Infineon Broadens Availability of Embedded Flash Process

Neubiberg, Germany – December 20, 2007 – Infineon Technologies (FSE/NYSE: IFX) today announced an agreement with IBM to broaden the availability of Infineon’s proven, high-volume Embedded Flash process. Infineon’s 130nm Embedded Flash technology will be licensed to IBM and will be available for new chip designs manufactured by IBM in North America. Additionally, Infineon will utilize IBM foundry services for future products based on this process.

The Infineon 130nm Embedded Flash process, which has been in volume production at Infineon plants since early 2006, is used for advanced microcontroller chips across applications ranging from automotive systems to low-power chip card devices. Along with related Non-Volatile Memory (NVM) intellectual property also licensed to IBM, the 130nm Embedded Flash process expands IBM’s foundry capability to address applications requiring custom logic and high-density flash memory on a single chip.

“We are pleased to extend our long history of collaboration and technical development with IBM through this licensing and foundry agreement,” said Peter Bauer, Member of the Management Board, Executive Vice President, Head of Automotive, Industrial & Multimarket business group at Infineon Technologies. “With this collaboration, Infineon leverages the value of its own manufacturing IP, gains a new source for volume manufacturing, and strengthens our working relationship with a long-term partner.”

“We are broadening our semiconductor-offering portfolio by collaborating with Infineon, one of the world leaders of Embedded Flash technology,“ said Steve Longoria, Vice President for Semiconductor Solutions, IBM Global Engineering Solutions. “This licensing agreement leverages our current technology base and complements our analog and mixed signal expertise.”

Integration and qualification of the process in IBM’s 200mm semiconductor fab in Burlington, Vermont, has already begun, and preliminary design kit availability is planned for the second half of 2008.

Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, communications, and security. In the 2007 fiscal year (ending September), the company reported sales of Euro 7.7 billion (including Qimonda sales of Euro 3.6 billion) with approximately 43,000 employees worldwide (including approximately 13,500 Qimonda employees). With a global presence, Infineon operates through its subsidiaries in the U.S. from Milpitas, CA, in the Asia-Pacific region from Singapore, and in Japan from Tokyo. Infineon is listed on the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX).