Infineon Technologies AG — Investor Presentation 2016

Nov 23, 2016

Fourth Quarter FY 2016 Quarterly Update Infineon Technologies AG Investor Relations

Table of Contents

Infineon at a glance

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Technology leadership and system understanding fosters growth and profitability

1, system and technology leader system leader in automotive Leader in security solutions Competitive advantages Revenue Growth: ~8% Segment Result Margin: ~17% Investment-to-Sales: ~13% (Capex*: ~11%; capital. R&D*: ~2%) Average-cycle financial targets * Infineon reports under IRFS broadest technology portfolio;#1 in SiGe; become #1 in base stations with 5G Auto Power RF Security

Our promise to investors (I): Continued value creation through growth

Earnings-per-share (EPS) growth

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Our promise to investors (II): Continued value creation through growth

Total cash return to shareholders

• › Policy of sustainable dividend payout.
• › Increase of dividend from €0.20 to €0.22*.
• › Payout of €248m*.
• * Proposal to the AGM to be held on 16 Feb 2017.

Infineon increased relative market share in power and outperformed chip card market

Source: Strategy Analytics, April 2016

Source: IHS Markit, October 2016 Source: IHS Markit, July 2016

* including SHHIC (in 2015, SHHIC was acquired by CEC Huada.)

Tight customer relationships are based on system know-how and app understanding

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Infineon benefits from industrial, auto and security, the by far fastest growing segments

CAGR 2015 – 2020 by Semiconductor Industry Segment

Source: IHS Markit, "Worldwide Semiconductor Shipment Forecast", October 2016

* In calendar year 2015

** Source: ABI Research, "Secure Smart Card & Embedded Security IC Technologies", September 2016; microcontroller ICs

Infineon is system leader in automotive; making cars clean, safe and smart

2 with market share gains in power and sensors:

• › #1 in power semiconductors**
• › #2 in sensors**
• › #3 in microcontrollers** (#1 in powertrain***)

Most balanced portfolio with sensors, microcontrollers and power for system approach

Leader in electric drivetrain and CO² reduction - making cars clean

Leader in ADAS - making autonomous driving safe and reliable

Leading product portfolio of sensors and security ICs for individual convenience and connectivity - making cars smart

Focus on sustainable high-bill-of-material areas: powertrain, safety/ADAS/autonomous cars, body

* See glossary; ** Source: Strategy Analytics, April 2016; *** own estimate.

Infineon is ideally positioned to benefit from ADAS*/AD*, xEV, connected cars and to gain further market share in Automotive

For full automotive story please refer to

• a.) Update on ATV Presentation on 02 Aug 2016: www.infineon.com/auto-slides
• b.) ATV Division Call by Peter Schiefer on 11 Oct 2016: www.infineon.com/atv-call

Infineon is system leader with most balanced portfolio in the market

Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2016

Infineon goes beyond radar and camera targeting mass-deployable lidar systems

MEMS-based lidar reference design

• introduced in premium cars within the next couple of years are based on mechanical scanning mirrors which are bulky and less robust
• › In order to enter the car mass market lidar must get rid of mechanical parts
• › MEMS-based lidar systems are
• › more compact
• › more cost-effective
• › more robust

electronica 2016 trade show: Infineon is major semiconductor supplier to Tesla Model X

Infineon components used

• › > 100 high-performance IGBTs
• › IGBT driver ICs
• › CoolMOS™ (HV MOSFETs)
• › PROFETs™, NovalithIC™
• › Radar sensor ICs
• › Security controller

> 200 components* › Radar systems

* fully equipped Model X 90D

Applications Powered by Infineon

• › Main inverters for rear and front motor
• › On-board charger
• › LED lights (headlight, rear lights, indicators)
• › Comfort features (e.g. power seats, mirrors)

ADAS*/AD*, clean cars, and adoption of premium features drive growth

~8% p.a. through-cycle growth

* See glossary

Infineon is #1 and technology leader in power semiconductors

1 in the market*

Broadest product and technology portfolio

Addressing broadest range of applications

300 mm thin-wafer manufacturing for power semiconductors

System leader with digitalization of the control loop and functional integration

Leader in next-generation power semiconductor materials GaN and SiC

Infineon is ideally positioned to gain further market share and earn superior margins in power semiconductors

* Source: IHS Markit, "Power Semiconductor Discretes & Modules Report – 2016", October 2016

As system leader in power, Infineon has broadest application and technology reach

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Infineon further strengthened its market positions

• * The market for IGBT components (\$3,944m) includes discrete IGBTs (\$853m), Standard IGBT modules (\$1,692m), CIB/PIM (\$299m), and IPMs (\$1,101m).
• ** relative market share
• Source: IHS Markit, "Power Semiconductor Discretes & Modules Report", October 2016

Infineon continuously improved relative market share in power

Relative market share* of 3 in the total power semiconductor market

* The relative market share is defined as the proportion of the market share held by the market leader (in all years presented for Infineon) compared to the market share of the second largest competitor in the relevant year.

Source: IHS Markit, several reports from 2004 through 2016

Strong #1 position in power allows driving of key areas of differentiation and innovation

Unique 300 mm thin wafer power semiconductor manufacturing

Compound semiconductors SiC and GaN

Digitalization of the power control loop

Functional integration of IGBT modules

Efficiency and digitalization are main market drivers for power applications

DPM = Digital Power Management

MHA = Major Home Appliances

VSD = Variable Speed Drive

Infineon is the leader in security solutions for the connected world

2 in microcontroller-based smart card ICs*

1 in embedded digital security**

Complete portfolio of hardware, software, services and turn-key solutions

Leading in growth segments payment, government ID, connected car security, IoT, and Information and Communications Technology security

Infineon is ideally positioned to benefit from the growth trends in the security controller market

** Source: IHS Markit, December 2015

CCS is enabling security for the connected world

Source: IHS Markit, Dec 2015, July 2016; * based on units; USD-ranking not provided

Infineon's long-term growth is based on sustainable growth drivers

~8% p.a. through-cycle growth

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Strong growth in ATV due to ADAS and electro-mobility

* The business with XMC industrial microcontrollers developed by ATV and CCS was transferred to PMM and IPC with effect from 1 October 2015. The previous year's figures have been adjusted accordingly.

Guidance for Q1 FY17 and FY17

	Outlook Q1 FY17* (compared to Q4 FY16)	Outlook FY17* (compared to FY16)
Revenue	Decrease of 4% +/- 2%-points	Increase of 6% +/- 2%-points
Segment Result Margin	At the mid-point of the revenue guidance: 14%	At the mid-point of the revenue guidance: 16%
Investments in FY17		€950m** About
D&A in FY17		€830m*** About

• * Based on an assumed average exchange rate of \$1.10 for €1.00.
• ** Including approximately €35m for a new building at Infineon's headquarters in Neubiberg near Munich.
• *** Including D&A on tangible and intangible assets from purchase price allocation of International Rectifier.

Solid Investment Grade rating assigned by S&P in connection with revised capital structure targets

Revised capital structure targets announced by Infineon in February 2016:
a.) Gross Cash	b.) Gross Debt
› "€1bn plus 10% to 20% of revenue"	› "less than 2.0x EBITDA"
	Infineon's revised capital structure targets are reflected in the Corporate Credit Rating of BBB (outlook: "stable") assigned by S&P in February 2016.

› Rating not changed after announcement of planned Wolfspeed acquisition

Infineon has a well balanced maturity profile

Note: Other debt with maturities between 2017 and 2023 totaling €145m.

SG&A still includes noticeable acquisitionrelated costs that are incrementaly declining

• * Target range for SG&A: "Low teens percentage of sales".
• ** Target range for R&D: "Low to mid teens percentage of sales".

Working capital slightly improved due to increasing liabilities

[days]

* For definition please see page 36.

Investments on target of ~13% of sales; D&A about stable in absolute terms

• * For definition please see page 36.
• ** The figure includes approximately €35m for a new building at Infineon's headquarters. Excluding this amount the percentage rate is approximately 13%.

Net cash increased due to Free Cash Flow

• › Free Cash Flow from continuing operations was €169m.
• › Debt decreased by €15m due to repayment of €5m long-term debt and change in FX-rates used for valuing US\$-based debt.

Notes

Investments =

'Purchase of property, plant and equipment'

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

Capital Employed =

'Total assets'

• 'Cash and cash equivalents'
• 'Financial investments'
• 'Assets classified as held for sale'
• ('Total Current liabilities'
• 'Short-term debt and current maturities of long-term debt'
• 'Liabilities classified as held for sale')

RoCE =

NOPAT / Capital Employed =

('Income from continuing operations'

• 'financial income'
• 'financial expense')
• / Capital Employed

DOI (days of inventory; quarter-to-date) =

('Net Inventories' / 'Cost of goods sold') * 90

Working Capital =

• ('Total current assets'
• 'Cash and cash equivalents'
• 'Financial investment'
• 'Assets classified as held for sale')
• ('Total current liabilities'
• 'Short term debt and current maturities of long-term debt'
• 'Liabilities classified as held for sale')

DSO (days sales outstanding; quarter-to-date) = ('Trade receivables' / 'revenue') * 90

Please note:

All positions in ' ' refer to the respective accounting position and therefore should be applied with the positive or negative sign used in the relevant accounting table.

DPO (days payables outstanding; quarter-to-date) =

('Trade payables' / ['Cost of goods sold' + 'Purchase of property, plant and equipment']) * 90

Infineon is a long-standing member of Europe's leading sustainability indices

Infineon's most recent achievements

• › Jan 2016: Infineon is listed in the Sustainability Yearbook for the sixth consecutive year and, according to RobecoSAM, among the top 15% most sustainable companies worldwide.
• › Sep 2016: Infineon is listed in the Dow Jones Sustainability Europe Index for the 7th consecutive year and in the World Index for the 2nd time – both achievements this year as the only European semiconductor company.

› Sep 2016: Infineon is listed in the STOXX® Global ESG Leaders Indices, which serves as an indicator of the quality of Infineon's performance in the governance, social and environmental areas (ESG).

› Infineon was added to the FTSE4Good Index Series in 2001 and has been confirmed as a member since then.

› Jul 2016: Most recent review.

› Dec 2015: In the Carbon Disclosure Project (CDP) climate change report, Infineon achieved a placing among the best companies in the Information Technology sector.

› Oct 2016: Infineon has been selected as a constituent of the Ethibel Sustainability Index (ESI) Excellence Europe.

Financial calendar

Date	Location	Event
29 – 30 Nov 2016	Scottsdale, AZ	Credit Suisse TMT Conference
08 Dec 2016	Pennyhill Park (Surrey, London)	Berenberg European Conference
02 Feb 2017*		Q1 FY17 Results
16 Feb 2017	Munich	Annual General Meeting
27 Feb – 02 Mar 2017	Barcelona	Mobile World Congress
04 May 2017*		Q2 FY17 Results
30 May 2017	Copenhagen	German Corporate Day by Danske Bank Markets
31 May – 01 Jun	New York	Bernstein Strategic Decision Conference
21 – 22 Jun 2017	Berlin	Dt. Bank German, Swiss & Austrian Conference
01 Aug 2017*		Q3 FY17 Results
19 Sep 2017	Munich	Berenberg Bank and Goldman Sachs German Corporate Conference
20 Sep 2017	Munich	Baader Investment Conference
14 Nov 2017*		Q4 FY17 and FY 2017 Results
15 – 16 Nov 2017	Barcelona	Morgan Stanley TMT Conference

* preliminary

Glossary

ACC	adaptive cruise control
AD	automated driving
ADAS	advanced driver assistance system
AEB	automatic emergency braking
BoM	bill of material
EPS	electric power steering
EV	electric vehicle
FCW	forward collision waring
HEV	mild and full hybrid electric vehicle
ICE	internal combustion engine
micro-hybrid	vehicles using start-stop systems and limited recuperation
mild-hybrid	vehicles using start-stop systems, recuperation, DC-DC conversion, e-motor
PHEV	plug-in hybrid electric vehicle
SiC	silicon carbide
SiGe	silicon germanium
V2X	vehicle-to-everything communication
xEV	all degrees of vehicle electrification (EV, HEV, PHEV)

Institutional Investor Relations contacts

Dr. Jürgen Rebel

Corporate Vice President +49 89 234-21626

Investor Relations juergen.rebel@infineon.com

Joachim Binder

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

Holger Schmidt

Manager +49 89 234-22332 Investor Relations holger.schmidt@infineon.com

Tillmann Geneuss

Manager +49 89 234-83346 Investor Relations tillmann.geneuss@infineon.com