Infineon to sell Wireline Communications Business to U.S. Investor

Neubiberg, Germany – July 7, 2009 – Infineon Technologies AG announces it has agreed to sell its Wireline Communications (WLC) business to an affiliate of U.S. based investor Golden Gate Capital for Euro 250 million. The contracts were signed today. This transaction means Infineon will focus in future on four segments: Automotive (ATV), Industrial & Multimarket (IMM), Chipcard & Security (CCS) and Wireless Solutions (WLS). In making this move, Infineon can concentrate its resources more closely on growth and leadership in these four market segments. The transaction will significantly improve Infineon’s financial situation. Closing is expected in autumn 2009.

“The divestiture of the WLC segment is an important step in our overall refinancing process. Furthermore, our stronger focus enables us to expand our leading technological position in the three key sectors energy efficiency, communications and security”, says Peter Bauer, CEO of Infineon Technologies AG. As the Wireline Communications segment is relatively independent from the working and production processes of the company as a whole, the carve-out will involve reasonable effort.

"WLC is well positioned to stand on its own feet. With the financial backing of Golden Gate Capital, we are well positioned to continue our investment in innovative broadband products for our customers, and therefore benefit from growth opportunities in the market,” says Christian Wolff, designated CEO of the new company. Wolff has led the division for many years, and has also held leading positions in the Wireline segment for 14 years.

“Golden Gate Capital is extremely excited to be partnering with Wireline management to build upon the advanced technologies, innovative products, and collaborative customer relationships that make Infineon Wireline a leader in its markets,” says John Knoll, Managing Director of Golden Gate Capital.

Over the past few years, Infineon’s Wireline Communications segment has succeeded in continuously increasing its worldwide market share which is currently more than 20 percent. As a result, WLC is number one in the target market of broadband access solutions. Leading carriers worldwide use WLC products to offer VoIP telephony services, fast Internet connections and interactive services via DSL. Despite the economic downturn, the segment achieved a positive result in the past few quarters.

All products, locations and development projects will be continued by the new company. Around 800 patent families will be transferred. As a consequence, continuity for customers is ensured in every respect.

Employment contracts for approximately 600 WLC employees will be transferred to the new company. Furthermore, an estimated 300 employees from Infineon central functions who already work on behalf of the WLC segment today are also designated to join the new company.

Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, communications, and security. In the 2008 fiscal year (ending September), the company reported sales of Euro 4.3 billion with approximately 29,100 employees worldwide in continuing operations. 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 (ticker symbol: IFX) and in the USA on the over-the-counter market OTCQX International Premier (ticker symbol: IFNNY).
Further information is available at www.infineon.com.  

About Golden Gate Capital
Golden Gate Capital is a San Francisco-based private equity investment firm with approximately $9 billion of capital under management. The firm's charter is to partner with world-class management teams to make equity investments in situations where there is a demonstrable opportunity to significantly enhance a company's value. The principals of Golden Gate have a long and successful history of investing with management partners across a wide range of industries and transaction types, including corporate divestitures, leveraged buyouts, and recapitalizations.
For more information, visit www.goldengatecap.com.  


D I S C L A I M E R
This press release includes forward-looking statements about the future of Infineon's business. These forward-looking statements are subject to a number of uncertainties, including broader economic developments, including the duration and depth of the current economic downturn; the successful completion and implementation of the sale of our Wireline business; and the other risk factors described in the "Risk Factors" section of the annual report of Infineon on Form 20-F filed with the U.S. Securities and Exchange Commission on December 29, 2008.

As a result, future developments could differ materially from those contained in or suggested by these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Infineon does not undertake any obligation to publicly update or revise any forward-looking statements in light of developments which differ from those anticipated.