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Infineon Technologies AG

Investor Presentation • Apr 16, 2007

222_ip_2007-04-16_c0db18fb-03be-4e41-923f-b7fcf6554987.pdf

Investor Presentation

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Infineon RoadshowApril 2007

Peter J. Fischl Executive Vice President and CFO

Ruediger Andreas Guenther CFO Designate

Disclaimer

This presentation was prepared as of March 23, 2007 and is current only as of that date.

This presentation includes forward-looking statements about the future of Infineon's business and the industry in which it operates. These include statements relating to future developments in the world semiconductor market, including the market for memory products, Infineon's future growth, the benefits of research and development alliances and activities, Infineon's planned levels of future investment in the expansion and modernization of its production capacity, the introduction of new technology at its facilities, the continuing transitioning of its production processes to smaller structure sizes, cost savings related to such transitioning and other initiatives, Infineon's successful development of technology based on industry standards, Infineon's ability to offer commercially viable products based on its technology, Infineon's ability to achieve its cost savings and growth targets, and the impact of the carve-out of Qimonda, the group's memory products business, its initial public offering, and any further sales of Qimonda shares or other corporate financing measures in that regard.

These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for Infineon's products in particular, the success of Infineon's development efforts, both alone and with partners, the success of Infineon's efforts to introduce new production processes, the actions of competitors, the availability of funds for planned expansion efforts, and the outcome of antitrust investigations and litigation matters, as well as the other factors mentioned in this presentation and those described in the "Risk Factors" section of the annual report of Infineon on Form 20-F filed with the U.S. Securities and Exchange Commission on November 30, 2006 or contained in the company's quarterly reports. As a result, Infineon's actual results could differ materially from those contained in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements.

Infineon does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

Group Financials and Targets

  • COM Products and Structure Wireless Wireline
  • AIM Products and Structure Automotive Industrial & Multimarkets Security & ASICs

First Quarter FY 2007 Results:Rev. of EUR 2.13 bn; EBIT of EUR 216 m

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Group Results and FY 2007, FY 2008 Outlook (excluding Qimonda)

Infineon defines EBIT as Earnings (loss) Before Interest and Taxes.

*) FY2006: Includes net charges of € 199 million relating primarily to various impairments and restructuring measures as well as expenses incurred in connection with the insolvency of BenQ Mobile Germany and the IPO of Qimonda.

Automotive, Industrial & Multimarket Results and Outlook

  • FY 2006: more than € 70m expenses from Perlach/Kulim fabs; losses in Chipcard.
  • FY 2007: expect sales growth y-o-y; EBIT likely to rise y-o-y; close to 10% EBIT margin for Q4 FY 2007.
  • FY 2007: Expenses for Perlach closure and Kulim ramp similar to FY 2006 levels
  • ÆPerlach closed, Kulim start-up expense to run out Q4 FY 2007.
  • Beyond FY 2007: continued sales growth, >10% EBIT margin.

Communication SolutionsResults and Outlook

  • FY 2006: € 92m in charges included in results, mainly relating to BenQ insolvency; clean EBIT € -139m.
  • FY 2007: expect sales decline y-o-y; expect annualized c. € 40 m cost reduction from Jun Q onwards; EBIT before special effects to remain broadly flat y-o-y.
  • Beyond FY 2007: Wireless business to break-even in Dec Q 2007; expect strong sales growth vs FY 2007 and positive EBIT.

Other Operating Segments Results and Outlook

  • FY 2007: share of loading of ALTIS fab 100% since 1-Jan-07; agreement with Qimonda over Dresden 200mm fab extended to 30-Sep-2009; sales to trend lower.
  • FY 2007: EBIT around break-even.
  • Beyond FY 2007: Sales to decline gradually as revenues with Qimonda move lower; EBIT around break-even.

Corporate & Eliminations Results and Outlook

  • FY 2006: Sales are negative as intra-group wafer deliveries to Qimonda are being eliminated; EBIT contains net charges of EUR 105 m relating mainly to Qimonda IPO (EUR 65 m) and to restructuring measures (EUR 25 m). Ongoing expenses in C&E: e.g. stock options, idle capacity cost, elimination of intra-group profits on wafers sold to Qimonda.
  • FY 2007: negative sales to persist due to inter-company elimination; amount driven by sales to Qimonda in OOS. EBIT before charges to improve significantly from FY 2006 level to c. EUR -60 m. Expect charges around EUR 30 m for baseband and ALTIS combined.
  • Beyond FY 2007: Expect to contain EBIT loss excluding charges at approximately FY 2007 levels.

Gross Cash, Gross Debt and Net Debt

Financial structure of the Logic business for the past quarters

Target CapEx/Sales 10-12% beyond FY 2007

*) w/o intangibles

Infineon Businesses

CommunicationSolutions

Mobile Phone PlatformsMobile Phone Platforms

Feature Phones

Entry Phones

Mobile Software

RF SolutionsRF Solutions

RF Engine

Tuner Systems

Connectivity

Access

Automotive, Industrial & Multimarket

AutomotiveAutomotive

Microcontroller

Automotive Power

Sense & Control

Industrial & Multimarket Industrial & MultimarketPower Management & Drives

Discrete Semiconductors

Security & ASICs Security & ASICs

ASIC Design & Security

Chip Card & Security ICs

Group Financials and Targets

COM Products and Structure

Wireless Wireline

AIM Products and Structure Automotive Industrial & Multimarkets

Security & ASICs

Major COM Growth Opportunities

Infineon Engineers Develop World-Class Products

Stand-alone RF Transceivers and Platform Solutions

Source: ABI Research, 2006; IFX

Complete Mobile Phone Platform Solutions for Major Growth Markets

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The "Domino Effect"Market Trends

Network Replacement Market Trends

Group Financials and Targets

COM Products and Structure Wireless Wireline

AIM Products and Structure

  • Automotive
  • Industrial & Multimarkets
  • Security & ASICs

Automotive Microelectronics Trends − More Than 50% of \$-value of Electronics is Semiconductors

CAGR of 7.4% for the Automotive Semiconductor Market

Source: Strategy Analytics, August 2006

Areas of Growth in Automotive

Energy Efficiency

  • Fuel consumption
  • Energy recovery

Regulation

  • Emission limits
  • Safety (TPMS, emergency call, VSC)
  • Toll collection

Driving Experience

  • Comfort features
  • Safety
  • Proactive warning, assist and intervention

Emerging Markets

China and India

Powertrain

  • 32-bit motor control
  • Hybrid drivetrain

Safety

  • Airbag, ABS & VSC
  • Driver assistance systems

Body

  • Electrical motor control
  • LEDs for lighting

Infotainment

Integration of consumer devices into vehicle

Market

The Very Fragmented Industrial Market Represents 7.6% or USD 18.9 bn of the Total Semiconductor Market in 2006

Industrial Semiconductor MarketRevenues [USD m]

Industrial semiconductor marketper Application [USD m]

Energy Demand and Electricity Consumption are on the Rise – We Can Help to "Do More With Less"

Savings of 25% are possible in current electrical energy consumption which equals the demand of the USA.

Source: Fraunhofer Institute, IISP, LES-Flyer, 2004

Energy Generation and Distribution Grid Coupling and Long Range Energy Transport

April-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 27 FACTS = Flexible Alternating Current Transmission Systems; SVC = Static Variable Compensator; HVDC = High Voltage Direct Currect

Energy Consumption Focus is on Efficient Power Conversion

Today's Savings Potential from Using Electronic Power Conversion and Control

Source: Infineon, 2005; BVG – Berlin, 2005; Siemens/ECPE, 10/2005

Infineon –Never stop thinking

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