Infineon Q3 2011 Revenues above Expectations at Euro 1,043 Million

NEUBIBERG, Germany, July 28, 2011 -

Total Segment Result margin maintained at high level of 20.3 percent

• Sales up 5 percent sequentially driven by strength in ATV and IMM
• Increase of Total Segment Result1 by 5 percent to Euro 212 million
• Q4 2011 outlook: Broadly flat Segment Result, sales expected to be at least flat
• to begin building a shell for a second 200mm clean room at its existing frontend site in Kulim, Malaysia
• to invest around Euro 250 million and create approximately 250 jobs in Dresden over next 2 years for mass production of power semiconductors on 300mm wafers

Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) today reported results for the third quarter of the 2011 fiscal year, ended June 30, 2011.

In the third quarter of the fiscal year Infineon again grew faster than the market and its direct competitors. Total Segment Result margin remained at last quarter’s high levels. “Our excellent results continue to prove that Infineon’s focus on energy efficiency, mobility and security is the right strategy”, says Peter Bauer, CEO of Infineon Technologies. Infineon will further extend its technology leadership by driving 300mm thin wafer manufacturing of power semiconductors out of the newly-acquired facility in Dresden. “With this leading innovation Infineon will expand its competitive advantage,” says Peter Bauer. In order to fully exploit Infineon’s growth potential, the Company will also expand the cost efficient 200mm manufacturing site in Kulim, Malaysia.

Fiscal third quarter 2011: Growth in IMM and ATV drives sales and Total Segment Result The original guidance called for flat revenues. Sales growth was driven by strong demand in Industrial & Multimarket (IMM) as well as revenue growth in Automotive (ATV). Counter to original expectations, the ATV division did not experience any significant negative impact neither on revenue nor on Segment Result from disruptions within the automotive supply chain after the Japan earthquake.

Infineon reported net income from continuing operations of Euro 175 million, up from Euro 173 million in the second quarter. Basic earnings per share from continuing operations stayed unchanged compared to the preceding quarter at Euro 0.16 and diluted earnings per share from continuing operations increased from Euro 0.15 to Euro 0.16.

Income from discontinued operations, after income taxes, was Euro 15 million for the third quarter, down from Euro 399 million in the second quarter. Net income from discontinued operations decreased mainly as the second quarter of the 2011 fiscal year contained a non-recurring after tax gain of Euro 378 million relating to the closing of the sale of the Wireless mobile phone business to Intel on January 31, 2011.

Net income for the group was Euro 190 million in the third quarter, a decrease from Euro 572 million in the previous quarter. Third quarter basic and diluted earnings per share were Euro 0.17, down from Euro 0.53 and Euro 0.50, respectively, for basic and diluted earnings per share in the second quarter of 2011 fiscal year.

Operating cash flow from continuing operations amounted to Euro 311 million for the third quarter of the 2011 fiscal year, up from Euro 177 million in the prior quarter.

Investments from continuing operations, which the Company defines as the sum of purchases of property, plant and equipment, purchases of intangible assets and capitalized research & development (R&D) expenses, were Euro 319 million in the third quarter of the 2011 fiscal year, compared to Euro 164 million in the second quarter.

Despite the significant increase in investments versus the last quarter, Free cash flow from continuing operations for the third quarter turned only marginally negative at Euro -8 million versus Euro 13 million in the prior quarter of the 2011 fiscal year.

Cash position remains comfortable

As of June 30, 2011, the Company’s gross cash position stood at Euro 2,585 million with a net cash position of Euro 2,246 million. Compared to the end of the prior quarter, both positions decreased versus values of Euro 2,691 million and Euro 2,335 million for gross and net cash, respectively.

Expansion of production capacity

In order to secure further growth, Infineon decided to begin building a shell for a second 200mm clean room at its existing, highly cost-competitive frontend site in Kulim, Malaysia. Capitalizing on its competitive lead in the manufacturing of power semiconductors on 300mm wafers, Infineon furthermore resolved that it will use the clean room that was purchased in May 2011 for the mass manufacturing of power devices on 300mm wafers. Until 2014 Infineon will invest around Euro 250 million and create approximately 250 jobs in Dresden. If the market, revenue and underlying conditions develop in line with forecasts, further expansion would be possible.

Outlook for fourth quarter of the 2011 fiscal year: Sales expected to be at least flat; Total Segment Result to be about flat in absolute terms. Infineon expects sales for the fourth quarter of the 2011 fiscal year to be at least flat compared to the third quarter of the current fiscal year. Within this outlook, the Company expects a further increase in revenues in Industrial & Multimarket (IMM), broadly flat turnover in Chip Card & Security (CCS) and a seasonal sales decline in Automotive (ATV). Total Segment Result is expected to remain broadly flat in absolute terms from the levels reached in the third quarter of the 2011 fiscal year.

Complete press release can be found at www.infineon.com/press

Kay Laudien, +49-89-234-28481, kay.laudien at infineon.com