Infineon Technologies AG

Investor Presentation • May 23, 2006

Lehman Brothers Wireless, Wireline and Media Conference

New York, May 23, 2006

Lehman Brothers W3 New York, May 23, 2006

Slide 1

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

Infineon Technologies 2006. All rights reserved.

Copyright ©

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.

Infineon Communication Solutions: A Diversified and Leading Player in the Communication Market

Infineon Communication Solutions FY05 revenue: EUR 1.4bn

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S G B d b d d R F 2 0 0 5. t o r c e r o a a n a n a r n e r, u : :		Cop yrig ht © Infin Te chn olog ies 6. A ll rig hts rved 200 eon rese

Lehman Brothers W3 New York, May 23, 2006 Slide 3

Mobile Phone Platforms: Infineon 2006

What Has Changed During Last Year

Major changes

Achieved profitability in Broadband driven by successful restructuring and revenue growth

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

Introduced new important products, for example:

• ! VDSL2 chipset, new VoIP products
• ! 3G RF CMOS transceivers
• ! GSM/GPRS RF/Baseband single-chip, 7.2 Mb/s HSDPA solution
• Expanded our customer base in Broadband, RF Solutions and Mobile Phone Platforms based on strong product offering

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Lost market share in baseband in CY05

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

!

HSDPA

HSDPA enabled mobile

300 million by 2010*

phones to increase from 10

million in 2007 to more than

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 highend phones

DSL & VoIP

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

Infineon Communication Solutions Segments

Broadband

RF Solutions

Mobile Phone Platforms

Lehman Brothers W3 New York, May 23, 2006 Slide 6

Copyright © Infineon Technologies 2006. All rights reserved.

Growth Driver: Broadband Access

DSL market development

Triple play services and network replacement drive DSL demand

For example:

• ! Deutsche Telekom intends to provide Germany's 50 largest cities with up to 50Mbit/s broadband lines by 2007
• ! By mid-2006, already 2.9 million households can use the new technology

Infineon's position

VDSL2 leadership

• ! We offer the first fully standard compliant VDSL2 chip solution
• ! Deutsche Telekom will base the rollout of its VDSL2 network entirely on Infineon's VDSL2 chip-set
• ! More than 500k VDSL2 lines shipped in Q1 CY06

New customers in ADSL2/2+

! Design-wins at several new major OEMs beginning to ramp-up in CY06

Copyright © Infineon Technologies 2006. All rights reserved.

Infineon Powers Germany's New VDSL2 Network

May 2005

Infineon introduces world's first VDSL2 solution

March 2006

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

10 Mar 2006

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.

Growth Driver: Broadband CPE

Market development

• ! DSL CPE market to grow from 57 million units in 2005 to 85 million units by 2009
• ! Major growth drivers are VDSL2 and ADSL2/2+ broadband gateways

DSL CPE [mn

units]

Infineon's position

• ! Infineon broadband gateway content:
  • –ADSL2/2+ / VDSL2 transceiver
  • –Switch / router
  • –VoIP
  • –ISDN
  • –Software
• ! Achieved several system solution design-wins for xDSL gateways beginning to ramp-up in CY06
• ! Next step: Integration of xDSL, router and VoIP into a single-chip

Copyright © Infineon Technologies 2006. All rights reserved.

Lehman Brothers W3 New York, May 23, 2006 Slide 9

Broadband

Slide 10 # Growth Driver: VoIP

VoIP market development

• ! New residential VoIP subscribers to increase from 10 million in 2005 to 64 million in 2009
• ! This generates a VoIP enabled market for semiconductor products
• !xDSL residential voice gateways remain the main VoIP enabling devices 80

Worldwide net new residential VoIP subscribers [mn]

Infineon's position

Successfully addressing all major VoIP applications:

• ! VoIP CO line cards: Design wins at several major OEMs
• ! VoIP CPE: Design wins at major OEMs and ODMs beginning to ramp-up in CY06
• ! IP Phones: Design win with major OEM for next generation IP Phones

Copyright © Infineon Technologies 2006. All rights reserved.

Infineon Communication Solutions Segments

Broadband

RF Solutions

Mobile Phone Platforms

Lehman Brothers W3 New York, May 23, 2006 Slide 11

Copyright © Infineon Technologies 2006. All rights reserved.

Growth Driver: RF Transceiver

Market development

• ! 3G phones to grow from 44 million in 2005 to almost 350 million in 2009
• ! EDGE phones to grow from 77 million in 2005 to more than 500 million in 2009

Worldwide mobile phone shipments by air interface [mn]

Infineon's position

• ! No. 1 in RF with approximately 200 million RF chips sold in CY05
• ! Leading the transition to RF CMOS

Infineon introduced:

• !World's first CMOS EDGE singlechip transceiver
• ! World's first CMOS single-chip 6-band WCDMA transceiver
• ! World's first CMOS one-chip 6- band WCDMA and 4-band EDGE transceiver

Copyright © Infineon Technologies 2006. All rights reserved.

Samsung selects Infineon's EDGE CMOS transceiver

Samsung Selects RF Transceiver from Infineon for EDGE Mobile Phones; Chip Reduces Number of Components and Board Space

20 Apr 2006

Munich, Germany – April 20, 2006 – Infineon Technologies AG (FSE/NYSE: IFX) today announced that Samsung, the world's third-largest mobile phone supplier, has selected the single-chip SMARTi PM CMOS radio frequency (RF) transceiver for new EDGE mobile phones that will be coming to the market in the second half of 2006. The SMARTi PM chip reduces component count in a complete GPRS/EDGE radio by 30 percent, requiring 50 percent less board space for the RF portion of the phone than competing solutions.

Growth Driver: Connectivity

Growth driver

Increasing demand for connectivity in mobile phones:

Infineon's position

Bluetooth

• ! Customers: BenQ, Panasonic
• ! Bluetooth 2.0 + EDR solution sampling since early 2005
• ! New design wins at BenQ and OEM to ramp up in 2H CY06

A-GPS

• ! World's first RF / BB single-chip solution sampling since early 2005
• ! Design-win at a mobile phone platform

WLAN

• ! 802.11 a/g single-chip for mobile phones available in 2006
• !VoIP functionality integrated
• ! UMA support

UWB

! Single-chip in development

Growth Driver: Digital Terrestrial TV and Mobile TV

Digital terrestrial TV

Growth Drivers:

• !Introduction of digital terrestrial TV in many regions
• !Analog terrestrial TV to be switched off by 2015

Infineon's Position:

• !Leading share worldwide in tuners for digital terrestrial TV
• !Infineon tuners are fully compliant to DVB-T, DVB-C, ISDB-T, ATSC

Mobile TV

Growth Drivers:

• !World's first roll-out took place in South Korea in 2005
• !Field trials in many regions all over the world

Infineon's Position:

• ! Volume shipments of portable TV tuners since end 2005
• ! DVB-H frontend solution demo at 3GSM '06

Growth Driver: Digital Cordless

Growth driver

• ! Main growth driven by ultra lowcost segment
• ! Replacement of corded phones and analog standards
• ! 2.4 GHz in the Chinese market
• ! DECT 6.0 in North America
• ! DECT Next Generation in Europe
• ! Strong interest in combined DECT and VoIP solution

Infineon's position

• ! More than 180 million digital cordless modems shipped so far
• ! Infineon plans to regain market leadership with digital cordless single-chip strategy
• ! Single-chip planned to ramp-up in 2H CY07

Digital Cordless single-chip advantage:

• !Up to 50% reduction in component count for a DECT/WDCT system
• ! Up to 40% lower production costs

Infineon Communication Solutions Segments

Broadband

RF Solutions

Mobile Phone Platforms

Lehman Brothers W3 New York, May 23, 2006 Slide 17

Copyright © Infineon Technologies 2006. All rights reserved.

Infineon Provides All Key Elements For 7.2 Mb/s HSDPA

HSDPA multimedia baseband S-GOLD 3H

• ! One-chip HSDPA / WCDMA / EDGE solution
• ! 7.2 Mbit/s baseband
• !Video telephony and streaming without companion
• ! Status: Sampling

HSDPA RF CMOS transceiver SMARTi 3GE

• ! World's first one-chip six-band WCDMA and quad-band EDGE transceiver
• ! Offers data rates up to 7.2Mbit/s
• ! Status: Sampling

HSDPA protocol stack

• !3GPP WCDMA FDD multimode type II protocol stack
• !Full support of 3GPP release 5 HSDPA
• !Supports GSM, GPRS and EDGE up to Class 12
• ! Status: Delivery to first customer in Q1 CY06

Power management and connectivity solutions

Lehman Brothers W3 New York, May 23, 2006 Slide 18

Copyright © Infineon Technologies 2006. All rights reserved.

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Leadership in GSM/GPRS Single-Chip Solutions

Copyright ©

Infineon Technologies 2006. All rights reserved.

Expanding Mobile Phone Platform Customer Base

		i i D e s g n n s w
C t s o m e r u	f P l t a o r m	R a m p u p
O E M	G S C M U L	! I n d i t p r o u c o n
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O D M	G S M U L C	H C Y 2 0 6
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O E M	E D G E M l i d i t m e a u	C 1 H Y 0 7
P i a n a s o n c	G 3 M l i d i t m e a u	C 2 H Y 0 6
	Cop

Significant Progress in 65nm

Achieved call on air with 65nm mobile phone IC

Advanced 65nm mobile phone chip works first time - 30 million transistors integrated on one cell phone key

12 May 2006

Munich, May 12, 2006 – Infineon Technologies AG announced today that the first cell phone chips equipped with its advanced 65-nm CMOS process technology are now available. The components functioned perfectly right from the start, as complicated testing in Duisburg, Munich and Bangalore, India has now shown. The dial-in to different GSM mobile communications networks and the resulting connections worked without a hitch.

• !Leveraging results of 65nm / 45nm ICIS alliance
• ! 65nm technology is expected to further strengthen our leading position in baseband and RF CMOS single-chip integration

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

For example …

Potential Infineon content:Broadband gateways

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

• "VoIP

• "ISDN

• "WLAN
• " DECT/WDCT
• " Software

Mobile phones

Summary

Broadband

• ! Top 3 position in overall wireline access IC market

• !Complete broadband and VoIP product offering

• ! Design wins with major customers in Broadband Access, Broadband CPE and VoIP

• !Expanding customer base due to strong product offering

RF Solutions

• ! Market leader in RF trans-ceiver and digital terr. tuner
• ! Top 3 position in several other RF applications
• !Broad RF CMOS portfolio in cellular, connectivity and DECT/WDCT

! Expanding customer base due to RF CMOS leadership

Mobile Phone Platforms

!Major player in baseband

• ! Complete system solution offering from 2G to 3.5G
• !Providing all key hardware and software elements
• ! Leadership in RF / baseband single-chip
• ! Expanding customer base due to strong system solution offering

Lehman Brothers W3

New York, May 23, 2006

Slide 24

Never stop thinking.

Copyright ©

Infineon Technologies 2006. All rights reserved.