Infineon Raises the Standards for Voice-over-IP Systems with New High-Integration Digital Phone Handset IC; Announces First Design Win

Munich, Germany – December 11, 2002 – Infineon Technologies (FSE/NYSE: IFX), a leading provider of integrated circuits (ICs) for advanced communications systems, today introduced a single-chip solution for Voice-over-Internet Protocol (VoIP) telephones. The new INCA-IP chip meets IP phone manufacturer’s requirements for integrated conferencing, hands-free functionality and high-quality audio performance. It also is the first VoIP system chip to integrate hardware-accelerated encryption, enabling advanced network security support in IP phones.

Infineon also announced that Siemens ICN, a leading provider of real time communications to telecommunications and business markets, will use the INCA-IP for its IP telephone product line in future.

“Communication over IP (CoIP) is changing the way businesses communicate by combining the features of traditional business phones with the benefits of data networking technology,” said Dieter Hecker, Vice President of Communication Clients & Devices at Siemens ICN. “With HiPath Siemens is building on its leadership in real time communications. Today's companies want to reduce communication costs and optimize processes – good reasons to opt for CoIP. Infineon’s INCA-IP solution brings us added flexibility and advanced features to meet customer Quality of Service requirements and reduce total system cost for toll-grade quality CoIP terminals.”

VoIP technology converts voice calls into packets of data for transmission using Internet Protocol. By treating voice calls as just another type of data on the network, manufacturers can design systems with capabilities such as advanced messaging and call forwarding to automatically follow individual users to different phone terminals. These and other “intelligent phone” features are fueling steady market growth.

According to market forecasts by In-Stat/MDR, shipments of IP phones in just the United States will grow from approximately one million units in 2001 to nearly three million in 2006.

VoIP also presents challenges in managing the voice quality at the terminal and assuring that the voice packets are recognized for priority handling and transportation across packet-switched networks. Infineon’s INCA-IP chip integrates advanced features to manage both tasks, such as integrated voice codecs, advanced echo cancellation, and voice packet prioritization. VoIP technology also makes the telephone a networked computing device, so the INCA-IP chip includes hardware support for the DES, 3DES and AES encryption algorithms needed to protect the IP phone network from “hacking” attacks.

“We are very pleased that the INCA-IP chip has already been selected by a global leader of real time communications. INCA-IP provides a solid platform in a growing market and raises the standard for performance by bringing security to the IP telephony market,” said Christian Wolff, Vice President of Infineon’s Wireline Communications Business Group and General Manager of the Access Business Unit. “Digital voice terminals require tight integration of analog phone expertise and digital design to achieve excellent voice quality, and high-volume manufacturing capability to optimize cost. With our long history as a leading supplier of telephony IC solutions, Infineon is strongly positioned to lead this emerging market segment.”

About INCA-IP

Designed for IP phone systems with hands-free microphone, conference loudspeaker, handset and headset inputs, the INCA-IP has a fully integrated Analog Front End and Digital Signal Processor (DSP) to handle all standard phone functions. An on-board 32-bit MIPS™ processor controls the phone operation and supports all software applications for the phone’s features. The chip integrates complete Ethernet/ Fast Ethernet capability for plug-in directly into a network connection and support for new wireless phone headsets.

The INCA-IP is fully compliant with the IEEE standard “Power over LAN” and ITU standard voice coding techniques – including G.711, G.723, G.729 A/B and G.722 – for IP phone applications, as well as advanced telephony features such as Caller-ID and speech recognition. The chip can be used in both SIP and H.323 “ready” terminals and is fully compliant with the voice packet prioritization and port grouping VLAN standards (802.1Q and 802.1p).

The INCA-IP comes in an P-LBGA-324-3 package and is available now at sample quantity pricing of $25. System evaluation boards and toolkits to support software application development also are available. More information, including a product brief, is available on the web at www.infineon.com/inca-ip.

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 the 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.