Infineon Technologies AG — Investor Presentation 2005

Mar 4, 2005

Infineon On The Move

CSFB Conference ñ Miami/FL, USA − March 4, 2005

Peter J. Fischl Executive Vice President & CFOInfineon Technologies AG

CSFB Conference

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.

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Agenda

• !Review of market position in 2004
• !New organization and restructuring
• ! Communication
  • !Wireless: accelerating roadmap of innovations
  • !xDSL: market success based on a complete product offering
• ! Memory Products
  • !The race to 90nm on 300mm
• !Asia on the move ñ our move to Asia
• !The bottom line

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Infineon: Leading European Semi Company in 2004

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Simplified Organization Around Applications And Customers ñ Now* 3/22 BGs/Units (4/14 so far)

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* Effective Jan 1st , 2005

"

Restructuring of Operations Well Underway

• ! Terminate non-core activities which we could not fund through a full blown downturn
• ! Exit activities which we feel we cannot achieve an adequate return in in the mid to long run

Actions taken to date:

• "Sale of fiber optics transceiver business closed
• "Restructuring of other FO activities in Berlin and Munich started
• "Sale of venture capital activities closed
• "Sale or shut down of minor emerging business activities (ongoing)
• ìSmart Savingsî to cut down FY05 fixed costs by about EUR 200mn
• "Shut-down of 150mm front-end fab in Munich announced

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Sources: Market: Gartner, Jan 2005 / Market Share: Infineon estimate, Jan 2005

Transition of Complete RF Transceiver Portfolio to CMOS: Paving The Way For GSM/UMTS Single-chip Solutions

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Dates refer to first customer samples available

Successful Integration of RF CMOS Into Baseband: Sampling RF-Baseband SoC For GSM/GPRS

Infineonís single-chip demo-phone at 3GSM 2005 Infineonís single-chip demo-phone at 3GSM 2005

Integrated:

• #RF transceiver: SMARTi SD2
• #Baseband: E-GOLDlite

Advantages over 2-chip solution:

• #30% less board space
• #30% lower bill of material

Supported:

• #Up to GPRS class 12
• #1.3 megapixel camera
• #Dual color display
• #Polyphonic ringer
• #MP3 playback

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Introducing The World's 1st Linux-based Dual-mode UMTS/EDGE Smartphone Reference Design

OverviewOverview

• Linux-based dual processor UMTS/EDGE reference design

• Supporting high-end features required for a UMTS phone in 2006

• #Focusing on video/audio phone market

• Based on Infineon MP-U UMTS/EDGE modemplatform and dual-mode protocol stack as well as a 3rd party application processor

Main FeaturesMain Features

• UMTS/EDGE dual-mode Type II
• Linux-based operating system
• Video call and video streaming
• Video recording and playback
• High-performance multimedia applications
• Up to 4 megapixel camera
• 3D audio
• 3D gaming

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Wireless Solutions:

Significant Progress in All Four Core Competencies

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Wireline Communication:

Contíd to Gain Market Share With Transition to ADSL 2+

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Wireline Access:

Complete Product Portfolio For Broadband Market

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Memory Products:

Trench on Track For 90nm And 70nm Shrinks

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Memory Products: Continued Transition to 300mm Capacity

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Asia Moves From Commodity to Differentiated Logic Manufacturing: Case Study I ñ Infineon to Built Power Logic Fab in Malaysia

• ! Power semiconductors face a strong and stable long-term growth
• ! Increase of in-house capacity is required for AIM group due to volume growth and lack of vital external partnership model
• ! Power semiconductors cannot be shrunk as fast as memory or standard logic technologies. Therefore, output increase per fab is almost not possible
• ! Low cost site is favorable over mid-term due to much lower labor costs
• ! Kulim High-Tech Park in Malaysia is chosen as the new fabís location resulting out of a thorough site selection process

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Asia Moves From Low Cost Manufacturing to Design Power: Case Study II ñ Infineonís Development Center in Xiían, China

• !Pros and cons identified for alternative locations
• !Xiëan with firm basis in IC industrial and software experience
• ! The city has an extremely large number of highly qualified studentswhose talents could be leveraged for the IC industry
• !Both labor costs and fluctuation are relatively low
• ! Itís an amazing city with a rich variety of history and culture, which offers IFX staff an attractive work-life balance
• ! First product development activities started for memory chips
• ! Infineon plans to employ more than 1000 engineers by 2007

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Infineon Shifts Headcount Towards Asia Pacific Region

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Activities in APAC Major Driver of Infineon Growth Story

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Infineon On The Move

• " After a period of rapid growth a new organization was required to improve financial performance
• " With our restructuring we focus on core activities and eliminate losing operations
• " We achieved significant market share gains in the wireless market based on our leading RF transceiver portfolio
• "We are first with a running handset based on a single-chip radio
• "We stand in the forefront with an efficient UMTS mobile platform
• " We gained market share in ADSL based on our complete range of products
• " We are on the right track to improve productivity by the conversion to 90 nm and further leading transition to 300mm DRAM production
• " Asia on the move ñ Infineon on the move to Asia throughout the entire value-added chain and with a broad product portfolio

Q & Aës

Never stop thinkingÖ

Öand setting the benchmark with our E-GOLDradioô chip, a CMOS-based single-chip, which combines a quadband RF transceiver part with a baseband processor, and enables the world's most integrated GSM/ GPRS entry phone platform