Munich, Germany – September 28, 2000 – Infineon Technologies (FSE/NYSE: IFX) today announced that it has begun sampling its first dual-mode UMTS/GSM baseband integrated circuit solution enabling customers to develop highly integrated, miniaturized and feature rich third generation wireless terminals. The M-GOLD chip is worldwide the first single-chip baseband solution that drives the convergence of second and third generation (2G, 3G) mobile radio standards.

Intex Management Services (IMS; July 2000) predicts almost 1.8 billion worldwide cellular subscribers by the end of 2006. Over 50% of these subscribers will be using 2.5G or 3G technologies together with the respective mobile multimedia services such as customized infotainment, multimedia messaging, mobile Internet/Intranet access and mobile commerce.

“M-GOLD offers our customers an early and smooth migration from second to third generation mobile phones so that they can benefit as soon as possible from the emerging 3G business opportunity,” said Guenter Weinberger, Senior Vice President and General Manager of the Wireless Group at Infineon Technologies. “Delivery of the M-GOLD system chip once again emphasizes Infineon’s support of the industry and position as the leading wireless modem company.”

M-GOLD integrates both analog and digital functions (mixed signal design) and interfaces seamlessly with Infineon’s UMTS/GSM radio frequency chipsets. The highly integrated single-chip baseband IC incorporates Infineon’s UMTS and GSM/GPRS modems as well as an extensive set of dedicated and general purpose peripherals. Due to its dual-mode capability M-GOLD addresses all UMTS/WCDMA and UMTS/WCDMA/GSM markets.

M-GOLD is based on Infineon’s award-winning CARMEL™ DSP and TriCore™ architectures and is manufactured in an advanced five layer metal, copper 0.18 µm CMOS process. It will be available in a LFBGA 256 package.

Infineon’s Wireless Group develops, produces and markets semiconductors and complete-system-solutions for mobile applications like mobile telephones, cordless telephone systems and GPS equipment. The company is also a world leader in technology for the future mobile radio standards UMTS and Bluetooth. Infineon is one of the few companies that offer the entire spectrum of mobile telephone ICs. Infineon‘s market share for radio frequency and baseband ICs has continuously grown in the last few years and reached an 18 percent growth rate in 1998. With that, in comparison to world wide sales, Infineon was the largest producer of radio frequency ICs and the second largest supplier of baseband ICs. With a growth rate of 48 percent in the first nine months of fiscal year 2000, Infineon’s Wireless Group has grown considerably faster than the market.

Infineon Technologies AG, Munich, Germany, offers semiconductor solutions for applications in the wireless and wired communications markets, for the automotive and industrial sectors, for security systems and chip cards 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 the fiscal year 1999 (ending September), the company achieved sales of Euro 4.24 billion (US $ 4.51 billion) with about 26,000 employees worldwide. 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

Background Information

UMTS - Universal Mobile Telecommunications System

UMTS is the next generation mobile communications standard which has been defined by the International Telecommunications Union (ITU). UMTS will deliver pictures, graphics, video communications and other wide-band information as well as voice and data, direct to people on the move thus enabling tomorrow's wireless information society. UMTS will build on and extend the capability of today’s mobile technologies (like digital cellular and cordless) by providing increased capacity, data capability (up to 2Mbit/s) and a far greater range of services using an innovative radio access scheme and an enhanced, evolving core network.

Over the short term, third-generation mobile communications and existing mobile networks will coexist and complement each other. There will be a smooth transition from today’s GSM networks to the new technology. Third-generation mobile networks will first be established in city centers with a high subscriber and usage density. The existing GSM networks will continue to complement the mobile communications provision for a transitional period of several years, particularly as far as coverage and voice services are concerned. Due to the coexistence of both GSM and UMTS, the early availability of dualmode terminals will be the key UMTS success factor. UMTS is expected to go into commercial service in 2001 in Japan, followed by Europe in 2002.

GSM - Global System for Mobile Communications

GSM is the world's leading second generation digital standard in mobile communications.

GPRS - General Packet Radio Service

GPRS represents the first implementation of packet switching within GSM, which is essentially a circuit switched technology. It brings Internet Protocol (IP) capability to the GSM network for the first time and will enable users to send and receive data at speeds up to 115kbit/s. Therefore, GPRS is often referred to as 2.5G.

WCDMA - Wideband Code Division Multiple Access

An air interface technology for wideband digital radio communications. WCDMA has been selected as the basis for the third generation of mobile telephone systems in Europe, Japan and other Asian countries.