Infineon Technologies AG — Investor Presentation 2016

Jun 15, 2016

Exane BNP Paribas 18th European CEO Conference Paris, 15 June 2016

Dominik Asam, CFO

Table of Contents

Disclaimer:

This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.

These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.

Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.

Infineon at a glance

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Technology leadership and system understanding fosters growth and profitability

1, system and technology leader in Power System leader in Automotive Leader in Competitive advantages Revenue Growth: ~8% Segment Result Margin: ~15% Investment-to-Sales: ~13% Average-cycle financial targets

(Capex*: ~11%; capital. R&D*: ~2%)

* Infineon reports under IRFS

Security Solutions

Infineon's organic revenue growth (excl. IRF) continuously outperformed total semi market

Revenue Infineon* [lhs]

* Based on Infineon's portfolio (excl. OOS and C&E) per end of 2015 fiscal year. Source: Infineon; WSTS (World Semiconductor Trade Statistics), November 2015

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

EPS growth

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

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Infineon focuses on fastest growing segments: industrial, automotive and security

CAGR 2015 – 2020 by Semiconductor Industry Segment

Source: IHS Inc., Worldwide Semiconductor Shipment Forecast, April 2016

• * In calendar year 2015
• ** CAGR 2015 2019; Source: IHS, "Smart Cards Semiconductors", August 2015

System leadership with most balanced portfolio in the market

Global market shares
		2014	Delta	2015
1	NXP (incl. FSL)	13.3%	+0.9%	14.2%
2	Infineon	10.5%	-0.1%	10.4%
3	Renesas	12.0%	-1.7%	10.3%
4	STMicro	7.8%	-0.1%	7.7%
5	TI	6.1%	+0.9%	7.0%
6	Bosch	6.2%	-0.8%	5.4%

Market shares by product category Power Sensors Microcontroller +0.4%pt +0.4%pt -0.1%pt Others 25.8% Toshiba 3.6% Renesas 5.6% TI 7.4% Bosch 8.6% NXP (incl. FSL) 9.1% ST 14.5% Infineon 25.2% 7.0% Others 35.0% On Semi 4.7% ADI 6.7% Melexis Allegro 7.6% NXP (incl. FSL) 8.9% Infineon 11.9% Bosch 18.1% Others nVidia 9.7% 3.5% Cypress 4.9% Microchip 5.4% TI 8.5% Infineon 8.6% NXP (incl. FSL) 26.6% Renesas 32.7%

Source: Strategy Analytics, Vendor Ranking 2015 April 2016 (for company revenue 2015 & 2014)

Megatrends ADAS/autonomous driving and xEV significantly driving semi content per car

More sensors required for each automation level – sensor "cocoon" in level 4 and 5

Sensor technologies	2015 Euro NCAP*	2018 Euro NCAP*	Level 2	Level 3	Level 4/5
Front looking camera	0.5	1	1	1	1
Front looking radar	0.5	1	1	1	1
Front looking lidar					1
Surround camera					4
Corner radar		2	2	4	4
Surround radar					6
Rear looking camera				1	1
Rear looking radar					1
Driver monitoring Camera				1	1
V2X Sensor					1
Parking Aid	Up to 10-12 ultrasonic sensors per car.
Automated parking	Potential future replacement by RF CMOS radar.

Up to 12 SiGe radars per car (24/77 GHz)

Radar Camera Lidar

* Euro-NCAP is focusing on collision avoidance, requirements are changing over time

Infineon is the market leader in radar, > 15 million chips shipped already

* Source: IHS Inc., "Advanced Driver Assistance Applications Sensor Market Database – H2 2015", February 2016

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Infineon with the most complete ADAS portfolio on the market

 	Infineon Portfolio portfolio / roadmap not addressed	r o s n e S	a g t n a D si r s e o c s o n r e P S	e r r u o c s e s S e & c o e r P f a S	r e w y pl o P p e u S f a S		Radar Courtesy: Bosch	Camera	Driver Monitoring Courtesy: Kostal	Sensor Fusion Courtesy: Audi	Powertrain, Braking, Power Steering
A R E M A C	Driver Monitoring Front Rear	  	  	 	  	› › ›	Real3™ ToF camera – partnership with KOSTAL AURIX™ 32-bit µC for single function camera processing AURIX™ 32-bit µC for "safe & secure hub", full flexibility for OEM SW integration – up to ASIL D
R A D A R	77GHz 24 GHz RF CMOS	 	  	 › market leader in radar with most complete product portfolio: 24 GHz (in prod.), 77 GHz (in prod.), RF CMOS (cooperation with  › >15 million chips shipped already › AURIX™ 32-bit µC 				IMEC on 79 GHz)
LIDAR			tbd.			›	AURIX™ 32-bit µC
SENSOR FUSION		n.a.				›		AURIX™ 32-bit µC as	ADAS reference for	safety computing	platform
ACTUATORS			n.a.			› ›	market up	leader in powertrain to 30% higher	and electric BOM content on fail	power steering safe/operational systems

EV/HEV: Infineon is well positioned globally to benefit over-proportionally from xEV boom

Infineon continuously strengthened #1 position in power semiconductors

Development of Infineon's market share and relative market share* 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.
• ** Including International Rectifier.

Source: IHS Inc., several reports from 2004 through 2015

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

Unique 300 mm thin wafer power semiconductor manufacturing Compound semiconductors GaN and SiC

• › frontend production cost per unit 20-30% cheaper than on 200 mm
• › capital intensity is 30% lower than on 200 mm

• › 300 mm is planned to reach cost cross-over versus 200 mm by end of 2017

• › compound semiconductors allow faster switching and reduced losses versus silicon leading to smaller footprint and lower system cost

• › #1 in SiC diodes since 2001
• › SiC MOSFET sampling soon
• › strongest IP portfolio and know-how in GaN

Digitalization of the power control loop

• › digitalization of control loop of MOSFET-based AC-DC and DC-DC converters
• › complete offering of power IC, driver, MOSFET and optimized packages
• Wie besprochen › appropriate solutions based on load and efficiency requirements:
• ergänzen – AC-DC: charger, LED power supply
• DC-DC: server, datacom, base stations, games consoles, graphics boards

Functional integration of IGBT modules

• › paradigm shift: integration of add. components in IGBT modules: sensors, µC, security ICs, I/Os
• › leads to new functionalities impossible with externally attached components: remote maintenance, early identification of failure, authentication of original parts
• › launch of new intelligent power module MIPAQ™ Pro at 2015 PCIM tradeshow

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

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Efficiency and digitalization are main market drivers for power applications

MHA = Major Home Appliances VSD = Variable Speed Drive

Sensors drive multimarket segment in PMM: 60 GHz radar transceiver for gesture sensing

* See YouTube: https://www.youtube.com/watch?v=8LO59eN9om4

CCS to grow faster than the market as leader in security solutions with broadest portfolio

High-end Mobile Communications

Smart Card ICs total market in 2014: \$2.63bn

Microcontroller-based smart card ICs. Source: IHS Inc., July 2015

Infineon holds leading positions in all relevant security markets

Source: IHS Inc., May, July, Dec 2015 * based on units; USD-ranking not provided

Identification Payment

• › Transition to chip-based payment cards in China and the US led to revenue jump
• › Growth of mobile payment

• › Infineon is very well positioned in contact based payment cards in US

• › Adoption of electronic governmental documents (national ID cards, passports, health cards, etc.)

• › Emergence of multiapplication cards
• › 150 succesful ID projects, 75% of national eID projects in Europe

IoT Security Government

• › Rise of smart homes, connected cars, automated industries etc.
• › Increasing need for IT security
• › Growth of M2M communication
• › Authentication

• › CCS cooperates closely with other Infineon segments

• › Greater adoption of NFC technologies for mobile payment and other applications

• › In addition to SIM cards Infineon offers secure elements embedded in phones and in Micro SD cards

Most recent design-wins underline Infineon's #1 position* in embedded digital security

Most recent design-wins for OPTIGA™ family products

Courtesy: Lenovo

Courtesy: Microsoft

Courtesy: Google

• › notebooks, e.g. Lenovo ThinkPad
• › USB memory cable
• › server
• › tablets, e.g. Microsoft Surface Pro 4
• › 3D glasses
• › IT management platform, e.g. Huawei
• › motorcycle controller
• › arcade gaming machines
• › smart home hub, e.g. Google OnHub

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

~8% p.a. through-cycle growth

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Infineon's value proposition

• › Creation of shareholder value is a key target for Infineon (key metric: RoCE)
• › Infineon outgrew the market organically in the past 16 years
• › Infineon holds leading positions in all of its target markets
• › Technology leadership, system understanding and innovation continue to foster growth and profitability
• › Infineon is excellently positioned in the top growth applications of today: ADAS, electro-mobility, electric energy conversion, embedded security for IoT
• › Infineon is more than 2.5 times bigger than the next competitor in power semiconductors which allows for parallel investments in key initiatives
• › Infineon has a strong balance sheet and a balanced debt profile
• › Infineon holds investment grade rating "BBB" (outlook: stable) by S&P since February 2016