ! IDF news: 1st company to offer complete in-house solution for next generation server modules (FB-DIMMs - Fully Buffered Dual-In-line Memory Modules - with an AMB chip plus heat spreader)

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300mm Fabs Up and Running, Now Converting to 90nm

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Shifting Memory Portfolio to Higher Margin Products

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Table of contents

Group Financials Group Financials

Automotive, Industrial & Multimarket Automotive, Industrial & Multimarket

Communication Communication

Memory Products Memory Products

Outlook Outlook

Infineon Business Group F4Q Outlook as of July 26th

• ! Expecting bit-production to increase by ~15% based on additional shipments from Inotera, foundry partners and ramp of Richmond 300.
  • !Bit-shipments are estimated to increase above market average.
  • ! Continue focusing on expansion of portfolio with higher margin products and increasing share of 512M and DDR2 products.

MPMP

• ! Expecting revenues to remain stable or increase slightly sequentially
• !Anticipating EBIT to remain stable or improve slightly compared to 3rd quarter EBIT (excluding impairment charges)
• ! Awaiting wireline business to be profitable by end-CY 2005

AIMAIM

• ! Estimating revenues and EBIT to remain stable sequentially
• !Awaiting benefits from seasonal strength in auto and industrial
• !Continued pricing pressure in chip card & security IC markets; continued focus on productivity improvements
• ! Planned phase-out of production in Munich and start-up costs for new site in Malaysia to negatively impact EBIT through end-CY06

Summary Infineon Group's F4Q Outlook as of July 26th

Revenues and EBIT: expect firm improvement sequentially R&D and SG&A: should remain roughly at a similar level

Capex: expected range for FY05 is EUR 1.3-1.4 bn Depreciation: expected FY05 range approx. EUR 1.3-1.4 bn FY06: Capex and Depreciation ranges not expected to increase

One-off charges: substantially lower, range of EUR 20-40m Pay back of EUR 450m credit facility from available funds Tax expense rate: around 30%

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SCB Conference

London, 2005-09-28

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Infineon

Technologies 2005. All rights

reserved.

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