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Infineon Technologies AG Investor Presentation 2008

Feb 8, 2008

222_ip_2008-02-08_0cacc9e7-0518-4a91-aed2-d3ad392f24ec.pdf

Investor Presentation

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First Quarter FY 2008

Quarterly Update

Infineon Technologies AG Investor Relations

Disclaimer

This presentation was prepared as of February 7, 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, 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 December 7th, 2007 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.

First Quarter FY 2008 Results Revenues of € 1.60bn; EBIT of € -368m

Effective Oct 1, 2007, the Company has reclassified certain financial income, inter-company IT-charges and income (loss) from marketable securities from its logic segments (AIM, COM) into the Corporate and Eliminations segment. Prior periods have been reclassified to be consistent with the revised reporting structure and presentation

Infineon excluding Qimonda Second Quarter FY 2008 Outlook

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Developing Infineon – 5 Levers

Growth: Energy Efficiency, Communications, Security

1

Earnings: targeting ~10% EBIT margin FY 09 with headwinds growing, low to mid single-digit EBIT margin in FY 08

4

Capital Intensity: from 12% CapEx/Sales in FY 07 towards ~10% in FY 08, even lower possible thereafter

Strategy: Qimonda divestiture, selective acquisitions to strengthen the platform

5

Growth: Energy Efficiency, Communications, Security

Organic Growth of Infineon at Constant Currency

Growth Rate

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Copyright © Infineon Technologies 2008. All rights reserved. Page 7

Powerful Demand Drivers

Energy Efficiency: Our Products Help Reduce Losses Along the Entire Energy Distribution Chain

Copyright © Infineon Technologies 2008. All rights reserved. Page 9

New Applications Driving Growth In Automotive Semiconductors

Semiconductor Growth (in US\$) in Automotive Applications 2007-2012 (CAGR)

Body 8.9% Safety 10.1% PowertrainInfotainment

6.9%5.4%

Source: Strategy Analytics, 2007

Security: Growth in Payment Chip Card ICs

Communication:Key Cellular Industry Trends and Success Factors

Key trends Key success factors

1) Source: ABI Research, Mobile Device Market Data, Q4 2007

Copyright © Infineon Technologies 2008. All rights reserved. Page 12

Complete Mobile Phone Platform Solutions for Major Growth Markets

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Integrated in one chip

Copyright © Infineon Technologies 2008. All rights reserved. Page 13

Music and Mobile Internet for Emerging Markets: Introducing 65nm Single-Chip Solutions

Infineon Has All it Takes to Further Grow the Wireless Business

Strong position in single-chip solutions:

  • Shipped more than 50 million single-chip solutions
  • IFX is world's first to ramp EDGE single-chip solution
  • Sampling 65nm single-chip solutions for GSM/GPRS and EDGE markets

Strong momentum in 3G platforms:

  • 3G RF transceiver in production or achieved design win at four Top-5 OEMs
  • Proven 3G platform solution
  • HSDPA platform ramp in 1H 2008
  • Proven 3G protocol stack

Infineon serves all Top-5 OEMs:

  • Nokia (RF, design-win for single-chip platform)
  • Samsung (EDGE and 3G RF, GPRS and EDGE platforms)
  • Motorola (design-win for 3G RF)
  • Sony Ericsson (3G RF)
  • LG Electronics (Single-chip and EDGE platforms)

3

Earnings: targeting ~10% EBIT margin FY 09 with headwinds growing, low to mid single digit EBIT margin in FY 08

We Target ~10% EBIT Margin in FY 2009

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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.
  • **) FY2007: Includes net charges of € 128 million relating primarily to various impairments and restructuring measures as well as expenses incurred in connection with the secondary offering of Qimonda shares.

Detailed Outlook for AIM and COM

Automotive, Industrial & Multimarket

Communication Solutions

[€ m]

  • Q1 FY 2008: reported sales growth 5% y-o-y; growth excl. divestitures and on constant currency basis +13% y-o-y; EBIT includes €28m gain from sell of Bipolar stake.
  • FY 2008: Expect sales and EBIT excl. one-offs to be down slightly y-o-y due to adverse currency impact and deconsolidation of business.

  • FY 2009: Growth in sales and EBIT

  • Q1 FY 2008: Wireless and COM EBIT positive before €14m in-process R&D write-off; EBIT also contained €9m amortization of acquisitionrelated intangible assets.

  • FY 2008: expect 25-30% sales growth and a low to mid single-digit negative EBIT margin before charges; takes into account ~€25m amortization of acquisition-related intangible assets.
  • FY 2009: Continued growth in sales; clearly positive EBIT

Detailed Outlook for OOS and C&E

Other Operating Segments

Corporate & Eliminations

  • FY 2008: Sales to decline y-o-y as Dresden 200mm fab will ship last wafers to QI in April 2008; EBIT around break-even

  • FY 2009: further y-o-y sales decline; no supplies to QI for entire year

  • Q1 FY 2008 results included charges of €3m.

  • FY 2008: Expect to contain EBIT loss before charges at ~ €40-60m per year

FY 2009: EBIT loss comparable to FY 2008.

Copyright © Infineon Technologies 2008. All rights reserved. Page 19

Capital Intensity: from 12% CapEx/Sales in FY 07 towards ~10% in FY 08, even lower possible thereafter

Lowering CapEx/Sales ratio to 10%-11%

Solid Capital Structure

Gross Cash, Gross Debt and Net Debt for Infineon excl. Qimonda

Strategy: Qimonda divestiture, selective acquisitions to strengthen the platform

Lowering our Stake in Qimonda; Exploiting Strategic Opportunities

Copyright © Infineon Technologies 2008. All rights reserved. Page 26

Key Financials for Infineon excl. Qimonda as reported

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