Infineon Technologies AG

Investor Presentation • Sep 28, 2006

International Trade Press Briefing, Munich

Sept. 28, 2006 / Page 1

September 28, 2006

The Dynamics of the Broadband Market

Prof. Dr. Hermann Eul Member of the Management Board President Business Group Communication Solutions

Infineon Technologies 2005. All rights reserved.

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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.

Agenda

Communication Solutions Business Group Communication Solutions Business Group

Access Business Unit Access Business Unit

Broadband Market Dynamics Broadband Market Dynamics

Infineon Positioning Infineon Positioning

Press Briefing Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 3

Copyright © Infineon Technologies 2005. All rights reserved.

Agenda

Communication Solutions Business Group Communication Solutions Business Group

Infineon Communication Solutions Drives the Convergence of Communication Technologies

B d b d B d b d r o a a n r o a a n	R F S l i t S R F l t i o u o n s o u o n s	M b i l P h M b i l P h o e o n e o e o n e f P l t P l f t a o r m s a o r m s
A c c e s s "	R F E i n g n e " S T t u n e r y s e m s " C t i i t o n n e c " v y	F P h t e a u r e o n e " E P h t n r y o n e " M b i l S f t o e o w a r e "
C l t D S L C O / C P E " o m p e e x f t l i p o r o o O f f h i t i l l l " n e c p s e a m y o r a V I P l i i t o a p p c a o n s R f d i f " e e r e n c e e s g n s o r V D S L 2 A D S L 2 t + r o u e r, , V I P t d I P h o r o e r a n p o n e s u C f / h i t T E i p s e s o r c a r r e r, " l l i d d I S D N a n a o g n e c a r s a n	R F t i d B A W r a n s c e e r s a n " v f i l f 3 G d 2 G b i l t e r s o r a n m o e h d i l d t p o n e s a n w r e e s s a a d l m o u e s B l t t h E D R A G P S " u e o o - , d W L A N t i i t a n c o n n e c v y l i t s o u o n s D E C T / W D C T h i t " c p s e A l d d i i l t " n a o g a n g a t t i l t t e r r e s r a u n e r s y s e m s P l i f i d R F " o w e r a m p e r s a n S C f G G A I 3 d 2 b o r a n a s e i t t s a o n s	f f G R d i 3 e e r e n c e e s g n s o r " G d 2 b i l h a n m o e p o n e s / R F B b d i l h i a s e a n s n g e- c p " d l i d i b b d t a n m u m e a a s e a n f 3 G d 2 G o r a n P t l t k d r o o c o s a c a n " f l i t i k a p p c a o n r a m e o r w f f 3 G 2 G t d s o w a r e o r a n Cop yrig ht © Infin Te chn olog ies 200 5. A ll rig hts rved eon rese

Four Hot Topics in the Communication Market – Infineon Drives Them All

HSDPA enabled mobile phones to increase from 10 million in 2007 to more than 300 million by 2010*

Cellular ULC

ULC ("Ultra-Low-Cost") phones to represent 12% of worldwide mobile phone sales by 2010 compared to 1% in 2005*

Connectivity & Mobile TV

• Bluetooth penetration to increase from 19% in 2005 to 50% in 2008*
• WLAN, GPS, UWB and Mobile TV to move into high-end phones

DSL & VoIP

• Triple play services and network replacement drive DSL demand
• Strong growth in residential VoIP market

Communication Solutions - Recent Highlights

Major Highlights

3

3

3

Achieved profitability in Broadband driven by successful restructuring and revenue growth

Introduced new important products, for example:

• ADSL2+ CPE chip, new VoIP products
• 3G RF CMOS transceivers
• GSM/GPRS RF/Baseband single-chip, 7.2 Mb/s HSDPA solution
• ULC2 Platform, enabling <\$16 mobile phone BoM

Expanded our customer base in Broadband, RF Solutions and Mobile Phone Platforms based on strong product offering

Maintained no. 1 position in RF for mobile phones with ~200 3million RF chips sold in CY05

More than 500k VDSL2 lines already deployed with Deutsche 3Telekom

The Backbone for Seamless Communication

Infineon is in a Strong Position to Drive the Convergence of Voice, Video and Data Towards Seamless Communication

Broadband gateways

Potential Infineon content:

• 9ADSL2/2+ / VDSL2 transceiver
• 9Switch / router

• 9VoIP

• 9ISDN

• 9WLAN
• 9
• 9Software

• 93G / 2G Protocol stack
• 9 Application framework
• 9 IMS

9

9

9

• 9 WLAN
• 9 Bluetooth
• 9 UWB
• 9 A-GPS
• 9 DVB-H

Agenda

Communication Solutions Business Group Communication Solutions Business Group

Wireline Access

DSL and VoIP strategy

Creating Customer Value and Satisfaction

Broadest Product Portfolio in the Industry

Agenda

Communication Solutions Business Group Communication Solutions Business Group

Press Briefing Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 14

Sept. 28, 2006 / Page 15

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Infineon Technologies 2005. All rights reserved.

Voice over IP provides obvious End-User Benefit Fuels DSL growth rates

Press Briefing Prof. Dr. Hermann EulSept. 28, 2006 / Page 16

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Big competition:

Many players compete in different niches of the VoIP market

Danube Features the Industry's Highest Level of Integration Introduced in July 2006

W700 IAD DTAG

Press Briefing Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 19

Copyright © Infineon Technologies 2005. All rights reserved.

21st Century Network structure vision

NGN -

Press Briefing Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 20

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IP_TV is the way forward

• Clickhereto showvideo IP_TV is the (only?) way forward for big carriers to recover revenues after VoIP victory.
• ......\sbc_iptv_demo 1 .swf Capabilities of personalization may influence advertisement money streams.
• IP_TV requires major innovation steps.

VDSL2

Opening the Access Bottleneck !!!

VDSL2: Latest and greatest DSL Standard, approved by the ITU E2005

Press Briefing Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 22

Copyright © Infineon Technologies 2005. All rights reserved.

VDSL2 Complexity

"Direct" transmission, after a few m, all information is gone

DMT – Discrete Multi Tone

VINAX – First Fully Standard Compliant VDSL2 Product True End-2-End Solution, ADSL backwards compatible …

Many Companies claim to have a standard compliant product but many promises turned out to be Powerpoint only! Many Companies claim to have a standard compliant product but many promises turned out to be Powerpoint only!

Infineons VINAX family is the only true standard compliant VDSL2 solution in the market.

Infineon introduces world's first VDSL2 solution Infineon introduces world's first VDSL2 solution

Infineon powers Germany's VDSL2 network Infineon powers Germany's VDSL2 network

Infineon's VINAX™ Solution Powers Germany's VDSL-2 Rollout in 10 Cities: Deutsche Telekom Becomes the First Carrier Worldwide to Deploy VDSL2 with Speeds up to 50 Mbit/s

Munich, Germany – March 10, 2006 - Infineon Technologies, a leading provider of Communication ICs, today announced that T-Com, the Fixed Network business unit of Deutsche Telekom AG will base the rollout of its new hyper-speed VDSL2 network entirely on broadband access systems powered by Infineon's VINAX™ chip-set.

> 20 Design Ins in 6 month

T-Home Speed Project How it looks like

Major Investment is necessary to build the new high speed network

Fokus 36/2006

Korea is actively supporting a new high speed infrastructure

Press Briefing Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 28

Copyright © Infineon Technologies 2005. All rights reserved.

unterstützt hat.

erzählt gern

erzählt gern

A new Challenge: QoS for high speed home networking.

Home Networking Example – IP STB (Wired/Wireless)

A new concept: POF (Polymer Optical Fiber) for Home Networking - "Fiber to the TV"

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Support for 1 to 4 concurrent data streams

Infineon Technologies 2005. All rights reserved.

Press Briefing Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 31

100Mb/s sustained throughput @100m

Press Briefing

Sept. 28, 2006 / Page 32

Infineon Innovation : Fast Ethernet over POF

Copyright © Infineon Technologies 2005. All rights reserved.

Convergence – the next big move

• Seamless communication (wireless, broadband).
• Same services on all devices, at any time, at any location
• Mobile over WLAN over broadband
• IMS

Infineon Communication Solutions Drives the Convergence of Communication Technologies

Summary

• Massive changes are happening in the communication landscape.
• Infineon is driving the relevant innovation early and is partnering with the big trend setters.

2000 VoIP

NGN

IP_TV

Convergence

Telephone Network

1990

Prof. Dr. Hermann Eul Sept. 28, 2006 / Page 36

Press Briefing

Infineon Technologies 2005. All rights reserved.

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