London Roadshow hosted by Liberum Capital 18 – 19 November 2013 Ulrich Pelzer Corporate Vice President Finance, Treasury & Investor Relations Table of Contents Infineon Group Update PMM Presentation by Andreas Urschitz 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. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 2 Revenue Split by Division Q4 FY 2013 revenue: EUR 1,053m ATV € 455m CCS € 129m IPC € 197m PMM € 271m OOS+C&E* € 1m * Other Operating Segments; Corporate and Eliminations. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 3 Tight Customer Relationships are Based on System Know-how and App Understanding ATV PMM IPC CCS Distributors 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 4 Infineon Holds Top Positions in All Target Markets Automotive Power Chip Card #2 #1 #1 Renesas Infineon STMicro Freescale NXP 14% 9% 8% 7% 6% 12% Infineon Infineon 24.1% 23.8% Toshiba 7% NXP Mitshubishi 7% Samsung STMicro 6% STMicro Fairchild 6% SHHIC 22% 17% 6% Automotive semiconductors in calendar year 2012. Power semiconductors and modules in calendar year 2012. Microcontroller-based smart card ICs in calendar year 2012. Source: Strategy Analytics, April 2013. Source: IHS, September 2013. Source: IHS, September 2013. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 5 Expected Growth Broadly In Line With Historical Averages ATV IPC PMM CCS >10% p.a. >10% p.a. ~5% p.a. Courtesy: Daimler AG ~7% p.a. Infineon: ~ 8% p.a. Sources: IHS, Strategy Analytics, ABI Research, Infineon. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 6 New Strategic Approach: „Product to System“ Benefit for the customer System Efficiency system-centric System improvement application-centric System-in-Package or System-on-Chip component-centric Component 2013-11-18 time Copyright © Infineon Technologies AG 2013. All rights reserved. Page 7 Segment Result Margin in FY13: 9.8%; Remained Profitable Even in Q1 FY13 Revenue and Segment Result [EUR m] FY 2013 revenue split by product category +7% 982 851 12% 5% 1.022 1.053 11% 14% 918 7% Power 116 Q4 FY12 44 68 Q1 Q2 Revenue 2013-11-18 117 148 Q3 Q4 FY13 Segment Result eControl RF others Segment Result Margin Copyright © Infineon Technologies AG 2013. All rights reserved. Page 8 Guidance for Q1 FY14 and FY 2014 Outlook Q1 FY14 Outlook FY 2014 (compared to FY 2013) Revenue Between €960m and €1bn. Increase between 7% and 11%. Segment Result Margin Between 8% and 10%. Between 11% and 14%. Investments in FY 2014 About €650m. D&A in FY 2014 €500m or slightly above. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 9 Investor and Analyst Presentation 18 November 2013 Andreas Urschitz Division President Power Management & Multimarket (PMM) Table of Contents PMM Segment Overview Growth Driver: Power Management Growth Driver: Mobile Devices Summary 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 11 Power Management & Multimarket (PMM) Financial Snapshot Revenue and Segment Result development [EUR m] FY11 : 1,003 300 FY12 : 929 -7% FY13 : 986 +6% 30% 25% 242 268 256 55 54 69 64 0 Q1 FY11 Q2 Q3 Q4 222 227 Q1 FY11 237 Q1 FY11 Q1 FY10 100 20% Q1 FY09 200 233 15% 222 247 227 266 271 10% 5% 40 32 33 37 22 27 46 49 Q1 FY12 Q2 Q3 Q4 Q1 FY13 Q2 Q3 Q4 PMM revenue PMM SR 0% SR margin Revenue rebound in FY13 due to end of inventory correction and strong sales of products used in mobile devices. Margin compression driven by cost of investment in capacity and higher OpEx. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 12 Top Customers and Distributors and Revenue Split By Region Major customers Revenue split by region* 19% 7% 74% Major distributors EMEA Americas APAC (incl. Japan) * Based on revenues by fulfillment region for FY 2013. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 13 PMM’s Broad Product Portfolio Covers a Diverse Range of Applications Revenue split* by application Mobile devices Power management Mobile infrastructure * Based on revenues from FY13. Portfolio: MOSFETs, Power ICs, RF switches, LNAs, Si-Mics, TVS diodes, RF power 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 14 PMM Holds Leading Positions in Its Main Product Segments Competitive ranking and market share development Standard Power MOSFETs 1. 2. 3. 4. 5. Int’l Rect. Infineon Toshiba Fairchild STM 12.8% 12.7% 11% 10% 9% Silicon Microphones 1. 2. 3. 4. 5. Knowles Infineon ADI Omron Bosch RF Power 58% 31% 5% 3% 1% 1. 2. 3. 4. 5. Freescale NXP Infineon SEDI1) Cree 31% 9% 11% 13% 50% 23% 16% 7% 3% 16% 16% 2010 2012 11% 10% 2% 2008 2010 2012 Source: IHS, “Power Semiconductor Discretes & Modules – 2013”, Sept 2013. 2013-11-18 2008 2010 2012 Source: IHS, “MEMS Microphones go Mainstream”, 2012. 2007 Source: ABI Research, “RF Power Amplifiers“, 2012. 1) Sumitomo Electric Device Innovations Copyright © Infineon Technologies AG 2013. All rights reserved. Page 15 Table of Contents PMM Segment Overview Growth Driver: Power Management Growth Driver: Mobile Devices Summary 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 16 Despite Dip in 2012, Long-Term Market Outlook Is Healthy, Especially for AC/DC Power management market forecast by application [USD bn] CAGR(12-16) = 3.7% 2010 2011 2012 2013 DC/DC 2014 2015 2016 7.8 25.0 7.3 23.3 6.8 23.1 6.2 21.7 5.5 20.3 5.2 20.2 5.6 5.3 22.1 22.2 CAGR(12-16) = 8.6% 2017 AC/DC Source: IHS: “Power Management Market Tracker – Q3 2013 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 17 Power Management Shifting From Components to Smart System Solutions Evolution of power management requirements Components Smart system solution Focus on cost/performance Focus on smart system solutions Customers focus on performance of individual components and component standardization to reduce costs. Customers focus on total cost of ownership, flexibility of system architecture and time to market. Supplier balances cost/performance through chip shrink and package innovation. Supplier offers smart system solutions by optimizing combination of IC and switch. Analog control Analog controllers offer sufficient performance at attractive prices, but without programmability. 2013-11-18 Digital control Programmable digital controllers enable differentiation, better performance and faster development cycles. Copyright © Infineon Technologies AG 2013. All rights reserved. Page 18 DC/DC Example Shows That Smart System Solution Drives Higher Content 2x* Future Infineon’s differentiation Smart system solution Present 2x* Digital controller Component-based system Integrated Driver + MOSFETs Digital controller Past Drivers Components MOSFETs MOSFETs time * Estimated increase in Infineon-addressable BOM value for typical system. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 19 Smart System Solution Drives Higher Content Also In AC/DC Efficiency ratings for power supplies according to “80 PLUS” Initiative Content required to meet “80 PLUS” efficiency ratings Efficiency BOM value* Up to 40% higher than bronze 98% Titanium 94% Digital controller CoolMOS™ Analog controller CoolMOS™ 90% Gold 86% 82% Silver Bronze 78% 0% 50% Load 100% Source: 80 PLUS program. www.plugloadsolutions.com Data points represent actual efficiency requirements as defined by the 80 PLUS program. Curves are for illustrative purposes only. 2013-11-18 Analog controller Standard HV-MOSFET * Estimated increase in Infineon-addressable BOM value for typical system Copyright © Infineon Technologies AG 2013. All rights reserved. Page 20 DrBlade: Innovative Packaging Enables Higher Levels of System Integration DrBlade: the revolutionary chip-embedding technology Design-wins for DrBlade, in combination with our digital power management ICs. Based on Infineon’s outstanding manufacturing technology: thin wafer, galvanic electroplating, laser-drilling, die-attach by diffusion-soldering. Bottom view Top view System view ©Infineon Technologies AG ©Infineon Technologies AG computer tomography Target applications: DC/DC voltage regulation for computing and telecom. Contains driver IC and OptiMOS™ MOSFET half-bridge. Small package size, low profile (0.6 mm), high power density, RoHS1) 2016 compliant. 1) RoHS = Restriction of Hazardous Substances. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 21 Table of Contents PMM Segment Overview Growth Driver: Power Management Growth Driver: Mobile Devices Summary 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 22 Our Business With RF Components, Si-Mics and Power Semis Fueled by Mobile Devices Smartphones Tablets* [units m] [units m] CAGR(12-16) = 18.4% 1400 CAGR(12-16) = 34.9% 500 1375 1275 1200 400 1150 1000 1000 331 300 800 600 398 263 700 200 184 400 100 200 0 0 2012 2013 2014 2015 2012 2016 Source: Strategy Analytics: “Global Smartphone Sales Forecast for 88 Countries: 2007 to 2017”, September 2013. 2013-11-18 120 2013 2014 2015 2016 The chart was created by Infineon based on Gartner research. Source: Gartner: “Forecast: Desk-based PCs, Notebooks, Ultramobiles, and Tablets, Worldwide, 2011 – 2017”, 3Q13 Update, September 2013. * Including Utility Tablets, Basic Tablets and Premium Tablets. Copyright © Infineon Technologies AG 2013. All rights reserved. Page 23 Higher Functionality in Mobile Devices Requires Additional Infineon Components Feature phone Smartphones Infineon’s addressable content per phone MOSFETs and power management ICs Silicon MEMS microphones Up to $2 Smart high-density charger TVS diodes High-density charger RF switches Low-noise amplifiers (LNA) 2 microphones* 1-2 microphones* 2-3 microphones* ESD protection ESD protection ESD protection 1 microphone ESD protection 8-12 RF switch ports 15-20 RF switch ports 2-4 RF switch ports 1 LNA 2-3 LNAs GSM WCDMA LTE 25-30 RF switch ports 3-10 LNAs LTE advanced * Does not include headsets, which typically require an additional microphone. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 24 Space-constrained Mobile Devices Require Components With Smaller Footprints High-density packaging for Low Noise Amplifiers Future Printed circuit board Laminate eWLB package -75%* ~6 mm 2.6 mm Present ~6 mm Past -50%* 3.2 mm 1.6 mm x 3.2 mm * Reduction in complete LNA footprint per successive package generation Comments Future mobile devices are expected to require up to 8 LNAs to handle global LTE Advanced requirements. LNAs are also used for GPS and WiFi. eWLB package integrates both LNA and associated discretes. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 25 Fast Growth of Silicon Microphone Business Via Partnerships with Microphone Vendors Units shipped by Infineon [units m] Business model CAGR(08-12) = 99% 800 600 400 200 0 2008 2009 2010 2011 2012 MEMS, ASIC Assembled MEMS microphone Mobile devices Source: IHS, “MEMS Microphones go Mainstream”, 2012. Comments Over 1 billion units shipped since 2008. From 2008 to 2012, market share increased from 2% to 31%. Innovative business model of enabling microphone companies to serve mobile device OEMs. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 26 PMM Aims to Outgrow Its Core Markets Power Management Computing Lighting TAM: Mobile Communications Charger Mobile devices > 7% p.a. PMM: TAM: Cellular infrastructure > 7% p.a. > 10% p.a. Source: IHS, ABI Research, Infineon. 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 27 Table of Contents PMM Segment Overview Growth Driver: Power Management Growth Driver: Mobile Devices Summary 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 28 Summary Revenue and Earnings Power Revenue growth back on track, Segment Result margin again between 15 and 20 percent. Diverse customer base, balanced end-market exposure. Growth drivers Increasing requirements for power management driving content growth per successive generation. Higher functionality in mobile devices requires additional Infineon components. Differentiators Smart system solutions combining digital control (Primarion, .dp) with leading discretes portfolio. High-integration packaging technologies (DrBlade, eWLB). Innovative business models (silicon microphone). 2013-11-18 Copyright © Infineon Technologies AG 2013. All rights reserved. Page 29