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Infineon Technologies AG Investor Presentation 2007

Mar 13, 2007

222_ip_2007-03-13_3a7e004b-5f9b-4d51-9677-8509032b4515.pdf

Investor Presentation

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IFX Day 2007

Munich, March 13, 2007

Strategic Direction and Financial Targets

Dr. Wolfgang Ziebart President and CEO

infineon Never stop thinking


Disclaimer

Infineon

This presentation was prepared as of March 13, 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.

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon

Agenda

  • Recent Steps
  • Current Status
  • Driving Growth
  • Driving Margins
  • Reducing Capital Intensity
  • Summary

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon

Agenda

  • Recent Steps
  • Current Status
  • Driving Growth
  • Driving Margins
  • Reducing Capital Intensity
  • Summary

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Recent Steps

Infineon

Strategic Redirection

3 to 2

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Recent Steps

Infineon

Automotive, Industrial & Multimarket

  • Turn-around Discretes
  • Turn-around Chipcard
  • Ramp-up of new power fab in Kulim, Malaysia, in record time

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Recent Steps

Infineon

Communication Solutions

  • Profit, Share Gains in Access
  • Turn-around in Tuner, RF Power
  • Customer Wins in Baseband: Nokia, LG, Panasonic and others

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon

Agenda

  • Recent Steps
  • Current Status
  • Driving Growth
  • Driving Margins
  • Reducing Capital Intensity
  • Summary

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Current Status Infineon

Revenue

> € 4 billion

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 9


Current Status Infineon

More than

30,000 employees

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 10


Current Status Infineon

R&D Spending

~ € 800 m

Some 6,000 R&D staff

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 11


Current Status Infineon

More than

20,000

patents

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 12


Current Status

Infineon

Power

img-0.jpeg

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Source: IMS Research, Sep. 2006

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.

Slide 13


Current Status

Infineon

Wireline Access

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img-3.jpeg

Source: Gartner Dataquest, June 2006

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Current Status

Infineon

Wireless TRx

img-4.jpeg

Source: Gartner Dataquest, Strategy Analytics, Infineon

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Current Status

Infineon

Chipcard

Market Share 29%

img-5.jpeg

img-6.jpeg

Source: Gartner Dataquest, June 2006

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Current Status

Infineon

Automotive

img-7.jpeg

img-8.jpeg

Source: Strategy Analytics, May 2006

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon

Agenda

  • Recent Steps
  • Current Status
  • Driving Growth
  • Driving Margins
  • Reducing Capital Intensity
  • Summary

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Growth

Infineon

Energy Efficiency

  • Energy savings in power generation
  • Energy savings in power transmission
  • Energy savings in power consumption

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Growth

Infineon

Security

  • Protection and privacy of personal and company data
  • Secure e-commerce
  • Contactless identification and payment

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Growth

Infineon

Connectivity

  • Mobile Phone Platforms: full suite of solutions
  • Broadband Access: CO and CPE
  • Leader in RF: wireless connectivity everywhere

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Growth

Infineon

Growth in Auto

  • Growth Drivers Body and Safety
  • Hybrid Cars
  • Automotive Connectivity

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Growth

Infineon

Growth in Industry

  • CoolMOS in AC/DC
  • OptiMOS in DC/DC
  • IGBTs in DC/AC

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Growth

Infineon

Growth in Broadband

  • VINAX for VDSL2
  • Danube for ADSL2 / VoIP
  • CPE

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Growth

Infineon

Growth in Wireless

  • Design Win Momentum in Single Chip Phones
  • Design Win Momentum in Platforms
  • Design Win Momentum in RF CMOS Transceivers

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon

Agenda

  • Recent Steps
  • Current Status
  • Driving Growth
  • Driving Margins
  • Reducing Capital Intensity
  • Summary

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Driving Margins Infineon

In FY 2006

Double-digit EBIT margin

on

~ € 3 bn in sales

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 27


Driving Margins

Infineon

In FY 2006

EBIT loss on ~ € 1 bn sales

in

Chipcard and mainly Baseband

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.

Slide 28


Driving Margins

Infineon

AIM in FY 2006

Expense > € 70 m for Fabs

Zero

from Sep. 2007 on

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.

Slide 29


Driving Margins

Infineon

Chipcard in FY 2006

Double-digit € m loss

Chipcard in FY 2007

Break–Even and New Products

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.

Slide 30


Driving Margins Infineon

Baseball and Professional Development

Baseband in FY 2006 Causing Losses in COM

Baseball and Professional Development

Design Wins

& Strong Ramp

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 31


Driving Margins

Infineon

Target: ~ 10% EBIT Margin

FY 2007: ~ EBIT Break-Even

FY 2009: ~ 10% EBIT Margin

FY 2008: well on our way towards 10%

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon

Agenda

  • Recent Steps
  • Current Status
  • Driving Growth
  • Driving Margins
  • Reducing Capital Intensity
  • Summary

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Reducing Capital Intensity Infineon

Advanced Logic

65 nm fabless

Specialty Technologies

In-house

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 34


Reducing Capital Intensity Infineon

CapEx / Sales

10-12%

13-Mar-07 Copyright © Infineon Technologies 2007. All rights reserved. Slide 35


Infineon

Agenda

  • Recent Steps
  • Current Status
  • Driving Growth
  • Driving Margins
  • Reducing Capital Intensity
  • Summary

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon

Summary

FY 2007

  • Ramp Baseband
  • Stabilize Chipcard
  • Lower Fab Expenses
  • Break-Even EBIT

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.

Slide 37


Summary

infineon

FY 2008 and Beyond

  • Sales growth in AIM and COM
  • 10+% EBIT margin in AIM, profit in COM
  • ~ 10% EBIT margin FY2009, well on our way towards that in FY 2008
  • Lower capital intensity

13-Mar-07

Copyright © Infineon Technologies 2007. All rights reserved.


Infineon – Never stop thinking

Infineon Never stop thinking