Infineon Reaches Milestone in China: Formal Opening of Suzhou Plant

MUNICH, Germany & SUZHOU, China—(BUSINESS WIRE)—Sept. 23, 2004— Infineon Technologies AG (NYSE: IFX) (FWB: IFX) today announced the execution of a further step within its China growth strategy. Infineon Technologies Suzhou Co., Ltd. has been formally opened in the presence of the Suzhou Party Secretary Wang Min. The first memory products are expected to roll off the backend production line by the end of calendar year 2004. Work on constructing the new production facility has begun in October 2003, and volume production is planned to commence in early 2005.

Simultaneously, Infineon inaugurated an IT Development Center in Suzhou focusing on manufacturing processes. The development center will employ between 80 and 100 engineers which will support the backend Suzhou manufacturing fab and become part of the worldwide IT Manufacturing Center of Competence (CoC).

Infineon Technologies Suzhou Co., Ltd.

Once completed, the facility will have a maximum capacity of up to one billion memory chips a year. The new company, located in the Suzhou Industrial Park, 80 km to the west of Shanghai, will operate under the name Infineon Technologies Suzhou Co., Ltd. Infineon holds 72.5 percent of the shares of the joint venture, China-Singapore Suzhou Industrial Park Venture Co. the remaining 27.5 percent.

The new facility will be developed in a number of stages as dictated by growth and trends in the global semiconductor market. Total planned investment in the project amounts to around US-Dollar 1 billion. When operating at full capacity, Infineon Technologies Suzhou will employ over 1,000 people.

"With this cooperation, we are systematically expanding our presence in the future market of China," said Peter Bauer, CMO of Infineon Technologies AG. "Infineon's partnerships with companies in China are well on track. We currently conduct business with several partners in the area of frontend and backend manufacturing. Of course, Infineon is also proud to have very good partnerships with customers all over China. The expansion of our R&D facilities in Shanghai and Xian are progressing nicely."

IT Development Center Suzhou

The IT development center Suzhou has been created to support Infineon's IT activities in the Asia pacific region concentrating mainly on the manufacturing process including manufacturing execution system, equipment integration & high automation, data collection & analysis, and business intelligence systems. The development group will build and maintain systems for use in all Infineon production sites, worldwide, supporting Infineon's standard manufacturing processes. The support group will integrate all regional IT services for Business, Manufacturing, R&D and Operational Systems.

"The Suzhou development center gives us the opportunity to create services not currently available on the market; creating a critical mass to support not only our Asian fabs but to supply all Infineon manufacturing locations with standardized, up-to-date and leading edge technology," explained Karl Pomschar, CIO of Infineon Technologies. "Given its proximity to the new production facility in Suzhou, its high cost efficiency, and strong support from the provincial government, Suzhou is the ideal location for this IT development center."

Infineon in China

Infineon has been a player in China since October 1994 (at that time still as Siemens Semiconductors). Today the company employs about 1,200 people in China and plans to grow its workforce here to more than 3,000 in the future. In Shanghai, the company cooperates with SMIC, which enables it to secure production capacities for memory chips without having to invest in its own facilities. In return Infineon licenses its leading 300 mm technology to its Chinese partner. In Suzhou, Infineon just inaugurated a joint venture for assembly and test of memory chips. In Wuxi, Infineon has a backend production facility for logic products, while the development center in Xi'an develops products for the communication segments and the automotive and industrial electronics sector. Infineon also has sales offices in Beijing, Shanghai, Shenzhen and Hong Kong.

Strategic collaboration with local partners is one of the key cornerstones of Infineon Technologies' expansion strategy in China. In March 2003, Infineon has expanded its successful production cooperation for standard memory chips (DRAMs) with SMIC, Shanghai. Given its manufacturing expertise and extensive technology portfolio, it also provides its major Chinese customers with the highest quality and most cost-effective semiconductor solutions, to enhance their competitive advantage in the local and global marketplaces.

About Infineon

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for the automotive and industrial sectors, for applications in the wired communications markets, secure mobile solutions as well as memory products. With a global presence, Infineon operates in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In fiscal year 2003 (ending September), the company achieved sales of Euro 6.15 billion with about 32,300 employees world-

wide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at www.infineon.com.

This news release is available online at

http://www.infineon.com/news/.

For the Business and Trade Press: INFXX200409.100e



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