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Infineon Technologies AG

Investor Presentation Dec 3, 2008

222_ip_2008-12-03_b228a2a6-0910-4a3a-8a89-d03422911fa4.pdf

Investor Presentation

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Fourth Quarter FY 2008

Quarterly Update

Infineon Technologies Investor Relations

Disclaimer

This presentation was prepared as of December 3, 2008 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, the ability of Qimonda to achieve cost savings and the success of any strategic initiatives it may undertake, and any potential disposal of Infineon's interest in Qimonda. 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 at our facilities, the actions of competitors, the availability of funds for planned expansion efforts, and the outcome of antitrust investigations and litigation matters, the success of any corporate activities we may undertake with respect to our interest in Qimonda, 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 December 7th, 2007. 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 in light of developments which differ from those anticipated.

ÆIFX Results and Outlook

ÆIFX Division Highlights

ÆFinancial Details

Fourth Quarter FY 2008 Results (US GAAP): Revenues of € 1.15bn; EBIT of € -220m

Focus on Energy Efficiency, Communications, Security

First Quarter FY 2008 Outlook (IFRS)

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3/4 of headcount reduction target achieved.

Since August, additional savings have been defined.

Savings expectation in OpEx has doubled from >€50m to >€100m annualized from F3Q 08 to F4Q 09.

Whilst planned savings in COGS have also been revised up, effects of downturn will more than offset these savings on the COGS level.

ALTIS:

Æ Reclassification into assets held-and-used given lower likelihood of sale; negotiations ongoing.

Qimonda:

  • Æ It may not be possible for Infineon to reach <50% Qimonda holding until AGM 2009.
  • Æ Infineon will not pay a Qimonda share dividend at AGM 2009. Given current share price, such distribution is no longer practicable while, at the same time, bearing administrative costs disproportionate to the value of the shares.
  • Æ All efforts now being focussed on reaching strategic/ financial investor solution.

ÆIFX Results and Outlook

ÆIFX Division Highlights

ÆFinancial Details

Automotive Division

Autoliv selectes Infineon's NovalithIC™ power chip as sole supplier of power semiconductors for its nextgeneration seatbelt pretension systems.

Bosch selects Infineon's RASIC™ radar chip for adaptive cruise control.

Industrial & Multimarket Division

Chip Card & Security Division

Major National Projects (Extract)

Infineon has implemented projects in more than 60 countries.

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---------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Wireline Communications Division

Industry First Single-Chip ADSL Gateway Solution with Integrated Gigabit Ethernet

XWAY™ ARX168:

ADSL2+downstream up to 25Mbit/s upstream up to 1Mbit/s 3

Gigabit Ethernet LAN 3

2x USB2.03

Concurrent WLAN 11b/g/n 3

Highlights:

  • True single-chip ADSL2+ solution with smallest footprint in the market (17 x 17 mm²)
  • High performance 32-bit smart CPU architecture
  • Support for high WLAN 802.11n throughput of more than 150Mbit/s
  • Advanced IPTV features for highest quality of experience
  • Support of EU Code of Conduct on Energy Consumption of Broadband Equipment

Infineon Raises the Bar in Package Design: eWLB (embedded wafer-level ball grid array)

Outstanding cost performance Improved electrical performance

X-GOLD™213 and X-GOLD™618 are first chips to take advantage of eWLB technology

package elements from the upside down

ÆIFX Results and Outlook

ÆIFX Division Highlights

ÆFinancial Details

Key differences for IFX P&L in IFRS

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BalanceSheet Capitalization of development cost Æ intangible assets. long term debt Æ lower amount due to option component in equity-linked financing. equity slightly higher: due to classification of minority interest (mainly Altis) as equity.

Cash Flow

change in allocation of development cost cash flow between operating and investing activities. Net increase (decrease) in total cash unchanged.

New IFX Profit measurement:Segment Profit

From October 1, 2008, Infineon uses Segment Profit to assess the operating performance of the reportable segments and as a basis for allocating resources among the segments.

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Detailed Financials forAIM and COM (US GAAP)

Automotive, Industrial & Multimarket

Communication Solutions

  • FY 2008: reported revenues down 2% y-o-y. Revenues excluding acquisitions and divestitures and on constant currency base increased by 5% y-o-y. EBIT increase due to strong Chipcard business.
  • Q4 FY08: revenues up 8% q-o-q due to seasonal effects in industrial business. Auto stable q-o-q as weak US market was offset by solid Asia market. Strong high- and low power business. Chipcard stable, ASIC up due to seasonal effects.

  • FY 2008: revenues up 29% y-o-y due to acquisitions and HSDPA ramp up. Revenues excluding acquisitions and divestitures and on constant currency base increased 16% y-o-y.

  • Q4 FY08:revenues up 24% q-o-q due to seasonal strength and better than anticipated demand from a HSDPA customer. Wireline declinedslightly. EBIT includes EUR 5m net gains mainly from sale of BAW filter business.

Financials and Outlook forOOS and C&E (US GAAP)

Other Operating Segments

Corporate & Eliminations

  • FY 2008: Revenues in Other Operating Segments and Corporate & Elimination included sales of wafers to Qimonda until Q3 FY08.
  • Q4 FY08:EBIT in Other Operating Segments and Corporate & Eliminations included net charges of EUR 233m, of this EUR 166m in connection with the company's IFX10+ cost-reduction program and EUR 59m in connection with ALTIS.
  • Q1 FY09 (IFRS): expect c. €20m of Segment Loss; around twice the normal amount given last quarter of costs to rightsize Dresden fab after expire of Qimondafoundry-agreement.
  • FY 2009 (IFRS): further y-o-y sales decline; no supplies to QI for entire year; Segment Loss of c. EUR 50m.

Gross Cash, Gross Debt and Net Debt (US GAAP)

CapEx and D&A

According to Fab-light Strategy, We Will Continue to Increase Our Foundry Share

All pie charts indicate in-house/subcontractor split on average over FY07. Sale of ALTIS not considered.

Frontend Power

Focus on in house production

Increase flexibility with higher foundry share

Summary

IFX10+ cost reduction program was started early, before economic downturn began to impact. Program is being implemented, additional savings under definition.

In addition to IFX10+, emphasis on cash flows will be increased during the downturn.

We will maintain a focus on excellent customer relationships and investments into our portfolio of outstanding products.

Aim of those measures is to emerge stronger from the downturn and to position us for continued market share gains.

Infineon Condensed Consolidated Statements of Operations (US GAAP)

)
P
l
i
i
d
U
d
i
d
t
r
e
m
n
a
ry
a
n
n
a
u
e
3 m
t
hs
de
d
on
en
Fo
r t
he
de
d
y
ea
rs
en
in
Eu
i
l
l
ion
ro
m
Se
3
0,
0
7
p
Ju
3
0,
0
8
n
Se
3
0,
0
8
p
Se
3
0,
0
7
p
Se
3
0,
0
8
p
Ne
les
t s
a
1,
1
2
7
1,
0
2
9
1,
1
5
3
4,
0
7
4
4,
3
2
1
Co
f g
ds
l
d
st
o
oo
so
(
)
7
2
1
(
)
6
6
6
(
)
7
7
5
(
)
2,
7
0
2
(
)
2,
8
2
3
Gr
f
it
os
s p
ro
4
0
6
3
6
3
3
8
7
1,
3
2
7
1,
4
9
8
Re
h a
d
de
lop
nt
se
ar
c
n
ve
me
ex
p
en
se
s
(
)
1
9
1
(
)
1
8
1
(
)
1
8
7
(
)
7
6
8
(
)
7
5
5
Se
l
l
ing
l a
d a
dm
in
ist
ive
rat
, g
en
era
n
ex
p
en
se
s
(
)
1
3
5
(
)
1
4
5
(
)
1
5
1
(
)
5
0
0
(
)
5
6
9
Re
ing
ha
str
tur
uc
c
rg
es
(
3
)
(
2
)
(
1
7
0
)
(
4
5
)
(
1
8
1
)
Ot
he
ing
inc
(
),
t
t
r o
p
era
om
e
ex
p
en
se
ne
(
)
2
4
3
(
)
1
1
8
2
0
(
)
4
3
Op
ing
inc
(
los
)
t
er
a
om
e
s
5
7
8
7
(
2
4
8
)
9
7
(
5
0
)
(
),
Int
t
inc
t
er
es
om
e
ex
p
en
se
ne
(
)
7
(
)
1
2
2 (
)
4
0
(
)
2
6
Eq
ity
in
ing
f a
iat
d c
ies
ea
rn
s o
ss
oc
e
om
p
an
u
1 1 4
Ot
(
),
he
ing
inc
t
t
r n
on
-o
p
era
om
e
ex
p
en
se
ne
(
)
7
(
)
1
(
)
1
1
7 (
)
1
6
M
ino
ity
int
sts
r
ere
(
)
8
(
)
7
3
8
(
)
1
4
1
4
Inc
(
los
)
be
fo
inc
d
isc
inu
d
ion
d
ta
t
t
om
e
s
re
om
e
xe
s,
on
e
op
er
a
s,
an
d
ina
los
xt
e
rao
r
ry
s
5
3
5
9
(
)
2
1
8
3
2
(
)
7
4
Inc
e t
om
ax
ex
p
en
se
(
2
)
5
(
1
4
)
(
2
6
)
(
6
9
)
(
6
1
)
Inc
(
los
)
fro
inu
ing
ion
nt
t
om
e
s
m
co
o
p
er
a
s
2
8
4
5
(
2
4
4
)
(
3
7
)
(
1
3
5
)
Lo
fro
d
isc
inu
d o
ion
f t
t
t
t o
ss
m
on
e
p
era
s,
ne
ax
(
3
0
8
)
(
6
3
)
7
(
1
9
)
5
(
2
9
6
)
(
2,
9
8
)
7
Lo
be
fo
d
ina
los
tra
ss
re
ex
or
ry
s
(
2
8
0
)
(
5
9
2
)
(
7
6
3
)
(
3
3
3
)
(
3,
1
2
2
)
Ex
d
ina
los
f ta
tra
t o
or
ry
s,
ne
x
(
3
)
5
Ne
los
t
s
(
2
8
0
)
(
5
9
2
)
(
7
6
3
)
(
3
6
8
)
(
3,
1
2
2
)

Basic and diluted earnings (loss) per share (in Euro)*:

Shares in million

W
ig
hte
d a
ha
uts
tan
d
ing
ba
ic
d
d
i
lut
d
e
ve
rag
e s
res
o
s
an
e
7
4
9
7
5
0
7
5
0
7
4
9
7
5
0
Ba
ic
d
d
i
lut
d e
ing
(
los
)
ha
fro
inu
ing
ion
(
in
Eu
)
nt
t
s
an
e
ar
n
s
s
p
er
s
re
m
co
o
p
era
s
ro
0.
0
4
0.
0
6
(
)
0.
3
3
(
0.
0
)
(
)
5
0.
1
8
Ba
ic
d
d
i
lut
d
los
ha
fro
d
isc
inu
d
ion
f ta
(
in
Eu
)
t
t
t o
s
an
e
s p
er
s
re
m
on
e
op
era
s,
ne
x
ro
(
0.
4
1
)
(
0.
8
)
5
(
0.
6
9
)
(
0.
4
0
)
(
3.
9
8
)
Ba
ic
d
d
i
lut
d
los
ha
fro
d
ina
los
f ta
(
in
Eu
)
tra
t o
s
an
e
s p
er
s
re
m
ex
or
ry
s,
ne
ro
x
(
0.
0
)
4
Ba
ic
d
d
i
lu
d
los
ha
(
in
Eu
)
te
s
an
s p
er
s
re
ro
(
0.
3
7
)
(
0.
7
9
)
(
1.
0
2
)
(
0.
4
9
)
(
4.
1
6
)

* Quarterly earnings (loss) per share may not add up to year-to-date earnings (loss) per share due to rounding.

Infineon consolidated Balance Sheet (US GAAP)

(Preliminary and Unaudited)

in
Eu
i
l
l
io
ro
m
n
Se
3
0,
0
7
p
Se
3
0,
0
8
p
As
ts
se
Cu
t a
ts:
rre
n
ss
e
Ca
h a
d c
h e
iva
len
ts
s
n
as
q
u
1,
0
7
3
7
4
9
Ma
ke
b
le
i
ies
ta
t
r
se
cu
r
2
1
0
1
4
3
Tr
de
iva
b
le,
ts
t
a
ac
co
un
rec
e
ne
6
2
0
5
8
9
Inv
to
ies
en
r
5
9
8
6
6
3
De
fe
d
inc
tax
rre
om
e
es
3
4
2
6
O
he
t
t a
ts
r c
ur
ren
ss
e
3
0
3
3
7
9
fo
As
ts
he
l
d
d
isp
l
se
r
os
a
5,
6
5
3
2,
2
2
4
To
ta
l c
t a
ts
ur
re
n
ss
e
8,
4
9
1
4,
7
7
3
Pr
lan
d e
ip
ty
t a
t,
t
op
er
p
n
q
me
n
ne
u
,
1,
4
6
2
1,
3
1
1
In
ta
i
b
le
ts,
t
ng
as
se
ne
8
9
3
6
2
Lo
inv
-te
tm
ts
ng
rm
es
en
2
4
3
3
Re
ic
d c
h
tr
te
s
as
7
7
7
7
De
fe
d
inc
tax
rre
om
e
es
4
4
6
4
0
2
Pe
ion
ts
ns
as
se
4 1
6
O
he
t
ts
r a
ss
e
1
6
0
1
0
9
To
l a
ta
ts
ss
e
5
1
0,
7
3
7,
0
8
3
in
Eu
i
l
l
io
ro
m
n
Se
3
0,
0
7
p
Se
3
0,
0
8
p
L
ia
b
i
l
i
ies
d s
ha
ho
l
de
' e
i
t
ty
a
n
re
rs
q
u
Cu
l
ia
b
i
l
i
ies
t
t
rre
n
:
S
ho
de
b
d c
i
ies
t-
te
t a
t m
tu
t
r
rm
n
ur
re
n
a
r
2
6
0
2
0
7
Tr
de
b
le
ts
a
ac
co
un
p
ay
a
9
6
5
4
8
8
Ac
d
l
ia
b
i
l
i
ies
t
cru
e
3
7
9
4
1
0
De
fe
d
inc
tax
rre
om
e
es
1
0
1
2
O
he
l
ia
b
i
l
i
ies
t
t
t
r c
ur
ren
3
2
6
4
3
5
L
ia
b
i
l
i
ies
he
l
d
fo
d
isp
l
t
r
os
a
1,
8
9
7
2,
0
9
1
To
l c
l
ia
b
i
l
i
ie
ta
t
t
ur
re
n
s
3,
4
6
8
3,
6
4
3
Lo
-te
de
b
t
ng
rm
1,
1
4
9
1,
0
5
1
Pe
ion
l
ia
b
i
l
i
ies
t
ns
3
6
4
1
fe
De
d
inc
tax
rre
om
e
es
2
3
3
Lo
d
l
ia
b
i
l
i
ies
-te
t
ng
rm
a
cc
rue
2
2
2
4
O
he
l
ia
b
i
l
i
ies
t
t
r
1
0
8
1
0
0
To
l
l
ia
b
i
l
i
ie
ta
t
s
4,
8
0
6
4,
8
6
2
M
ino
i
in
ty
te
ts
r
re
s
1,
0
3
3
4
5
7
To
l s
ha
ho
l
de
' e
i
ta
ty
re
rs
q
u
4,
9
1
4
1,
6
4
7
To
l
l
ia
b
i
l
i
ie
d
ha
ho
l
de
' e
i
ta
t
ty
s a
n
s
re
rs
q
u
1
0,
5
3
7
0
8
3
7,

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