Infineon Technologies AG — Investor Presentation 2011

Nov 16, 2011

Fourth Quarter FY 2011Quarterly Update

Infineon Technologies AGInvestor Relations

Infineon at a Glance

Growth Outlook and Margin Resilience

Results and Outlook

Revenue Split by Division

Full FY 2011 revenue: EUR 3,997m

Another Quarter of Solid Financial Performance

	[ ] E U R m	Q 3 F Y 1 1	Q 4 F Y 1 1	0 F Y 2 1 1
	R e e n e v u	1 0 4 3 ,	1 0 3 8 ,	3 9 9 7 ,
	l T S t t o a e g m e n l R t e s u	2 1 2	1 9 5	8 6 7
	l S i T t R M o a a g n r	2 0 3 %	1 8 8 %	1 9 % 7
0 3 1 4 1 0 3 8 2 1 2 9 1 5 Q 3 F Y 1 1 Q 4 F Y 1 1	* N I t e n c o m e	1 9 0	1 2 5	1 1 1 1 1 1 9 9 , ,
	I t t n e s m e n v	3 9 1	2 3 7	8 8 7
	f F C F t. r o m c o n i t o p e r a o n s	8 -	9 7	0 6 1
	h G C o s s a s r	2 8 5 5 ,	2 6 9 2 ,	2 6 9 2 ,
l R S R t t e e n e e g m e n e s v u u	h N C t e a s	2 2 4 6 ,	2 3 8 7 ,	2 3 8 7 ,

* Net Income FY 2011 includes a book gain of EUR 352m from the sale of WLS to Intel Mobile Communications. Net Income Q4 FY 2011 and FY 2011 include EUR 122m loss from discontinued operations, net of income taxes.

Tight Customer Relationships are Based on System Knowhow and App Understanding

Infineon Holds Top Positions in All Target Markets

Source: IMS Research, August 2011.Source: Strategy Analytics, April 2011.

Source: IMS Research, August 2011.

Infineon at a Glance

Growth Outlook and Margin Resilience

Results and Outlook

New Era: Multiple Factors Driving Demand for Power Semiconductors

Growth: Rising Global Car Production and Silicon Content Drive Market

By Region, Main Growth Drivers are BRIC Markets and Recovery in North America

Electric Vehicles (EV) and Hybrid EVs (HEV) Drive Semiconductor Demand

ICE vs. EV/HEV Semiconductor BOM

• Fuel cost, CO2 reduction and price are main drivers for EVs and HEVs.
• Semiconductor bill-of-material of an EV/HEV is 2 to 3 times higher than total semiconductor bill-of-material on an ICE.
• 50-80% related to IGBT and diode chips in state-of-the-art module packages.

Conversion of Electrical Energy

Semi Content per MW in Wind Turbines Much Higher Than in Trad. Power Plants

Nuclear plant, coal-fired plant

• No fluctuation in amplitude and frequency. Direct grid coupling possible.
• Power semiconductor content: ~ €200 per MW.
• Semiconductors primarily used for uninterruptable power supplies.

Wind turbines

turbines; ~ €9,000 per MW for dircet conversion turbines.

Motor Drives and Traction: Focus on Efficient Power Conversion and RPM Control

Direct AC connection

• About 60% of industrial energy is used by electrical motors.
• For each \$1 spent to purchase a more efficient electrical motor, \$100 of energy cost can be saved during the life of such motor.
• Conventional motor drives are being replaced by intelligent inverter-based drives, saving up to 40% energy.
• AC/DC/AC conversion allows permanent control to match output with the needs.
• Power semiconductor content: ~ €5,000 per MWor \$10-100k, depending on application.

10% Growth or More p.a.Expected for Infineon

Infineon: ≥ 10% p.a.

4 Reasons for Sustainable Profitability ─#1: High Barriers to Entry

Long product life cycles

System knowhowand understanding

Strong quality and reliability req's

• For many markets we address, deliveries of semis need to be ensured for very long periods of time:
• • For car industry: 7 to 24 years;
• • For train industry: about 15 years.
• Both deep and wide know-how and understanding of our customers' applications needed for making best in class solutions:
• e.g. HEV/EV needs both automotive and industrial expertise.
• Products need to reliably perform well in the field over longer periods of time:
• • Airbag reliability required as long as the car is in use;
• • Wind turbines should function 30 years.

#2: Semiconductors – Core Enablers of Innovation and Higher Functionality

Energy Efficiency

Mobility Security

Power supplies

More advanced power semiconductors allow smaller, denser, lighter and more efficient power supplies.

VSD

More precise and efficient RPM-control versus mechanical transmission.

Recuperation Implemented in trains for years; brought to

cars by the advent of HEV/EVs.

Power steering

EPS is replacing hydraulic-mechanical power steering allowing more flexibility in car design and less power consumption.

Identification

Chip-based passports and national ID cards allow much higher level of security compared with paperonly ID cards.

Brand protection Chip-based authentication of accessories, e.g. batteries.

#3: Semis Represent a Negligible Part of the Value of the End Product

Copyright © Infineon Technologies 2011. All rights reserved. Page 18

#4: Infineon's Core Competencies ─Power Semiconductors and eControl

Design and manufacturing of Core competence powerpower semis tightly coupled

• Thin-wafer technology
• Super-junction MOSFETs
• Silicon-Carbide (SiC)
• IGBT module packaging

Core competence eControl

• Automotive real-time 32-bit microcontroller (TriCore™)
• Automotive 32-bit multi-core design (AURIX™)
• Low-power security controller
• Safety Guard

Sustainable Profitability:We Will Keep High Margins

Infineon:~20% under normal industry conditions~15% through cycle

Target Operating Model

	F Y 2 0 1 1 F Y 2 0 1 2 e		L t o n g e e m r r
R e e n e v u	b D i e c e a s n g r y 3 9 9 b d E U R 7 i n a m l d % i i i t s n g e g -		1 0 % ≥ h t g o p a r w
i G o s s m a g n r r	4 1 4 %	4 0 % <	l F t a o r i i n e n g c r a s F Y 2 0 1 2 v s
& R D	0 % 1 1 f l o s a e s	i I n c e a s n g r b 0 % 5 1 y –	d i L t o o m w - - % t e e n s f l o s a e s
S G & A	2 % 1 1 f l o s a e s	I i n c e a s n g r b 0 % 5 1 y –	% L t o e e n s w - f l o s a e s
l l T S R t t t o a e g m e n e s u i m a r g n	1 9 7 %	d L i t o w o m % t e e n s	I n c r e a s e F Y 2 0 1 2 v s

Infineon at a Glance

Growth Outlook and Margin Resilience

Results and Outlook

Q4 FY11: Maintained SolidTotal Segment Result Margin

All Segments Contribute toTotal Segment Result

OpEx In-line With Target Operating Model

Working Capital*

Working Capital

Inventories

Trade and other payables

Trade and other receivables[days]

* For definition please see slide 32 in appendix.

Investments Remain High to Exploit Growth Potential

* For definition please see slide 32 in appendix.

High Gross and Net Cash Position Maintained

*Consists of Convertible Bond 2014 (nominal value EUR 137m; book value EUR 114m).

• Gross and net cash increased despite accelerated capital returns in Q4 FY11.
• FY 2011: Repurchases of nominal EUR 59m of CB 2014 (~26m shares underlying) and 4m shares for total of €199m in cash.

Guidance for Q1 and FY 2012

	O l k Q 2 1 F Y 1 t o o u ( d ) Q 4 F Y 1 1 t c o m p a r e o	O l k 2 0 2 F Y 1 t o o u ( d ) F Y 2 0 1 1 t c o m p a r e o
R e e n e v u	d l R i t e e n e o e c n e v u b b 1 0 % t y a o u	d l d M i i i i t s n g e g - d l i t p e r c e n a g e e c n e
l T t o a S t e g m e n l R t e s u M i a g n r	f l 3 % 1 1 4 t o o s a e s	d L i t o o m w - - t t e e n s p e r c e n a g e

New Structure of IMMas of 1 January 2012

Notes

Investments ⁼

'Purchase of property, plant and equipment'

• 'Purchase of intangible assets and other assets' incl. capitalization of R&D expenses

Working Capital ⁼

• ('Total current assets'
• 'Cash and cash equivalents'
• 'Financial investment'
• 'Assets classified as held for sale') –

• ('Total current liabilities'

• Copyright © Infineon Technologies 2010. All rights r ²⁰¹¹ eserved. 'Short term debt and current maturities of long-term debt' 'Liabilities classified as held for sale') DOI (inventory days; quarter-to-date) = ('Net Inventories' / 'Cost of goods sold') * 90 DSO (days sales outstanding; quarter-to-date) = ('Trade accounts receivables (net)' / 'revenue') * 90 DPO (days payables outstanding; quarter-to-date) = ('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) * 90 Page 32

Infineon Consolidated Statements of Operations (IFRS) (unaudited)

	3 m t hs end d on e			12 mo	nt hs end ed
in E mi llio pt for the r sh da ta uro n; e xce pe are	Se 3 0 , 11 p	Ju n 3 0 , 11	Se 3 0 , 10 p	Se 3 0 , 11 p	Se 3 0 , 10 p
Re ve nue	1, 0 3 8	1, 0 4 3	9 4 2	3, 9 9 7	3, 2 9 5
Co f g st o ds ld oo so	( ) 6 1 9	( ) 6 1 3	( ) 5 6 3	( ) 2, 3 4 3	( ) 2, 0 5 8
Gr fit o ss pr o	4 1 9	4 3 0	3 7 9	5 1, 6 4	1, 2 3 7
Re rch d d lop nt e sea an eve me xpe nse s	( ) 1 1 0	( ) 1 0 9	( ) 1 1 4	( ) 4 3 9	( ) 3 9 9
Se llin ral and ad min istr ativ g, g ene e e xpe nse s	( ) 1 1 9	( ) 1 1 4	( ) 1 0 3	( ) 4 4 9	( ) 3 8 6
Ot her tin inc op era g om e	1 0	2	7	2 3	1 8
Ot her tin op era g e xpe nse	( ) 2 1	( ) 8	( ) 1 5	( ) 5 3	( ) 1 2 2
ing in Op at er co me	1 7 9	2 0 1	1 5 4	7 3 6	3 4 8
Fin ial inc anc om e	1 2	1 3	5	3 9	2 9
Fin ial anc exp ens e	( 2 2 )	( 1 4 )	( 1 6 )	( 6 ) 5	( 9 ) 5
Inc e f inv ed for ing th ity tho d est nts unt om rom me ac co us e e qu me	3	( ) 1	1	4	8
Inc fr nti ing io be fo inc rat o me o m co nu o pe ns re o me tax es	1 7 2	1 9 9	1 4 4	7 1 4	2 9 0
Inc x b fit (ex se) e ta om ene pen	7 5	( ) 2 4	4 9	3 0	2 2
Inc fr nti ing io rat o me o m co nu o pe ns	2 4 7	1 7 5	1 9 3	7 4 4	3 1 2
e ( s) Inc los fro m d isc tin ued tio t o f in ta om on op era ns , ne co me xes	( 1 2 2 )	1 5	1 9 7	3 7 5	3 4 8
N et inc o me	1 2 5	1 9 0	3 9 0	1, 1 1 9	6 6 0
Att ribu tab le t o:
No tro llin inte ts n-c on g res	-	-	-	-	1
Sh ho lde f In fin n T hno log ies AG are rs o eo ec	1 2 5	1 9 0	3 9 0	1, 1 1 9	6 9 5
Ba sic rnin r sh trib ble sh ho lde f In fin at uta to ea gs pe are are rs o eo n Te ch log ies AG ( in E ): no uro
We ig hte d a har and ing ( in m illio n) – ba sic tst ve rag e s es ou	1, 0 8 5	1, 0 8 7	1, 0 8 7	1, 0 8 6	1, 0 8 7
Ba sic rnin r sh ( in E ) fro tin uin ion rat ea gs pe are uro m c on g o pe s	0. 2 3	0. 1 6	0. 1 8	0. 6 8	0. 2 9
Ba sic rnin r sh ( in E ) fro m d isc tin ued tio ea gs pe are uro on op era ns	( 0. 1 1 )	0. 0 1	0. 1 8	0. 3 5	0. 3 2
B ic rni sh ( in Eu ) as ea ng s p er are ro	0. 1 2	0. 1 7	0. 3 6	1. 0 3	0. 6 1
f Dil ute d e ing har ttri but ab le t har eho lde arn s p er s e a o s rs o Infi n T hno log ies AG ( in E ): neo ec uro
( n) – We ig hte d a har tst and ing in m illio dil ute d ve rag e s es ou	1, 1 5 2	1, 1 5 7	1, 1 7 2	1, 1 5 9	1, 1 7 1
Dil d e ing har e ( in E ) fro tin uin ion ute rat arn s p er s uro m c on g o pe s	0. 2 2	0. 1 6	0. 1 6	0. 6 6	0. 2 8
Dil d e ing har e ( in E ) fro m d isc tin ued tio ute arn s p er s uro on op era ns	( ) 0. 1 1	0. 0 1	0. 1 7	0. 3 2	0. 3 0
ilu nin ( in ) D te d e ha Eu ar gs pe r s re ro	0. 1 1	0. 1 7	0. 3 3	0. 9 8	0. 5 8

Infineon Consolidated Statements of Financial Position (IFRS) (unaudited)

in Eu illion ro m	Sep 30 , 11	Ju n 3 0, 1	1 Sep 30 , 10
A s set s:
Cur rent ets: ass
Cas h an d ca sh e quiv alen ts	1,0 07	822	1,6 67
Fina ncia l inv estm ents	1,6 85	1,7 63	60
Tra de a nd o ther eiva bles rec	593	828	687
ther in: T rade ceiv able ts re acc oun s	510	584	622
Inve nto ries	507	631	514
Inco ivab le tax me rece	30	15	7
Oth nt fi cial ets er c urre nan ass	2	4	72
Oth nt a ts er c urre sse	142	101	88
Ass ets clas sifie d as hel d fo le r sa	5	4	495
T o tal t as set cur ren s	3,9 71	4,1 68	3, 590
Pro pert y, pl ant and ipm ent equ	1,3 43	1,1 85	838
Goo dwil l and oth er in ible tang ets ass	111	103	87
Inve ted for usin g th uity hod stm ents met acc oun e eq	34	31	35
Def d ta sets erre x as	262	221	308
Oth er fi cial ets nan ass	124	124	119
Oth ts er a sse	28	31	16
T o tal nt a ts no n -cu rre sse	1,9 02	1,6 95	1,4 03
T o tal ets ass	5,8 73	5,8 63	4,9 93
Lia bili ties d e qui ty: an
Cur rent liab ilitie s:
Sho rm d ebt and turit ies o f lon rm d ebt rt-te rent g-te cur ma	68	83	133
Tra de a nd o ther able pay s	735	760	665
ther in: T rade bles ts p acc oun aya	720	718	659
Cur rent visi pro ons	810	619	553
Inco tax ble me paya	59	113	111
Oth nt fi cial liab ilitie er c urre nan s	159	121	16
Oth nt lia bilit ies er c urre	174	315	153
ified for Liab ilitie s cl held sal ass as e	-	-	177
T o tal t lia bili ties cur ren	2,0 05	2,0 11	1,8 08
Lon g-te rm d ebt	237	256	263
Pen sion pla nd s imil mitm ents ns a ar c om	168	147	146
Def d ta x lia bilit ies erre	7	9	11
Non rent visi -cur pro ons	26	45	55
Oth er fi cial liab ilitie nan s	4	6	6
Oth er li abil ities	71	69	79
T o tal nt l iab iliti no n -cu rre es	513	532	560
T o tal liab iliti es	2, 518	2, 543	2,3 68
Sha reho lder s' e quit y:
Ord inar y sh ital are cap	2,1 73	2,1 73	2,1 73
Add ition al p aid- in ca pita l	5,8 54	5,8 75	6,0 48
Acc late d de ficit umu	( 4,5 14)	( 4,6 19)	( 5,6 13)
Oth er re serv es	10	4	17
Own sha res	( 26)	-	-
Put opt ions sha on own res	( 142 )	( 113 )	-
Equ ity att ribu tab le t har eho lde f In fine T ec hno lo g ies A G o s rs o o n	3,3 55	3,3 20	2,6 25
T o tal liab iliti and uity es eq	5,8 73	5,8 63	4,9 93

Infineon Consolidated Statements of Cash Flows (IFRS) (unaudited)

	o nt h d ed 3 m s en
in Eu illion ro m	Sep 3 0 , 11	Jun 3 0 , 11	Sep 3 0 , 10
N et inc o m e	125	190	390
Less : net inco me ( loss ) fro m di ntinu ed o tion t of inco me t sco pera s, ne axes	122	(15)	(19 7)
Adju ncile inco h pro vide d by ratin tiviti stm ents to r net me t t cas eco o ne ope g ac es:
Dep recia tion and rtiza tion amo	98	94	85
Inco me t ax	(75)	24	(49 )
Inter esul est r t	7	4	10
Prov ision for (rec ry of ) do ubtf ul ac nts ove cou	-	(2)	-
Los (gain s) o les o f fina ncia l inve stm ents ses n sa	2	-	-
Los (gain s) o les o f bus ines and inter in s ubsi diari ests ses n sa ses es	-	(2)	-
Los in co tion with the deco lidat ion o f AL TIS ses nnec nso	-	-	(14 )
Los (gain s) o n dis ls of , pla d eq uipm perty nt an ent ses posa pro	(1)	-	-
Inco me f inve ted f sing the equi etho d stm ents ty m rom acc oun or u	(3)	1	(1)
Divid ends ived from ocia ted c anie rece ass omp s	-	5	4
Impa irme nt ch arge s	1	-	-
Sha re-ba sed atio com pens n	1	-	-
Cha in tr ade and othe eiva bles nges r rec	15	(5)	6
Cha in in vent orie nges s	6	(20)	(8)
Cha in o ther ent a sset nges curr s	(11)	1	34
Cha in tr ade and othe able nges r pay s	(1)	31	92
Cha in p rovi sion nges s	39	50	114
Cha in o ther ent l iabil ities nges curr	26	(10)	(80 )
Cha in o ther nd lia biliti ets a nges ass es	(5)	(13)	19
Inter ecei ved est r	11	6	3
Inter aid est p	(2)	(12)	(1)
Inco aid me t ax p	6	(16)	(8)
N et h pr o vi ded by rati ctiv ities fro o nt inui atio cas o pe ng a m c ng o per ns	361	311	399
N et h pr o vi ded by (us ed i n) o atin tivi ties fro m d isco ntin ued cas per g ac	135	(32 )	(12 )
rati o pe o ns o vi rati ctiv ities N et h pr ded by cas o pe ng a	496	279	387
Cas h flo ws f inve sting acti vitie rom s:
s of fina Purc hase ncia l inve stm ents	(88 7)	(550 )	-
Proc eeds from sale s of finan cial inve stm ents	962	321	2
Proc eeds from sale s of busi nd in tere sts i bsid iarie ness es a n su s	2	-	1
Purc hase s of inta ngib le as sets and oth sets er as	(13)	(11)	(8)
Purc hase s of perty , plan t and ipme nt pro equ	(26 0)	(308 )	(15 5)
Proc eeds from sale s of erty, plan t an d eq uipm ent a nd o ther ets prop ass	7	-	(1)
N et h us ed i n in ting ivit ies fro m ntin uing tio n act cas ves co o p era s	(18 9)	(54 8)	(16 1)
N et h us ed i n in ting act ivit ies fro m dis tinu ed o atio cas ves co n per ns	(33 )	(43 )	(8)
N et h us ed i n in ting act ivit ies cas ves	(22 2)	(59 1)	(16 9)
Cas h flo ws f fina ncin tiviti rom g ac es:
Net chan ge in rela ted p arty finan cial ivab les a nd p ayab les rece	-	-	2
Proc eeds from issu of n nt de bt ance on-c urre	-	2	2
Rep of n nt de bt ents aym on-c urre	(21)	(17)	(13 )
Rep urch of c ertib le su bord inate d bo nds ase onv	(50)	(16)	-
Cha in re stric ted c ash nge	1	(1)	1
Purc hase s of sha own res	(26)	-	-
Proc eeds from the issu of p ut o ptio ns fo n sh ance r ow ares	4	4	-
Divid end ents paym		- -	-
N et h us ed i n fi cing ivit ies fro m ntin uing tio n act cas nan co o p era s	(92 )	(28 )	(8)
N et h pr o vi ded by fina ncin tivi ties fro m d isco ntin ued tio n cas g ac o p era s		- -	-
N et h us ed i n fi cing act ivit ies cas nan	(92 )	(28 )	(8)
Net incre (dec e) in h an d ca sh e quiv alen ts ase reas cas		(340 )	210
Effe f for eign hang e ch h an d ca sh e quiv alen ct o e rat ts exc ange s on cas		-	5
Cas h an d ca sh e quiv alen beg innin g of peri od ts at	822	1,1 62	1,4 52
C as h an d ca sh e quiv alen ts a t en d o f pe rio d	1,00 7	822	1,6 67

Financial Calendar

D t a e * l i i d t p r e m n a r y a e	i L t o c a o n	E t e n v
8 1 7 1 N 2 0 1 1 o v -	l B a r c e o n a	l f M S T M T C t o r g a n a n e y o n e r e n c e
2 2 2 0 N 1 1 o v	3 0 0 0 0 1 1 4 : : - G M T	b Q l W 4 A i t t t t e c a s : r e s u s, u o m o v e
2 9 3 0 2 0 N 1 1 o v -	S d l t t A Z c o s a e ,	C d S h l C f i t i T r e u s s e e c n o o g y o n e r e n c e
* b 0 1 F 2 0 1 2 e		l Q 1 F Y 1 2 R t e s s u
* 8 0 M 2 0 1 2 a r	h M i u n c	l l A G M i t n n u a e n e r a e e n g
* 0 3 2 0 2 M 1 a y		Q 2 2 l F Y 1 R t e s u s
2 8 2 0 1 2 J n u	i h M n u c	( C i l k ) I F X D t M t D p e a y a a a r s a y
* l 3 1 J 2 0 1 2 u		l Q 3 F Y 1 2 R t e s s u
* 1 3 N 2 0 1 2 o v		l Q 4 F Y 1 2 R t e s s u

Institutional Investor Relations Contacts

Ulrich Pelzer

Corporate Vice President, Corporate Development & Investor Relations +49 89 234-26153 ulrich.pelzer@infineon.com

Joachim BinderSenior Director, Investor Relations +49 89 234-25649 joachim.binder@infineon.com

Aleksandar JosicManager, Investor Relations+49 89 234-83045

aleksandar.josic@infineon.com

Holger SchmidtManager, Investor Relations+49 89 234-22332

holger.schmidt@infineon.com

Disclaimer

This presentation was prepared as of 16 November 2011 and is current only as of that date. This presentation includes forward-looking statements and assumptions about the future of Infineon's business and the industry in which we operate. These include statements and assumptions relating to general economic conditions, future developments in the world semiconductor market, our ability to manage our costs and to achieve our growth targets, the resolution of Qimonda's insolvency proceedings and the liabilities we may face as a result of Qimonda's insolvency, the benefits of research and development alliances and activities, our planned levels of future investment, the introduction of new technology at our facilities, our continuing ability to offer commercially viable products, and our expected or projected future results.

These forward-looking statements are subject to a number of uncertainties, such as broader economic developments, including the market environment; trends in demand and prices for semiconductors generally and for our products in particular, as well as for the end-products, such as automobiles, drives, renewable energies and consumer electronics, that incorporate our products; the success of our development efforts, both alone and with partners; the success of our efforts to introduce new production processes at our facilities; the actions of competitors; the continued availability of adequate funds; any mergers, acquisitions or dispositions we may undertake; the outcome of antitrust investigations and litigation matters; and the resolution of Qimonda's insolvency proceedings; as well as the other factors mentioned in this presentation and those disclosed at other occasions.

As a result, Infineon's actual results could differ materially from those contained in or suggested by 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.