X-FAB will not acquire Infineon plant in Perlach

Joint News Release by Infineon Technologies AG and X-FAB Semiconductor Foundries AG

Munich, Germany, September 14, 2005 – During discussions in the past weeks initiated by Infineon, Infineon Technologies AG (FSE/NYSE: IFX), Munich, and X-FAB Semiconductor Foundries AG, Erfurt, concluded that X-FAB will not take over the Infineon plant in Perlach. Both X-FAB and Infineon were prepared to make concessions to continue operations at the site and safeguard jobs. After investigating the matter in depth it proved, however, that there is no long-term guarantee of running the Perlach site with economic success and preserving the jobs.

Reinhard Ploss, Group Vice President and General Manager of the Automotive, Industrial and Multimarket Group at Infineon, said, “We regret the development and would have welcomed selling the site and preserving the jobs. The discussions were very constructive and included long and intensive negotiations. Nevertheless a takeover by X-FAB was not possible due to the specific conditions in Perlach.”

Hans-Jürgen Straub, CEO of X-FAB, stated, “We would have liked to continue operating the Perlach plant as a semiconductor site and we explored the full limit of possibilities as we assessed the takeover risks in light of the objectives of X-FAB as a whole. However, the economic and structural deficits in Perlach were insurmountable.”

About X-FAB

X-FAB Semiconductor Foundries AG, headquartered in Erfurt, Germany, is an independent analog/mixed-signal foundry manufacturing silicon wafers for analog-digital integrated circuits (mixed-signal ICs) on customer order. The company maintains wafer production facilities in Erfurt (Germany), Plymouth (UK) and Lubbock, Texas (US), and employs approximately 1,100 people worldwide. Wafers are manufactured based on ultra-modern modular CMOS and BiCMOS processes with technologies ranging from 1.0 down to 0.35 micron. Main application areas are the automotive, communications, consumer and industrial sectors. For more information, see www.xfab.com.

Media Contact Infineon

Guenter Gaugler
Phone: +49 89 234 28481
Email: guenter.gaugler@infineon.com

Media Contact X-FAB

Dagmar Berendes
ThinkBold Corporate Communication
Phone: +1 408 379 2344
Email: dagmar@thinkbold.com

edicto GmbH
Sönke Knop/ Axel Mühlhaus
Phone: +49 6084 94 85-90
Email: kontakt@edicto.de

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for automotive, industrial and multimarket sectors, for applications in communication, as well as memory products. With a global presence, Infineon operates through its subsidiaries in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In fiscal year 2004 (ending September), the company achieved sales of Euro 7.19 billion with about 35,600 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.