Infineon Reaches "Cost Crossover"-Milestone in 300mm Technology. Extends Competitive Advantage over 200mm Production

Munich, December 13, 2002 – Just one year after the start of volume chip production on 300mm-diameter silicon wafers, Infineon Technologies (FSE/NYSE: IFX) now produces at a lower cost per chip on 300mm wafers than on 200mm wafers. This “cost crossover” milestone reached at the Dresden, Germany, fabrication plant once again demonstrates Infineon’s leading manufacturing position in the industry. It will allow the company to garner the full benefits of increased productivity and cost savings of up to 30 percent as the plant will ramp to full capacity by summer 2003.

Operating at full capacity, the 300mm plant in Dresden will achieve 28,000 wafer starts per month. Infineon currently produces around 19,000 wafers per month in 300mm technology in Dresden.

“As pioneers of 300mm technology we have set a new worldwide standard for high-volume semiconductor manufacturing. Today, we are beginning to reap the efficiency benefits of our long-term investment in this new technology,” said Dr. Andreas von Zitzewitz, Member of the Managing Board and Chief Operating Officer of Infineon Technologies AG. “Converting DRAM production to 300mm we believe we have a four-to five-year lead over the competition which solidifies Infineon’s position in the semiconductor industry.”

The remarkably short time between the start of volume production and the cost crossover was achieved by Infineon through its sharp focus on technology to maximize yield from the first day of production ramp. This made it possible to achieve a more-than-90-percent yield on the “golden wafer“, which is the highest yield on 300mm wafers ever recorded to date.

Series production of 256-megabit memory chips in the 300mm plant in Dresden is currently based on 0.14µm technology. The introduction of the next generation with 0.11µm feature sizes is planned for 2003. This will increase the number of memory chips and lower production costs by a further 30 percent. Production of 512-megabit and 1 gigabit chips will replace the currently produced 256-megabit memory chips in the future.

Infineon’s Dresden facility currently employs around 4,600 people, some 1,100 of whom work in 300mm production. With the further expansion of capacity, the workforce dedicated to the 300mm operation may increase to 1,700 in total by summer 2003, depending on market conditions. A further 1,300 jobs will be created indirectly among suppliers thanks to the 300mm Dresden plant. Infineon constructed the 300mm production facility in Dresden with an investment volume of around EUR 1.1 billion. M+W Zander, the internationally recognized specialist in planning and building semiconductor facilities, and Leipziger Messe GmbH, the Leipzig Trade Fair company, each hold a stake in the 300mm plant with investments of EUR 51 million and EUR 118 million, respectively. The German Federal Ministry for Education, Science, Research and Technology (BMBF) also provided funding for the development of 300mm technology.

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 2002 (ending September), the company achieved sales of Euro 5.21 billion with about 30,400 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.