Third Quarter FY 2019 Quarterly Update

Infineon Technologies AG Investor Relations

Agenda

1	Infineon at a glance
2	Quarterly highlights
3	Automotive
4	Industrial Power Control
5	Power Management & Multimarket
6	Digital Security Solutions
7	Selected financial figures

Infineon at a glance: strong financials, leading market positions

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

Our strategy is targeted at value creation through sustainable organic growth

Focus		Technology leadership			System understanding
› Focus on fastest growing segments of semi market › Tackle global megatrends		› Leverage core competencies in different end markets to maximize ROI		›	Create value for customers through system under standing

Auto		Power	RF & Sensors		Security
System leader in automotive	#1; system and technology leader		Broad RF and sensor technology portfolio		#1 in Security Solutions

Target operating model: average-cycle targets

Revenue growth 9%	Segment Result margin 17%+	Investment-to-sales 15%
	Continued value creation for shareholders

FY18 revenue of €7,599m by target application

Tight customer relationships, based on system knowhow and application understanding

Infineon holds a leading position in its target markets

Automotive semiconductors

total market in 2018: \$37.7bn

Source: Strategy Analytics, "2018 Automotive Semiconductor Vendor Share", April 2019

Power discretes and modules

total market in 2017: \$18.5bn

Source: Based on or includes content supplied by IHS Markit, Technology Group, "Power Semiconductor Market Share Database 2017", September 2018

Security ICs

total market in 2017: \$3.3bn

Source: ABI Research, "Smart card & secure ICs", October 2018

	Outlook Q4 FY19* (compared to Q3 FY19)	Outlook FY19*
Revenue	Increase of 1% +/- 2%-points	€8.0bn
Segment At the mid-point of the revenue guidance: Result ~14.5% Margin		~16%
	Investments in FY19	~€1.5bn
	D&A in FY19	~€1.0bn**

* Based on an assumed average exchange rate of \$1.15 for €1.00
** Including D&A on tangible and intangible assets from purchase price allocation of about €90m

Agenda

1	Infineon at a glance
2	Quarterly highlights
3	Automotive
4	Industrial Power Control
5	Power Management & Multimarket
6	Digital Security Solutions
7	Selected financial figures

Hyundai has chosen Infineon's CoolSiC products for their next generation EVs

CoolSiC™: Success at Hyundai

General CoolSiC™ value contribution to customers

Higher mileage with the same battery capacity

› Trench based SiC devices increase power efficiency compared to alternative technologies

Easy scalability from IGBT to SiC based inverters

› HybridPACK™ CoolSiC™power modules and EiceDRIVER™ high voltage drivers allow upgrade from IGBT to SiC in the same footprint

Additional value for Infineon's customers

Unique automotive quality and reliability levels
High volume production track record of dedicated electro-mobility products

Infineon is new partner in Volkswagen's strategic supplier network FAST

› FAST (Future Automotive Supply Tracks) was established in 2015
› Today, FAST includes 66 partners
› FAST intensifies cooperation of VW with its most important suppliers and partners in central areas of innovation
› Appreciation of Infineon's competence in electro-mobility and its contribution to the VW modular electric drive platform (MEB), (e.g. power semiconductors, modules)

Automotive

Infineon's position in the automotive semiconductor universe

Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2019

Electro-mobility

xEV growth driven by emission regulation; EU about to force CO2 reduction to -37.5% by 2030 vs 2021

CO2 emission development and regulations for main regions

* Japan has already met its 2020 statutory target as of 2013 Source: ICCT (www.theicct.org), April 2018

The incremental demand of power semi-conductors is a significant opportunity

2018 average xEV semiconductor content by degree of electrification

* "power" includes linear and ASIC; "others" include opto, small signal discrete, memory

Automated Driving

For Automated Driving more compute power but also a higher security and safety is needed

Increased sensor requirements drive the content in the next 5 years and beyond

		More sensors required for any next level of automation
	NCAP 5 Star, AD L2	AD L3	AD L4/L5
	Automatic emergency brake/ forward collision warning
Application*	Parking assist		Valet parking
	Lane keep assist	Highway assist	Highway and urban chauffeur
Radar # of modules**	Corner MRR/LRR ≥ 3	MRR/LRR	Imaging ≥ 10 ≥ 6
	New: Corner starting 2020	Corner	Surround
Camera # of modules**	≥ 1		≥ 4 ≥ 8
Lidar # of modules**	0	≤	1 ≥ 1
Others	› Ultrasonic	› Ultrasonic › Interior camera	› Ultrasonic › Interior camera › V2X

* Source: VDA (German Association of the Automotive Industry); Society of Automotive Engineers

** Market assumption

Average semi content per car by level of automation at the given years

Infineon's Power Strategy

Infineon's portfolio covers the entire range of power and frequency

Infineon's discrete power portfolio* is basically separated by voltage classes

* excluding drivers and control ICs

Three strategic levers to outgrow the power semi market: "core – adjacent – new"

Broaden scope to new applications

› System understanding and strong R&D force allow us to enter emerging power applications

Four key success factors: Infineon well positioned to defend its leadership in power semis also in SiC

Industrial Power Control

Clear leader in discrete IGBTs and IGBT modules; IPMs improved from #4 to #3

* Including standard (non-integrated) IGBT modules and power integrated modules (PIMs) / converter inverter brake (CIB) modules.

** On 29 May 2018, Microchip closed the acquisition of Microsemi. The 2017 revenue depicted here was contributed entirely by Microsemi.

Source: Based on or includes content supplied by IHS Markit, Technology Group, "Power Semiconductor Market Share Database 2017", September 2018.

Due to the extensive power module portfolio Infineon can address the whole range of drives applications

*Low-power drives include compact drives, standard drives, premium drives and brushed DC drives.

Infineon is a key player in the PV market providing solutions to the leading inverter manufacturers

* Infineon is serving the top-10 but not necessarily as a sole supplier.

1) based on or includes content supplied by IHS Markit, Technology Group, "PV Installations Tracker – Q1 2019"; March 2019; including off-grid 2) by shipped capacity in MW: based on or includes content supplied by IHS Markit, Technology Group, "PV Inverter Market Tracker – Q4 2018"; December 2018

Infineon is the leading power semiconductor supplier for the wind turbine industry

* Infineon is serving the top-10 but not necessarily as a sole supplier.

1) Wood Mackenzie Power & Renewables, "Market Outlook Update", March 2019

2) by shipped capacity in MW: Wood Mackenzie, Power & Renewables, "Historic wind turbine OEM market share", March 2019

What comes next? Mid- to long-term structural growth opportunities

collaborative robots eAviation

eDelivery vehicles

fuel cell

eMarine

Power Management & Multimarket

PMM's growth is built on many applications from different sectors in power and non-power

PMM – Power

Infineon is the clear leader in MOSFETs; growth potential in power ICs

Discrete Power MOSFET market

total market in 2017: \$6.65bn

Power IC market

total market in 2017: \$23.6bn

* On 29 May 2018, Microchip closed the acquisition of Microsemi. The 2017 revenue depicted here was contributed entirely by Microsemi. Source: Based on or includes content supplied by IHS Markit, Technology Group, "Power Semiconductor Market Share Database 2017", September 2018. Discrete Power MOSFET market incl. automotive MOSFETs. Power IC market incl. automotive power ICs.

Technology leadership in MOSFETs and digital power: highest efficiency and power density

Power management solutions reduce TCO

More efficient semiconductors

› lower power consumption
› lower opex

Higher power-density

› more compact system designs
› lower capex

Four interrelated trends drive power semiconductor BoM in battery-powered applications

In total battery-powered applications are a significant growth driver for PMM's power business

Transition from 3G/4G to 5G drives demand in power semis for antennas and power supplies

› driver #1: massive growth of data and computing power
› driver #2: higher number of base stations due to denser network
› driver #3: ~4x higher power semiconductor content per radio board: from ~\$25 for MIMO antenna to ~\$100 for massive MIMO antenna array
› driver #4: fog computing data center as a completely new market

What comes next? Mid- to long-term structural growth opportunities

5G infrastructure

hyperscale AI data center

on-board charger

wireless charging

Core Adjacent New area

collaborative robots

smart speaker

new material power tools class D audio

PMM – RF and Sensing

RF and Sensing devices enable new services and will shape the way we live and work

Various use cases are enabled by a small set of versatile core technologies

Augmented Reality Voice-controlled devices Gesture control

Commercial and consumer multicopters

Industrial robotics

We focus on MEMS sensors and target to become the leader in 3D sensing and radar

Key Use Cases – Examples
Voice authentication	Advanced fitness tracking	Smog alarm	Gesture sensing	3D AR gaming
Face recognition & biometric identification
Human Machine Interface

Digital Security Solutions

Continuous stream of new topics aging and exiting

Source: Infineon

Infineon first to offer automotive-qualified TPM for the connected car; Volkswagen among first customers

› OPTIGA™ TPM 2.0 (Trusted Platform Module) is especially for use in
- › central gateway
- › telematics unit (e.g. secure software updates over-the-air)
- › infotainment system
› Volkswagen decided to deploy OPTIGA™ TPM 2.0 as security solution for the connected car
› Several design-ins with a number of car manufacturers already achieved

› The automotive-qualified OPTIGA™ TPM 2.0 is designed for the long product life cycles of cars as its firmware can be updated remotely with respect to state-ofthe-art security needs
› OPTIGA™ TPM 2.0 and the AURIX™ family of microcontrollers are part of the Infineon portfolio of application-specific security solutions in automotive

Agenda

1	Infineon at a glance
2	Target operating model (TOM)
3	Quarterly highlights
4	Automotive
5	Industrial Power Control
6	Power Management & Multimarket
7	Digital Security Solutions
8	Selected financial figures

Revenue growth + 4% y-y

Revenue development

- › Slight increases in revenue for all four segments
› Segment Result down -5% q-q
- › Underutilization charges burden gross margin and segment result
- › Cost containment measures are implemented
- › Balancing cycle management while enabling sustainable growth

Q3 FY19 Division Performance

› Q3 FY19: Revenue growth driven by higher demand for electric drivetrain products and driver assistance systems
› Q3 FY19: Wind and solar remain growth drivers, home appliances weaker than normally expected by seasonality, industrial power supplies flat
Segment Result Margin in % › Q3 FY19: Markets for most of our business lines are stabilizing on current weak levels.

Q2 Q3

FY19

25.1 22.3

+3%

› Q3 FY19: Quarterly growth driven by strong demand for payment solutions and Trusted Platform Modules.

Organic RoCE as the key value metric typically amounts to ~2x WACC

RoCE and adjusted RoCE

Development of earnings-per-share (EPS) from continuing operations [EUR cent]

Total cash return to shareholders

› Policy of sustainable dividend payout
› Increase of dividend from €0.25 to €0.27
› Payment of €305m on 26 Feb 2019

Opex within target range

Selling, General & Administration Research & Development* [EUR m]

210 ²²⁷ ²¹⁸ ²¹² ²¹⁴ ²¹⁸ ²²³ ²³⁶ ²³⁶ ²⁴³ 10.8% 11.1% 11.1% 10.7% 10.6% 11.2% 10.9% 12.0% 11.9% 12.1% Q3 FY18 Q4 Q1 FY19 Q2 Q3 Q3 FY18 Q4 Q1 FY19 Q2 Q3 General & Administration Selling R&D % of sales [rhs]

* In FY18, reported R&D expenses amounted to €836m, net of €86m of grants received and net of €143m of capitalized development costs.

Inventories main driver for Working Capital increase

Working capital* Inventories [EUR m] 991 712 979 1,452 1,475 Q3 FY18 Q4 Q1 FY19 Q2 Q3

Trade receivables Trade payables

[EUR m]

* For definition please see page "Notes".

Investments and D&A trending up due to growth

Investments* Depreciation & Amortization

* For definition please see page "Notes".

Healthy gross cash and net cash position

Liquidity development

[EUR m]

› Operating cash flow from continuing operations was €396m in Q3 FY 2019
› Free Cash Flow from continuing operations was €63m

^* Includes the proceeds of €1.5 billion resulting from the capital increase executed on 18 June 2019 in connection with the planned acquisition of Cypress

Infineon has a balanced maturity profile and a solid investment grade rating (BBB)* from S&P

Maturity profile

[EUR m; US\$ m; nominal values]

Note: Additional debt with maturities between 2019 and 2023 totaling €43m of which €18m repayments related to Campeon.

*On 3 June 2019 S&P placed Infineon on CreditWatch in relation to the Cypress acquisition

Glossary (1 of 2)

AC	alternating current
AC-DC	alternating current - direct current
AD	automated driving
ADAS	advanced driver assistance system
AEB	automatic emergency braking
AI	artificial intelligence
AR	augmented reality
BEV	battery electric vehicle
BGA	ball grid array
BoM	bill of material
CPU	central processing unit
DC	direct current
DC-DC	direct current - direct current
DPM	digital power management
eCall	emergency call
ECU	electronic control unit

EPS	electric power steering
eSIM	embedded subscriber identity module
eSIM	embedded SIM
EV	electric vehicle
FPGA	field programmable gate array
GPU	graphics processing unit
HEV	mild and full hybrid electric vehicle
HMI	human machine interaction
HSM	hardware security module
HST	high-speed train
HW	hardware
ICE	internal combustion engine
INV	in-vehicle networking

Glossary (2 of 2)

IPM	intelligent power module
iPol	image processing line
IRF	International Rectifier
LSEV	low-speed electric vehicle
LSPS	LS Power Semitech Co. Ltd.
µC	microcontroller
MEMS	micro electro-mechanical systems
MHA	major home appliances
MIMO	multiple input, multiple output
micro hybrid	vehicles using start-stop systems and limited recuperation
mild hybrid	vehicles using start-stop systems, recuperation, DC-DC conversion, e-motor
MOSFET	metal-oxide silicon field-effect transistor
OBC	on-board charger
OEM	original equipment manufacturer
PHEV	plug-in hybrid electric vehicle
Pol	point-of-load

PV	photovoltaic
RF	radio frequency
rhs	right-hand scale
Si	silicon
SiC	silicon carbide
SiGe	silicon germanium
SMPS	switch-mode power supply
SOTA	software over-the-air
SW	software
ToF	time-of-flight
TPM	trusted platform module
UPS	uninterruptible power supply
V2X	vehicle-to-everything communication
VR	virtual reality
VSD	variable speed drive
xEV	all degrees of vehicle electrification (EV, HEV, PHEV)

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.

Specific disclaimer for IHS Markit reports, data and information referenced in this document

The IHS Markit reports, data and information referenced herein (the "IHS Markit Materials") are the copyrighted property of IHS Markit Ltd. and its subsidiaries ("IHS Markit") and represent data, research, opinions or viewpoints published by IHS Markit, and are not representations of fact. The IHS Markit Materials speak as of the original publication date thereof and not as of the date of this document. The information and opinions expressed in the IHS Markit Materials are subject to change without notice and neither IHS Markit nor, as a consequence, Infineon have a duty or responsibility to update the IHS Markit Materials or this presentation. Moreover, while the IHS Markit Materials reproduced herein are from sources considered reliable, the accuracy and completeness thereof are not warranted, nor are the opinions and analyses which are based upon it. IHS Markit and the trademarks used in the data, if any, are trademarks of IHS Markit. Other trademarks appearing in the IHS Markit Materials are the property of IHS Markit or their respective owners.

Financial calendar

Date	Location	Event
29 Aug 2019	Frankfurt	Commerzbank Sector Conference
4 – 5 Sep 2019	New York	Citi Global Technology Conference
6 Sep 2019	London	Deutsche Bank European TMT Conference
23 Sep 2019	Unterschleißheim (nearby Munich)	Berenberg Goldman Sachs German Corporate Conference
24 Sep 2019	Munich	Baader Investment Conference
7 Oct 2019		ATV Call by Peter Schiefer, Division President ATV
12 Nov 2019*		Q4 FY19 Results
13 – 14 Nov 2019	Barcelona	Morgan Stanley TMT Conference
5 Feb 2020*		Q1 FY20 Results
20 Feb 2020*	Munich	Annual General Meeting
5 May 2020*		Q2 FY20 Results

* preliminary

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
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')

DOI (days of inventory; quarter-to-date) = ('Net Inventories' / 'Cost of goods sold') * 90

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

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.

Institutional Investor Relations contacts

Alexander Foltin

Corporate Vice President Finance, Treasury & Investor Relations

+49 89 234-23766 [email protected]

Joachim Binder

Senior Director Investor Relations +49 89 234-25649 [email protected]

Isabell Diel

Manager Investor Relations

+49 89 234-38297 [email protected]

Alexander Groschke

Senior Manager Investor Relations

+49 89 234-38348 [email protected]

Holger Schmidt

Senior Manager Investor Relations

+49 89 234-22332 [email protected]

AI Terminal

Infineon Technologies AG

222_ip_2019-08-01_e3ed927b-3ce7-407d-81c0-abf89ea93b55.pdf

Third Quarter FY 2019 Quarterly Update

Agenda

Infineon at a glance: strong financials, leading market positions

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

Our strategy is targeted at value creation through sustainable organic growth

FY18 revenue of €7,599m by target application

Infineon holds a leading position in its target markets

Automotive semiconductors

Power discretes and modules

Security ICs

Agenda

Hyundai has chosen Infineon's CoolSiC products for their next generation EVs

General CoolSiC™ value contribution to customers

Higher mileage with the same battery capacity

Easy scalability from IGBT to SiC based inverters

Additional value for Infineon's customers

Infineon is new partner in Volkswagen's strategic supplier network FAST

Automotive

Infineon's position in the automotive semiconductor universe

Electro-mobility

xEV growth driven by emission regulation; EU about to force CO2 reduction to -37.5% by 2030 vs 2021

CO2 emission development and regulations for main regions

The incremental demand of power semi-conductors is a significant opportunity

2018 average xEV semiconductor content by degree of electrification

Automated Driving

Increased sensor requirements drive the content in the next 5 years and beyond

Average semi content per car by level of automation at the given years

Infineon's Power Strategy

Infineon's portfolio covers the entire range of power and frequency

Infineon's discrete power portfolio* is basically separated by voltage classes

Three strategic levers to outgrow the power semi market: "core – adjacent – new"

Broaden scope to new applications

Industrial Power Control

Clear leader in discrete IGBTs and IGBT modules; IPMs improved from #4 to #3

Due to the extensive power module portfolio Infineon can address the whole range of drives applications

Infineon is a key player in the PV market providing solutions to the leading inverter manufacturers

Infineon is the leading power semiconductor supplier for the wind turbine industry

What comes next? Mid- to long-term structural growth opportunities

Power Management & Multimarket

PMM's growth is built on many applications from different sectors in power and non-power

PMM – Power

Infineon is the clear leader in MOSFETs; growth potential in power ICs

Discrete Power MOSFET market

Power IC market

Technology leadership in MOSFETs and digital power: highest efficiency and power density

Power management solutions reduce TCO

More efficient semiconductors

Higher power-density

Four interrelated trends drive power semiconductor BoM in battery-powered applications

Transition from 3G/4G to 5G drives demand in power semis for antennas and power supplies

What comes next? Mid- to long-term structural growth opportunities

PMM – RF and Sensing

RF and Sensing devices enable new services and will shape the way we live and work

Various use cases are enabled by a small set of versatile core technologies

We focus on MEMS sensors and target to become the leader in 3D sensing and radar

Digital Security Solutions

Continuous stream of new topics aging and exiting

Infineon first to offer automotive-qualified TPM for the connected car; Volkswagen among first customers

Agenda

Revenue growth + 4% y-y

Revenue development

Q3 FY19 Division Performance

Organic RoCE as the key value metric typically amounts to ~2x WACC

RoCE and adjusted RoCE

Development of earnings-per-share (EPS) from continuing operations [EUR cent]

Total cash return to shareholders

Opex within target range

Selling, General & Administration Research & Development* [EUR m]

Inventories main driver for Working Capital increase

Trade receivables Trade payables

Investments and D&A trending up due to growth

Healthy gross cash and net cash position

Liquidity development

Infineon has a balanced maturity profile and a solid investment grade rating (BBB)* from S&P

Maturity profile

Glossary (1 of 2)

Glossary (2 of 2)