Infineon Technologies AG — Investor Presentation 2011

Feb 2, 2011

First Quarter FY 2011 Quarterly Update

Infineon Technologies AG Investor Relations

Infineon Results and Outlook

Business Highlights

Segment Result and Margin Up; Sales Down Due to FX and Seasonalty

Revenue	Net Income*	[EUR m]	Q4 FY10	Q1 FY11
942 922		Revenue	942	922
	390	Segment Result	171	177
	232	Segm. Result Margin	18%	19%
Q4 FY10	Q1 FY11	Net Income*	390	232
		FCF from cont. ops	236	4
		Gross Cash Position	1,727	1,669
		Net Cash	1,331	1,293

* Includes discontinued operations (WLS)

Segment Result Margin Improved Continuously Since Last Year

Copyright © Infineon Technologies 2010. All rights reserved. Page 4

ATV Recorded All-time-high in Revenue; IMM and CCS Down Due to Seasonality, FX

Note: Other Operating Segments and Corporate & Eliminations represent 5% of total revenues (EUR 47m).

Copyright © Infineon Technologies 2010. All rights reserved. Page 5

All-time-high for IMM SR Margin; CCS Stayed With Double-digit SR Margin

Segment Result [EUR m]			Segment Result Margin
		Q4 FY10 Q4 FY10	58 58		17%
ATV		Q1 FY11 Q1 FY11	59 59		17%
		Q4 FY10 Q4 FY10		106 106	24%
IMM IMM		Q1 FY11 Q1 FY11		107 107	25%
CCS CCS		Q4 FY10 Q4 FY10	12 12		10%
		Q1 FY11 Q1 FY11	10 10		10%

Note: Segment result for Other Operating Segments and Corporate & Eliminations: EUR 1m.

01 February 2011

Copyright © Infineon Technologies 2010. All rights reserved. Page 6

OpEx In-line With Target Operating Model

01 February 2011

Higher Investments to Fully Exploit Our Growth Potential

1) For definition please see slide 25 in appendix.

Net Cash on a Continued High Level of About EUR 1.3bn

* Consists of Convertible Bond 2014 (nominal value EUR 168m; book value EUR 133m).

Strong net cash position despite CB 2014 repurchases of EUR 80m cash (nominal EUR 28m) equivalent to 11.8m underlying shares.

Low leverage including in-the-money convertible bond 2014.

01 February 2011

Guidance for FY 2011 Increased; Continuing Strong Operat. Performance

	Outlook Q2 FY11 (compared to Q1 FY11)	Outlook FY 2011 (compared to FY 2010)
Infineon Revenue	Revenue to be up slightly.	Revenue to grow by mid-teens percentage.
Combined Segment Result Margin	Segment Result Margin to be 18 – 20%.	Margin to be a high teens percentage.

Infineon Results and Outlook

Business Highlights

Revenue Split by Division

3-months FY11 revenue split

Infineon Holds #1 Positions in All Target Markets

Source: Strategy Analytics, May 2010

Source: IMS Research,

July 2010

Source: Frost & Sullivan,

October 2010

Automotive Segment (ATV)

Revenue and Segment Result from Q1 FY10 to Q1 FY11

Revenue driven by continued strong global demand, especially in APAC, US and worldwide the premium segment.

• Global car production in 2010 higher then pre-crisis level (2007); also average semiconductor content per car is up.
• Export rate for German car manufacturers at about 75%. (Source: VDA)

Programmable Linear Hall Sensor TLE4998 in Volkswagen Group"s EPS Systems

Target Applications for Electric Drive Train Product Portfolio

Power	Application	Product
100 kW			s
90 kW			T E F s,
80 kW		HybridPACK™ 2	S T O B M G
70 kW	Inverter and generator for full hybrids and		I s, e e t
60 kW	electric vehicles		e d r o c di s
50 kW			di s, T s, B
40 kW		HybridPACK™ 1	T G B I G r
30 kW		Pin-Fin	I o e f di s
20 kW	Inverter and generator for mild HEVs, battery charger	HybridPACK™ 1	C e I r r a e B v
10 kW	Auxiliary drives, aux. DC/DC, charger	Easy Modules	ri D

Easy

Target Applications for Automotive Easy Modules

Overview aux. drives and converters Easy 1B

Easy 2B

Industrial & Multimarket Segment (IMM)

Revenue and Segment Result from Q1 FY10 to Q1 FY11

• Strong demand from high-power drives for industrial applications: VDMA November bookings increased by 43% y-y.
• Strong demand from Chinese renewable energies; mainly wind.
• Seasonality in consumer electronics, computing and communications.

Successful Integration of RF Power into IMM

Morgan Hill, CA, USA

• Morgan Hill is the backend location for RF power products.
• 130 employees.

RF power products

• RF power products are used in mobile phone infrastructure.
• Main customers Ericsson and Huawei.

Mobility: Infineon"s Power Components for Drive Controls for Train Systems

High-speed trains Underground trains

• Power: 5 to 10 MW per train.
• 80 to 120 IGBT modules per train.

• Semiconductor content: ~EUR 100k per train.

• Power: 0.5 to 1 MW per train.

• 25 to 50 IGBT modules per train
• Semiconductor content: ~EUR 10k per train.

Infineon and Goldwind Sign a License Agreement on IGBT Stack Technology

Agreement with Goldwind

• Goldwind gains the license to produce Infineon IGBT stacks used in converters of MW-grade wind turbines.
• Furthermore, Infineon will supply IGBT stacks to Goldwind.
• Having applied the IGBT stacks in its 1.5 MW wind turbines, Goldwind plans to extend it to its 2.5 MW and further to 3.0 MW units.

Infineon IGBT stacks

Chip Card & Security Segment (CCS)

Revenue and Segment Result from Q1 FY10 to Q1 FY11

Seasonal reduction after two consecutive record quarters in Payment business; also more normalized volumes in Government ID business.

Infineon selected as volume supplier for the German national ID card "nPA" with its SLE 78 using Integrity Guard security technology.

Infineon"s SLE 78 Security Controller for the New German National e-ID Card (nPA)

German national electronic ID card

• Project start in Nov 2010.
• Europe"s biggest ID project.
• Currrently, about 60m e-ID card holders in Germany.
• About 6.5m ID cards are issued each year in Germany.
• Infineon is providing a significant share of the total volume.
• The new German national e-ID (nPA) is attracting significant attention ww as it is one of the most advanced approaches regarding security in ID projects.

• ~ 80% of e-ID cards in Europe contain Infineon security µC.

• nPA is the first major project for the 16-bit SLE 78 family.

• SLE 78 is based on "Integrity Guard" security technology.

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"
• "Available-for-sale financial assets"
• "Assets classified as held for disposal")
• ("Total current liabilities"
• "Short term debt and current maturities of long-term debt"
• "Liabilities classified as held for sale")

Net Inventory Reach (days of inventory; quarter-to-date) = ("Net Inventories" / "Cost of goods sold") * 90

DSO (days of sales outstanding; quarter-to-date) = ("Trade accounts receivables (net)" / "Revenue") * 90

DPO (days of payables outstanding; quarter-to-date) = 
("Trade accounts payables" / ["Cost of goods sold" + "Purchase of property, plant and equipment"]) * 90

Infineon Consolidated Statements of Operations (IFRS) (unaudited)

		3 mo nths ended
in Euro millio n	D ec 31, 10	Sep 30, 10	D ec 31, 09
Revenue	922	942	687
Cost of goods sold	(538)	(563)	(446)
Gro ss pro fit	384	379	241
Research and development expenses	(108)	(114)	(89)
Selling, general and administrative expenses	(103)	(103)	(88)
Other operating income	2	7	6
Other operating expense	(6)	(15)	(96)
Operating inco me (lo ss)	169	154	(26)
Financial income	6	5	11
Financial expense	(18)	(16)	(38)
Income from investments accounted for using the equity method	-	1	1
Inco me (lo ss) fro m co ntinuing o peratio ns befo re inco me taxes	157	144	(52)
Income tax benefit (expense)	(8)	49	(7)
Inco me (lo ss) fro m co ntinuing o peratio ns	149	193	(59)
Income from discontinued operations, net of income taxes	83	197	124
N et inco me	232	390	65
Attributable to:
Non-controlling interests	-	-	1
Shareholders of Infineon Technologies AG	232	390	64

Weighted average shares outstanding (in million) – basic	1,087	1,087	1,087
Weighted average shares outstanding – diluted	1,167	1,172	1,087
Basic earnings (loss) per share from continuing operations	0.14	0.18	(0.06)
Basic earnings (loss) per share from discontinued operations	0.07	0.18	0.12
B asic earnings (lo ss) per share	0.21	0.36	0.06
Diluted earnings (loss) per share from continuing operations	0.13	0.16	(0.06)
Diluted earnings (loss) per share from discontinued operations	0.07	0.17	0.12
D iluted earnings (lo ss) per share	0.20	0.33	0.06

Copyright © Infineon Technologies 2010. All rights reserved.

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

in Euro million		Dec 31, 10 Sep 30, 10
Assets
Current assets:
Cash and cash equivalents	1.610	1.667
Available-for-sale financial assets	59	60
Trade and other receivables	685	687
therein: Trade accounts receivables	630	622
Inventories	573	514
Income tax receivable	12	7
Other current financial assets	22	72
Other current assets	109	88
Assets classified as held for sale	567 -	495 -
Total current assets	3.637	3.590
Property, plant and equipment	890	838
Goodw ill and other intangible assets	91	87
Investments accounted for using the equity method	35	35
Deferred tax assets	308	308
Other financial assets	120	119
Other assets	23 -	16 -
Total assets	5.104	4.993

in Euro million		Dec 31, 10 Sep 30, 10
Liabilities and equity
Current liabilities:
Short-term debt and current maturities of long-term debt	129	133
Trade and other payables	716	665
therein: Trade accounts payables	706	659
Current provisions	489	553
Income tax payable	101	111
Other current financial liabilities	12	16
Other current liabilities	154	153
Liabilities classified as held for sale	152	177
Total current liabilities	1.753	1.808
Long-term debt	247	263
Pension plans and similar commitments	154	146
Deferred tax liabilities	10	11
Long-term provisions	54	55
Other financial liabilities	5	6
Other liabilities	73	79
Total liabilities	2.296 -	2.368 -
Shareholders' equity:
Ordinary share capital	2.173	2.173
Additional paid-in capital	6.004	6.048
Accumulated deficit	(5.381)	(5.613)
Other reserves	12	17
Total equity attributable to shareholders of Infineon Technologies AG	2.808	2.625
Non-controlling interests	-	-
Total equity	2.808	2.625
Total liabilities and equity	5.104	4.993

Copyright © Infineon Technologies 2010. All rights reserved.

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

in Euro Million	Dec 31, 10 Sep 30, 10 Dec 31, 09	3 months ended
Net income	232	390	65
Less: net loss from discontinued operations	(83)	(197)	(124)
Adjustments to reconcile net income (loss) to cash provided by (used in)
operating activities:
Depreciation and amortization	83	85	90
Provision for (recovery of) doubtful accounts	-	-	1
Losses (gains) on sales of available-for-sale financial assets	-	-	(2)
Losses (gains) on sales of businesses and interests in subsidiaries Losses in connection w ith the deconsolidation of ALTIS	- -	- (14)	(3) 81
Income from investments accounted for using the equity method	-	(1)	(1)
Dividends received from associated companies	-	4	-
Impairment charges	(2)	-	6
Deferred income taxes	1	(55)	(1)
Changes in operating assets and liabilities:
Trade and other receivables	(9)	6	(15)
Inventories	(50)	(8)	(2)
Other current assets	(20)	34	4
Trade and other payables	44	92	17
Provisions	(52)	114	(4)
Other current liabilities	33	(70)	(19)
Other assets and liabilities	(9)	25	25
Interest received	4	3	1
Interest paid	(10)	(1)	(10)
Income tax received (paid)	(28)	(8)	(8)
Net cash provided by operating activities from continuing operations	134	399	101
Net cash provided by (used in) operating activities from discontinued operations	76	(12)	46
Net cash provided by operating activities	210	387	147
Cash flow s from investing activities:
Proceeds from sales of available-for-sale financial assets	-	2	2
			1
			(88)
			(6)
			(29)
			-
			(120)
			207 87
			(2)
			-
			(10)
			(48)
			-
			(60)
			-
			(60)
			174
			1
			1,414 1,589
Proceeds from sales of businesses and interests in subsidiaries Cash decrease from the deconsolidation of ALTIS Purchases of intangible assets, and other assets Purchases of property, plant and equipment Proceeds from sales of property, plant and equipment, and other assets Net cash used in investing activities from continuing operations Net cash provided by (used in) investing activities from discontinued operations Net cash provided by (used in) investing activities Cash flow s from financing activities: Net change in related party financial receivables and payables Proceeds from issuance of long-term debt Principal repayments of long-term debt Repurchase of convertible subordinated notes Change in restricted cash Net cash used in financing activities from continuing operations Net cash used in financing activities from discontinued operations Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Effect of foreign exchange rate changes on cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	- - (9) (122) 1 (130) (55) (185) - 27 (27) (80) - (80) (4) (84) (59) 2 1,667 1,610	1 - (8) (155) (1) (161) (8) (169) 2 2 (13) - 1 (8) - (8) 210 5 1,452 1,667

Copyright © Infineon Technologies 2010. All rights reserved. 01 February 2011 Page 28

Financial Calendar and IR Contacts

Financial Calendar IR Contacts

• Feb 17, 2011 Annual Shareholder Meeting
• May 03, 2011* Q2 FY11 Results
• June 07, 2011* IFX Day
• Jul 28, 2011* Q3 FY11 Results
• Nov 17, 2011* Q4 FY11 Results

* Preliminary Date

Ulrich Pelzer

Corporate Vice President Corporate Development & Investor Relations

+49 89 234-26153

ulrich.pelzer@infineon.com

Joachim Binder

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

Aleksandar Josic Manager, Investor Relations +49 89 234-83045

aleksandar.josic@infineon.com

Disclaimer

This presentation was prepared as of February 01, 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 sustainability of recent improvements in 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 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 forwardlooking 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.