Roadshow and Tutorial Zurich – Lugano – Milano – Trieste hosted by UniCredit Capital Markets & Investment Banking Investor Presentation for Q3 FY 2007 and “Power Semiconductors” Joachim W. Binder Senior Director Investor Relations Disclaimer This presentation was prepared as of July 27, 2007 and is current only as of that date. This presentation includes forward-looking statements about the future of Infineon’s business and the industry in which it operates. These include statements relating to future developments in the world semiconductor market, including the market for memory products, Infineon’s future growth, the benefits of research and development alliances and activities, Infineon’s planned levels of future investment in the expansion and modernization of its production capacity, the introduction of new technology at its facilities, the continuing transitioning of its production processes to smaller structure sizes, cost savings related to such transitioning and other initiatives, Infineon’s successful development of technology based on industry standards, Infineon’s ability to offer commercially viable products based on its technology, Infineon’s ability to achieve its cost savings and growth targets, and the impact of the carve-out of Qimonda, the group’s memory products business, its initial public offering, and any further sales of Qimonda shares or other corporate financing measures in that regard. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for Infineon’s products in particular, the success of Infineon’s development efforts, both alone and with partners, the success of Infineon’s efforts to introduce new production processes, the actions of competitors, the availability of funds for planned expansion efforts, and the outcome of antitrust investigations and litigation matters, as well as the other factors mentioned in this presentation and those described in the “Risk Factors” section of the annual report of Infineon on Form 20-F filed with the U.S. Securities and Exchange Commission on November 30, 2006 or contained in the company’s quarterly reports. As a result, Infineon’s actual results could differ materially from those contained in these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Infineon does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 2 Table of Contents Group Financials and Targets Infineon‘s Focus Areas Energy Efficiency Communications Security 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 3 Third Quarter FY 2007 Results: Revenues of EUR 1.75 bn; EBIT of EUR -280 m [EUR m] Infineon Group Infineon [EUR m] (incl. Qimonda) (excl. Qimonda) 2,290 15% 2,290 2,131 1,993 1,972 -2% -43 1% 28 2% 49 10% 1,962 1,731 1,674 1% 30 10% 216 1,751 2% 49 -7% -122 Q1 FY06 Q3 FY06 Q4 FY06 Q1 FY07 Automotive, Industrial & Multimarket [EUR m] Q2 FY07 0% -4 0% -8% -77 -5% -16% -280 -10% -2% -43 Q3 FY07 [EUR m] 8% 57 Q3 FY06 18-Sep-2007 740 9% 64 Q4 FY06 710 8% 55 Q1 FY07 741 9% 66 Q2 FY07 752 11% 81 Q3 FY07 236 -40% -120 0% -2 -5% -51 -7% -122 -1% -9 -16% 1%-174 2% 49 28 -3% -28 1% 30 1% 13 15% 10% 216 -5% 2% 5% 49 -15% 2% 49 238 259 -24% -57 -22% -53 -13% -34 Q3 FY07 Qimonda 100% 80% [EUR m] 1,232 50% 1,173 40% 30% 984 977 20% 60% 40% -23% -61 35% Q2 Q1Q4 Q2Q1 Q3 Q2 Q4 Q3 Q1 Q4Q2 Q1 Q3 FY05 FY06 FY06FY06 FY06 FY06 FY06FY06 FY07 FY06 FY07 FY07 FY07 FY07 Communication Solutions 266 16% 14% 12% 10% 8% 6% 4% 2% 0% 1,962 -25% Q4 FY05 297 714 2,131 45% 978 1,011 1,962 25% -15% Q2 FY06 1,993 1,0581,972 994 958 1,674 5% -20% Q4 FY05 996 1,731 963 1,065 20% 0% 10% 100 17% 204*) 19% 225*) 740 8% 77*) 10% 0% -40% -293*) -10% -20% -20% -30% -40% -40% -60% -50% Q3 Q4 Q1 Q2 Q3 FY06 FY06 FY07 FY07 FY07 Copyright © Infineon Technologies 2007. All rights reserved. Q3 Q4 Q1 Q2 Q3 FY06 FY06 FY07 FY07 FY07 *)Net of minority interests Slide 4 Infineon excluding Qimonda Fourth Quarter FY 2007 Outlook IFX COM Revenues and EBIT excluding Qimonda and before charges are expected to increase. Revenues and EBIT to improve strongly q-o-q Continued revenue increase in wireless business given ramp of platform shipments; wireline business to be about flat AIM Revenues to increase q-o-q; EBIT margin to be close to 10% Automotive to be about flat; Industrial & Multimarket to increase; Security & ASIC to decrease OOS, C&E Combined EBIT loss before charges broadly unchanged q-o-q Charges are expected to be insignificant 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 5 Infineon excluding Qimonda Group Results and FY 2007, FY 2008 Outlook FY 2005 FY 2006*) Sales 3,933 4,114 Gross Profit 1,187 1,308 R&D 902 816 750-800 SG&A 449 536 500-540 EBIT -305 -217 ~0 FY 2007 FY 2008 [EUR m] (Gross margin) (EBIT margin) (30%) (-8%) (32%) (-5%) Infineon defines EBIT as Earnings (loss) Before Interest and Taxes. *) FY2006: Includes net charges of € 199 million relating primarily to various impairments and restructuring measures as well as expenses incurred in connection with the insolvency of BenQ Mobile Germany and the IPO of Qimonda. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 6 Infineon excluding Qimonda Gross Cash, Debt, CapEx and D&A 354 555 694 890 378 870 391 1332 Q4 FY 06 Q1 FY 07 Gross Cash Gross Debt Q2 FY 07 Convertible Q3 FY 07 Net Debt Q1 FY07 Q2 FY07 Q3 FY07 FY 2007E FY 2008 onward CapEx 105 114 110 ~ 550 10-12% of sales D&A 162 152 150 ~ 600 in line with CapEx /Sales (%) /Sales (%) 18-Sep-2007 1481 0 [EUR m] CapEx and D&A 269 400 1330 800 1585 1200 694 555 524 [EUR m] 1600 Financial structure for the past quarters 540 2000 10.9% 16.9% 11.7% 15.5% Copyright © Infineon Technologies 2007. All rights reserved. 10.9% 14.8% Slide 7 Table of Contents Group Financials and Targets Infineon‘s Focus Areas Energy Efficiency Communications Security 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 8 Infineon Businesses Communication Solutions Automotive, Industrial & Multimarket Mobile Phone Platforms Automotive Feature Phone Microcontroller Entry Phone Automotive Power Mobile Software Sense & Control RF Solutions Industrial & Multimarket RF Engine Power Management & Drives Tuner Systems Discrete Semiconductors RF Power Broadband Access 18-Sep-2007 Security & ASICs ASIC Design & Security Chip Card & Security ICs Copyright © Infineon Technologies 2007. All rights reserved. Slide 9 Global Energy Trends: Substantial Needs and Highest Level of Awareness The cost of energy generation and the price of electricity continue to rise. #1 Electricity consumption is growing 2.6% p.a. Dwindling resources drive growth in energy savings and renewables. #2 Saving energy is increasingly crucial in industrial, commercial and household applications. Pollution, environmental protection and climate change are global concerns. Pollution and climate change drive demand for "clean" solutions. 18-Sep-2007 Renewables are on the rise in energy generation. Reducing the waste of energy helps cut back on energy generation and its harmful emissions. This is quickly becoming a standard requirement for all areas of public and private life (e.g. Kyoto Protocol). Copyright © Infineon Technologies 2007. All rights reserved. Slide 10 Electricity consumption can be cut by 25-30% through extensive use of power semiconductors – equal to the demand of the USA. Energy Consumption [bn kWh] Energy Demand and Electricity Consumption are on the Rise – We Can Help to "Do More With Less" Total Energy 20 Electrical Energy 16 12 25-30% savings potential from extensive use of electronic power conversion 8 4 30 to 40% of total energy 0 1800 1900 2000 2100 Infineon contributes to efficient energy management and the reduction of pollution and emissions. We deliver innovative, high performance solutions with best-in-class technologies that help our customers save energy and reduce pollution. We enable the use of limited resources as efficiently as possible. Source: Fraunhofer Institute, IISP, LES-Flyer, 2004 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 11 Our Products Help Reduce Losses Along the Entire Energy Distribution Chain Energy Generation Energy Distribution Energy Consumption Losses n AC/AC o q AC/DC/AC Power Supply AC/DC Losses r Point of Load DC/DC Losses Losses p Losses Motor Drives, Traction AC/DC/AC ~10% 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 12 Energy Generation: Traditional Power Plant Versus Renewables Coal-fired Plant, Nuclear Plant, etc. Wind Mill, Solar Cell, Hydro Power, etc. AC AC AC Almost no fluctuations in amplitude and frequency. Direct grid coupling possible. 1000 MW for state-of-the-art power plants. Semi content comparatively low. 18-Sep-2007 1 DC AC Permanent fluctuations in amplitude and frequency. Typically around 2 MW per wind turbine. Semi content EUR ~5000 per wind turbine. Resulting in EUR ~2.5 m per 1000 MW. Market size: EUR ~38 m in 2006. Market growth rate > 20% p.a. Copyright © Infineon Technologies 2007. All rights reserved. Slide 13 Energy Generation: Products and Customers 1 Infineon‘s Products EconoPACK PowerBLOCK Rectifier IHM Target Customers Competitors Infineon ABB Semiconductor Fuji Electric IXYS Mitsubishi Semikron 18-Sep-2007 IHV ABB Alstom ASP (CH) to Solon AG Mastervolt (GER) SEG (GER) to Ecotecnia (E) Siemens SMA Technologie AG (GER) Sputnik Engineering GmbH (CH) Sunways AG Xantrex (CAN) Copyright © Infineon Technologies 2007. All rights reserved. Slide 14 Energy Distribution: Grid Coupling and Long Range Energy Transport Traditionally High-Voltage Direct Current (HVDC) 380 kV AC AC 2 100-500 kV DC AC AC (in future 800 kV) DC DC AC HVDC transmission is advantageous for long-distance bulk-power delivery, synchronous interconnections (grid coupling), long-submarine cable crossings. Breakeven distance for 2000 MW power line is about 800 km. On each side of a HVDC 2000 to 8000 thyristors are required resulting in a average semiconductor content of USD 4 to 16 m. In China, annual investments of USD 10 bn in transmission systems are being made. Major growth areas are China, India, Brasil, Congo, and USA. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 15 Energy Distribution: Products and Customers 2 Infineon‘s Products Easy2B PrimePACK ETT LTT Target Customers Competitors Infineon ABB Semiconductor Fuji Electric IXYS Mitsubishi Powerex SanRex Semikron 18-Sep-2007 IGBT Stack ABB Alstom Transport Areva Bombardier Eaton Powerware Rockwell Siemens Schneider Electric Copyright © Infineon Technologies 2007. All rights reserved. Slide 16 Light-triggered Thyristor: Housing and Trigger Cable 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. 2 Slide 17 HVDC Valve Hall at „Moyle Interconnector“ Transmission Link 2 HVDC Module High-voltage direct current module with maximum 26 LTTs included. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 18 „Moyle Interconnector“ Transmission Link Between Nothern Ireland and Scotland 2 Contract awarded to Siemens for construction of converter stations in 1999. Infineon provided lighttriggered thyristors. Full operation since 2002. 2 x 250 MW. 63 km distance. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 19 HVDC Transmission Link Between The Netherlands and UK 2 Siemens PTD and Dutch consortium partner BAM Civiel are supplying the converter stations for the BritNed interconnector project. The 260km long HVDC submarine cable link between the Isle of Grain in Kent, southeast England, and Maasvlakte near Rotterdam will allow power transmission of 1000 MW at a DC transmission voltage of 450 kV as from the year 2010. Customer are Britain’s National Grid and Dutch grid operator TenneT. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 20 HVDC Transmission Link Between Funen and Zealand 2 Siemens PTD has been awarded an order by the TSO Energinet.dk in Denmark to supply the HVDC converter stations for the Storebaelt project which links the islands of Fuen and Zealand. The 600 MW HVDC link is scheduled to go into operation April 2010 and will connect the Western with the Eastern Grid. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 21 HVDC Transmission Link Between New Jersey and Long Island 2 At the end of June 2007, Siemens PTD commissions the new HVDC transmission link between New Jersey and Long Island, New York. Thanks to this HVDC link, Long Island will receive power from the grid of New Jersey in a low-loss and environmentally compatible way, which will help to strengthen the “backbone” of Long Island’s transmission system. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 22 HVDC Transmission Link Between Ballia and New Delhi 2 Siemens will soon supply environmentally friendly electricity to the energy-hungry region surrounding India’s capital city of New Delhi. The new transmission line reaches over a distance of about 780 kilometers from Ballia in eastern Uttar Pradesh to a location near New Delhi. The new long-distance HVDC transmission link is the second system that Siemens is building in India. The first HVCD transmission route was the "East-South” long-distance link (2500 MW), which still currently ranks as the second longest HVDC transmission link in the world. Since 2003, the Siemens system has been transporting electrical energy with low loss from the Talcher power plant complex in the state of Orissa in the east of India over 1450 km to the industrial region around Bangalore in the south. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 23 HVDC Transmission Link Between Yunnan and Guangdong 2 With its new system for the HVDC between the province of Yunnan and Guangdong Siemens ventures into a new dimension of HVDC technology. The system will be the first in the world to transmit electricity at a DC voltage of 800 kV. At the same time this project with a power transmission capacity of 5000 MW will be the long-distance HVDC link with the world’s highest ever power capacity which has been built. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 24 Motor Drives and Traction: Focus on Efficient Power Conversion and RPM Control Direct AC Connection 50/60 Hz fixed 3 AC-DC-AC Conversion 50/60 Hz fixed AC variable frequency DC AC About 60% of industrial energy is used by electrical motors. For each USD 1 spent to purchase a motor, USD 100 are spent for energy cost during its lifetime. Conventional motor drives are being replaced by intelligent inverter-based drives, saving up to 40% energy. AC/DC/AC conversion allows permanent control to match output with the needs. 12.2 m industrial drives in 2007 with a CAGR of 9.8%. (source: IMS, December 2005) Semiconductor content USD 10 to USD 100k, depending on application. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 25 Motor Drives and Traction: Products and Customers 3 Infineon‘s Products CiPoS ISOFACE TrenchStop EconoPACK Target Customers Competitors Infineon Fuji Electric International Rectifier Semikron STMicroelectronics Toshiba 18-Sep-2007 Baumüller BSH (Bosch-Siemens Hausgeräte GmbH) Electrolux General Electric Matsushita Midea Schneider Electric Whirlpool Yaskawa Copyright © Infineon Technologies 2007. All rights reserved. Slide 26 Power Supply: Focus is on Efficient Power Conversion Inefficient AC-DC Power Supply AC: 230V 50Hz DC: HEAT AC 48VDC 19VDC 12VDC 6VDC Telecom Notebook Desktop Mobile charger 4 Efficient AC-DC Power Supply DC: AC: 230V 50Hz AC 48VDC 19VDC 12VDC 6VDC Telecom Notebook Desktop Mobile charger DC DC More efficient semiconductor components allow lower conduction losses at higher switching frequencies. This results in reduction of size of transformers, heat sinks and costs. “Google managed to increase the typical efficiency of power supplies from 60-70% to at least 90% efficiency, reducing lost energy by a factor of four.” (source: EETimes, Google) 9.4 m server power supplies in 2007 with a CAGR of 10%. (source: iSuppli) Average semiconductor content in server power supplies (800 W to 1000 W) is about USD 15. Infineon serves all of the top-10 power supply manufacturers. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 27 Power Supply: Products and Customers 4 Infineon‘s Products CoolMOS Family CoolMOS TO220 Target Customers Competitors Infineon Fairchild International Rectifier National Semiconductor STMicroelectronic 18-Sep-2007 CoolSET Alcatel-Lucent Cisco Delta Lite-on Sun Microsystems Copyright © Infineon Technologies 2007. All rights reserved. Slide 28 Point-of-Load: DC/DC Power Conversion Inefficient DC-DC Voltage Regulator DC: DC: 5 to 12V 3.3VDC 2.5VDC 1.8VDC 1.2VDC Logic DSP Memory CPU 5 Efficient DC-DC Voltage Regulator DC: DC: 5 to 12V DC DC 3.3VDC 2.5VDC 1.8VDC 1.2VDC Logic DSP Memory CPU DC DC Processors (CPUs, graphics controller, DSL processors, etc.) are getting more complex, i.e. higher number of transistors. Therefore, higher currents need to be handled leading to more power MOSFETs per device. PC motherboards are equipped with up to ten MOSFETs; graphics boards with up to four MOSFETs. Points of load need to handle currents of 10 A to 50 A resulting in about 40 W to 200 W. Semiconductor content per point of load is in the range of USD 1 to USD 6. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 29 Point-of-Load: Products and Customers 5 Infineon‘s Products OptiMOS OptiMOS2 OptiMOS3 OptiMOS-T Target Customers Competitors Infineon Fairchild International Rectifier National Semiconductor STMicroelectronics Volterra 18-Sep-2007 Lamp Ballast Asus Compal Dell Hipro HP Intel Distributors Copyright © Infineon Technologies 2007. All rights reserved. Slide 30 CoolMOS for AC/DC power conversion Growth Driver for CoolMOS/OptiMOS: More Applications Require Power Efficiency CoolMOS 1st Gen. CoolMOS 2nd Gen. Server SMPS Notebook Adapter Lighting +107% 1998 OptiMOS for DC/DC voltage regulation CoolMOS 3rd Gen. CoolMOS 4th Gen. Computing (PC Silverbox) +113% 18-Sep-2007 5 Solar Aviation +41% Gaming +43% Estimated +20% +32% +32% Total Sales Growth (yoy) 2000 2002 2004 2006 2008 Telecom Modules Notebook Server Motherboard +685% SFET1 +42% Graphics Card +107% +4% -16% OptiMOS-1 Gaming +20% Estimated +15% Total Sales Growth (yoy) OptiMOS-2 Copyright © Infineon Technologies 2007. All rights reserved. OptiMOS-3 Slide 31 Lamp Ballast - Savings potential by Infineon CoolMOS and Smart Ballast IC Relative Energy consumption 100% T12 lamp ∅ 38 mm 1st step ~30% Energy saving potential 70% T8 lamp ∅ 26 mm 2nd step 50% 3rd step modern mirror-louvered luminaires 4th step 35% electronic control gear (ECG) 30% T5 lamp ∅ 16 mm + “Cut off” ECG 5th step 15% daylight linked dimming system Today 2006 In progress Source: OSRAM; CLEMA: Lamp Ballast Guide; Infineon 2006 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 32 Gains of Market Share in Power Semiconductors Market Share in Power Semiconductors including Discrete Protected MOSFETs Market Share in Power Semiconductors excluding some Discr. Prot’ed MOSFETs 100% 8.10% 8.40% 9.40% 100% 90% 90% 80% 8.50% 2005 2006 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 2003 others Toshiba International Rectifier Infineon 2004 2005 Vishay STM Fairchild Source: IMS 2006 18-Sep-2007 7.70% others Vishay Toshiba STMicro Fairchild Infineon International Rectifier Source: IMS 2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 33 Infineon‘s Worldwide Market Shares for the Power Semiconductor Market 2006 Total Power Semiconductors ($12,387 m) #1 #2 #3 #4 Infineon International Rectifier Fairchild STMicroelectronics 8.5% 8.3% 7.8% 7.5% Total Transistors (market: $6,586 m) #1 #2 #3 #4 Discrete IGBTs (market: $481 m) #1 #2 #3 Infineon International Rectifier Fairchild 21.6% 18.5% 16.7% Power Modules (market: $1,967 mio) #1 #2 #3 Mitsubishi Infineon Semikron 30.3% 18.6% 15.1% Protected MOSFETs (market: $293 mio) #1 #2 #3 Infineon International Rectifier Toshiba 43.2% 11.2% 11.0% Fairchild International Rectifier Toshiba Infineon 13.7% 13.1% 10.0% 9.5% IGBT Modules (market: $1651 m) #1 #2 #3 Mitsubishi Infineon Fuji Electric 35.7% 19.3% 14.9% Thyristor/Diode Modules (market: $258 m) #1 #2 #3 Semikron Infineon SanRex 34.0% 18.3% 14.3% High Power Thyristors (market: $154 m) #1 #2 #3 Infineon ABB Semiconductor IXYS 31.4% 19.5% 9.8% Source: IMS, 2007 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 34 Energy Conversion Nuclear Plant Coal-fired Plant Wind Turbine for AC: • voltage • frequency • 1-phase, 3-phase High-Voltage AC Power Line for DC: • voltage • polarity Power Line Photo Voltaic Battery HVDC for DC: • voltage • polarity Hybrid Car Industrial Drives Transportation for AC: • voltage • frequency • phase shift • 1-phase, 3-phase 18-Sep-2007 Motherboard, Graphics Board Copyright © Infineon Technologies 2007. All rights reserved. Home Appliances Lighting Medical Power Supplies Slide 35 Four Types of Conversion U U U t Rectifier t ~ U AC DC t U = t t Inverter • different voltage • different frequency • phase shift AC DC AC DC Voltage Regulator • different voltage • different polarity U U t U ~ U DC AC = t U Inverter t 18-Sep-2007 t Copyright © Infineon Technologies 2007. All rights reserved. t Slide 36 Automotive Microelectronics Trends: More Than 50% of $-Value of Electronics Are Semiconductors 450% Growth (1995 = 100%) 400% 350% Semiconductor content of car Value of semiconductor per car 2008: USD 320 2020: USD 700 425% CAGR 11.3% 300% Electronics 255% content of car CAGR 250% 6.9% 200% Car volume 144% 150% CAGR 2.6% 100% 1995 1997 1999 2001 2003 2005 2007 2009 Source: ZVEI 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 37 Areas of Growth in Automotive Market Applications Powertrain Energy Efficiency Fuel consumption Energy recovery (hybrid) (Power: 13% market share*) [USD bn] Regulation Emission limits (CO2) Safety (TPMS, emergency call, VSC) Toll collection Driving Experience Higher demand for safety and comfort features More devices per car Proactive warning, assist and intervention 17.5 18% 3.3 27% 4.8 29% 5.2 26% 4.7 25.8 CAGR 7.4% 2006 Powertrain Body 16% 4.2 7.2 28% 31% 25% CAGR 5% 8% 8.1 11% 6.3 5% 2011 Safety Infotainment Source: Strategy Analytics, 2006 Emerging Markets China and India 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. 32-bit motor control Hybrid drivetrain Safety (Power: 17% market share*) Airbag, ABS & VSC Driver assistance systems Body (Power: 35% market share*) Electrical motor control LEDs for lighting Infotainment Integration of consumer devices into vehicle *= Infineon own estimate. Slide 38 Strong European Customer Relationships Due to More Than 20 Years of Experience Top 15 Global Automotive Suppliers 2006 Infineon’s Major Customers Sales [USD bn] 29.69 Bosch Delphi 24.4 Denso 24 23.88 Magna International 19.5 Johnson Controls 19.37 Aisin Seiki 17.84 Lear 15 Faurecia Valeo 12.7 TRW 12.16 Siemens VDO 12.01 Continental 18-Sep-2007 11.47 Visteon 10.87 Yazaki 10.58 ThyssenKrupp 10.21 Source: Automotive News, June 2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 39 Steady Gains of Market Share in Automotive in the Past Six Years 100% 90% 80% 7.90% 8.20% 8.70% 9.10% 9.30% 9.50% 2001 2002 2003 2004 2005 2006 70% 60% 50% 40% 30% 20% Freescale Infineon STM Renesas Bosch Toshiba others 10% 0% Major Major changes changes from from 2005 2005 to to 2006 2006 Worldwide: Infineon reduced the distance to Freescale (#1) and enlarged the distance to STM (#3). Europe: Infineon further strengthened #1 market position; STM outpaced Freescale as #2. NAFTA: Infineon outpaced STM as #2. Japan: Infineon assured #6 position and is the most successful non-Japanese automotive semiconductor supplier. Asean: Infineon improved market position to #3 from #4. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Source: Strategy Analytics, 2007 Slide 40 Automotive semiconductor market shares 2006 – IFX outpaced STM in NAFTA 1. 2. 3. 4. 5. 6. 7. 8. STM 10.3% Freescale(3.) 8.5% Infineon(4.) 7.8% NXP(5.) 7.4% NEC(2.) 7.3% Toshiba 4.9% Vishay 3.3% Bosch 3.0% 1. 2. 3. 4. 5. 6. 7. 8. Freescale Infineon STM Renesas NEC Toshiba NXP Bosch 1. 2. 3. 4. 5. 6. 7. 11.1% 9.5% 8.4% 7.1% 7.0% 6.1% 6.1% 5.5% Infineon ATV revenue and market share Infineon STM(3.) Freescale(2.) Bosch NXP TI NEC 15.0% 11.6% 11,1% 10.8% 8.3% 5.7% 4.5% 9.5% 8.2% 5.7% 3.9% 94 1. 2. 3. 4. 5. 6. 7. 8. Renesas Toshiba NEC Fujitsu Sanken Infineon STM NXP 18-Sep-2007 21.9% 18.1% 13.9% 7.6% 3.3% 3.0% 2.7% 2.7% 98 02 06 Source: SA ATV semiconductor vendor ranking incl. ICE, IFX Copyright © Infineon Technologies 2007. All rights reserved. 1. 2. 3. 4. 5. 6. 7. Freescale Infineon(3.) STM(2.) NXP Delphi NEC(7.) TI(6.) 21.5% 8.4% 8.0% 5.6% 4.8% 3.3% 3.0% Source: Strategy Analytics Slide 41 Automotive semiconductor market share change 2005 vs. 2006 - IFX outperformed the market Vishay 2006 2005 21.5% 8.4% 8.0% 5.6% 4.8% 22.3% 7.9% 8.5% 5.4% 5.0% 2006 2005 15.0% 11.6% 11.1% 10.8% 8.3% 14,8 % 11.4 % 11.5 % 10.7 % 8,0% 2006 2005 1. Renesas 2. Toshiba … 21.9% 18.1% … 22.4% 18.8% … Delphi 6. Infineon (6) 3.0% 2.8% Bosch 7. STM 8. Philips 2.7% 2.7% 2.7% 2.7% 1. 2. 3. 4. 5. Toshiba TI Freescale Infineon (3) STM (2) NXP Delphi STM Sanken 1. 2. 3. 4. 5. Renesas NXP Infineon (1) STM Freescale Bosch NXP NEC Infineon WW MS 2006: 9.5% Freescale -0.3% 18-Sep-2007 -0.2% -0.1% 0.0% 0.1% 0.2% 0.3% Copyright © Infineon Technologies 2007. All rights reserved. 0.4% Source: SA Automotive Semiconductor Vendor Slide 42 Market Shares in 2005 Automotive semiconductor vendor revenues 2005 vs. 2006 - IFX extended world wide No. 2 position 216 229 Vishay 2005 2006 1006 1077 Toshiba 575 TI Automotive Automotive 670 1382 1468 STM Powertrain Powertrain 185 193 Sanken 1159 1238 Renesas 960 NXP Safety Safety Mgmt. Mgmt. 1077 1130 1220 NEC 1525 Infineon 1674 No. 2 1868 1951 Freescale 202 195 Delphi 865 Bosch 0 500 Body Body & & ConveConvenience nience Infotainment Infotainment 962 1000 1500 2000 $M Source: SA Automotive Semiconductor Vendor Market Shares in 2006 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 43 Legislation Forces CO2 Reduction for Cars: Higher Fuel Efficiency Indispensable CO2 Emission [g/km] 297 Porsche 190 183 165 162 158 152 150 146 BMW Daimler-Chrysler Ford Volkswagen General Motors Renault-Dacia Peugeot-Citroen Fiat 0 100 new target by EU by 2012: 130 g/km 18-Sep-2007 200 300 400 previous target by European auto industry (ACEA) by 2008: 140 g/km Copyright © Infineon Technologies 2007. All rights reserved. Slide 44 Hybrid Vehicles Enhance the Semiconductor Content Per Vehicle Significantly Hybrid Control Unit: Motor Control Unit: Power supply Transceivers DC/AC Converter Driver IC's Power modules – IGBTs, diodes HAL-Sensors (position and current) Microcontroller (e.g. TC1766) Safety µm (e.g. XC800) DC/DC Converter Microcontroller (e.g. XC164) Discretes - CoolMOS Driver IC's Battery Management: Power supply Transceiver Microcontroller (e.g. XC164) Smart battery switch 18-Sep-2007 44% IGBT / Diodes 5% 4% 3% Module Adder Logic IC's Supply 34% Sensors Mild Mild Hybrid Hybrid Specific Specific Semiconductor Semiconductor Content: Content: US$ US$ 100-250 100-250 Full Full Hybrid Hybrid Specific Specific Semiconductor Semiconductor Content: Content: US$ US$ 400-1,000 400-1,000 Auxiliary Drives (e.g. AirCon): 10% Power supply Transceivers Microcontroller (e.g. TC1766) Microcontroller (e.g. XC164) Power module 50-80% 50-80% related related to to IGBT IGBT and and Diode Diode in in aa package package Copyright © Infineon Technologies 2007. All rights reserved. Slide 45 Innovation and productivity gains through Moore’s Law are reaching limits Today Minimum Feature Size [µm] 5.0 Physical Limits 2.0 Sample Technologies Thyristors 1.0 IGBT DMOS/CD/BCD 5V CMOS/BiCMOS 0.50 0.25 RF Bipolar RF BiCMOS 0.13 0.065 ITRS Roadmap 0.032 1995 18-Sep-2007 2000 2005 2010 2015 Copyright © Infineon Technologies 2007. All rights reserved. Today ~50% of wafer area attributed to advanced CMOS Microprocessors, ASICs Memory (DRAM, Flash) Slide 46 Table of Contents Group Financials and Targets Infineon‘s Focus Areas Energy Efficiency Communications Security 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 47 Connectivity Drives Growth in Our Mobile Phone and xDSL Businesses Mobile Phones [units m] [units m] 1,261 1,349 259 165 115 810 2005 Other 2007 2008 GSM/GPRS 3 EDGE 2009 137 204 1,139 2006 [units m] 1,412 990 2005 Broadband CO Broadband CPE 2010 WCDMA 102 2006 2007 114 82 133 2006 2007 2008 DSL CPE Broadband Router Cable CPE Voice Terminal Adapters IP Set Top Boxes 98 2009 2005 ADSL 2008 2009 VDSL Multimedia baseband 3 RF CMOS transceiver 3 Power management 3 3 3 Bluetooth Protocol stack Application software Source: ABI Research, Mobile Device Market Data, Q1 2007; Infonetics, Q3 2006 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 48 Complete Mobile Phone Platform Solutions for Major Growth Markets Platform Platform ULC1 Power management (incl. SRAM) RF CMOS transceiver E-GOLDvoice Baseband ULC2 E-Powerlite 2.75G EDGE MP-E S-GOLD2 SMARTi PM SM-Power Protocol stack 3 3 3 Ramp-up 3 3 3 MPElite S-GOLDradio 2G / 2.5G GSM / GPRS E-GOLDradio Target Target markets markets 3 2H CY07 3G UMTS 3.5G HSDPA MP-EU MP-EH S-GOLD2, co-processor S-GOLD3H SMARTi PM, SMARTi 3G SMARTi 3GE SM-Power1.6 SM-Power3 3 3 3 CY 2007+ Integrated in one chip 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 49 Successful Launch of Platforms in Major Target Markets EDGE 3G ULC 1 ULC 2 Plus: Design win at NOKIA with E-GOLDvoice single-chip for entry level phones. Design wins across our ULC 1, ULC 2, EDGE and 3G platforms at major customers. 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 50 RF Transceiver CMOS Leadership Turns Into Design-Wins 2G / 2.5G GSM/GPRS 2.75G EDGE SMARTi SD SMARTi SD2 SMARTi PM SMARTi PM2 SMARTi PM+ 130nm CMOS 3G WCDMA New 130nm CMOS Customer Air Interface Two tier-1 OEMs EDGE (SMARTi PM+) 3.5G HSDPA 4G WiMAX/LTE SMARTi 3G SMARTi 3GE SMARTi UE SMARTi WiMAX 130nm CMOS 130nm CMOS Three tier-1 WCDMA / WEDGE OEMs (SMARTi 3GE / 3G) Tier-1 OEM HEDGE (SMARTi UE) Multiple DW on EDGE / WEDGE / IFX platforms HEDGE 18-Sep-2007 Selection of major design wins Copyright © Infineon Technologies 2007. All rights reserved. New New 130nm CMOS Nr.1 worldwide in RF Transceivers 9 World‘s first EDGE CMOS RF Transceiver in volume 9 World‘s first WCDMA CMOS RF Transceiver in volume 9 World‘s smallest EDGE transceiver 9 Slide 51 Infineon‘s Four Growth Areas in the Copper-based Environment 1. Bandwidth 2.Wireless Infrastructure INCA_IP INCA_IP INCA_IP Danube, Amazon VINAX-CPE Street cabinet T1/E1 3G base station Network Central Office T1/E1 2G base station T1/E1 or SHDSL GEMINAX_MAX VINAX POTS/ ISDN/ DSL T1/E1 or SHDSL 3. Replacement 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. IP PBX PBX 4. Migration Slide 52 Next Generation Network Drives Growth in DSL CO and CPE Network replacement profile per carrier 3 to 4 years N G N Convergence IMS T IP V IP Vo Digital Telephone Network 1990 18-Sep-2007 L DS la er v O y 2000 Copyright © Infineon Technologies 2007. All rights reserved. 2015 Slide 53 Table of Contents Group Financials and Targets Infineon‘s Focus Areas Energy Efficiency Communications Security 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 54 Chip Card ICs: Spreading Out to New Segments Major Chip Card Applications Applications Payment, E/M-Commerce Key Growth Drivers Security Mobility Convenience Internet High security Low-power consumption Large memory Low price Multi applications Virtual languages Contactless Identification Transport Banking Mobile Communications Prepaid Telephone Past 18-Sep-2007 Current Emerging Copyright © Infineon Technologies 2007. All rights reserved. Slide 55 Infineon – Never stop thinking UPDATE Key Financials for Infineon excl. Qimonda Q3 F05 Q4 F05 Q1 F06 Q2 F06 Q3 F06 Q4 F06 Q1 F07 Q2 F07 Q3 F07 Sales (EUR m) 947 964 996 1,065 995 1,058 958 978 1,011 -98 -10.3% -81 -8.4% 1 0.1% 7 0.7% -51 -5.1% -174 -16.4% -9 -0.9% -28 -2.9% 13 1.2% EBIT ex charges (EUR m) EBIT margin ex charges -27 -2.9% -8 -0.8% 3 0.3% 11 1.0% -22 -2.2% -11 -1.0% -9 -0.9% 1 0.1% 16 1.6% D&A (EUR m) D&A / Sales (%) 168 208 150 206 174 17.7% 21.6% 15.1% 19.3% 17.5% 172 162 152 16.3% 16.9% 15.5% 150 14.8% EBIT (EUR m) EBIT margin CapEx (EUR m) CapEx / Sales (%) NM 107 NA 11.1% 49 4.9% 314 29.5% 158 15.9% 173 16.4% 105 11.0% 114 11.7% 110 10.9% Gross Cash (EUR m) 1,374 1,264 1,426 1,427 1,585 1,481 870 890 Gross Debt (EUR m) 1,557 1,593 1,872 1,839 1,854 1,872 1,248 1,244 183 329 446 412 269 391 378 354 29,849 30,071 29,871 29,555 Net debt (EUR m) Employees 18-Sep-2007 26,834 30,561 29,446 Copyright © Infineon Technologies 2007. All rights reserved. Slide 57 Financial Calendar Nov 14, 2007* Earnings Release FQ4 and FY 2007 Jan 28, 2008* Earnings Release FQ1 2008 Feb 14, 2008* Annual General Meeting Apr 23, 2008* Earnings Release FQ2 2008 Jul 25, 2008* Earnings Release FQ3 2008 Dec 03, 2008* Earnings Release FQ4 and FY 2008 * = Preliminary Date 18-Sep-2007 Copyright © Infineon Technologies 2007. All rights reserved. Slide 58