Infineon begins to reap the fruits of its development of 300 millimeter technology: future investments ratio targeted at about 13 percent of sales compared to about 15 percent so far - Higher free cash flow enables Infineon to increase the dividend by between four and six cents per share as early as the 2014 fiscal year

Neubiberg, May 6, 2014 – With effect from the 2015 fiscal year, Infineon Technologies AG intends to reduce its target ratio of investments to revenue over the cycle from the current about 15 percent to about 13 percent.

Even with the reduced capital intensity, it will still be possible to achieve the targeted average revenue growth rate of approximately 8 percent p.a. over the cycle. The reduction of the target ratio for investments as a percentage of revenue is being driven primarily by the following factors:

• Infineon is beginning to reap the fruits of 300-millimeter thin-wafer technology for power semiconductors, enabling it to achieve growth with a substantially lower level of capital employed compared with 200-millimeter wafers. The level of investments required to increase manufacturing capacities for power semiconductors in order to achieve the targeted growth rate is therefore decreasing.
• Infineon is also in the early stages of a growth curve for products manufactured using standard-CMOS-based technologies with 65-nanometer and lower process structures. Unlike with power semiconductors, these technologies do not entail any major differentiating features from a manufacturing perspective and, as a result, Infineon intends to outsource the relevant production volumes to contract manufacturers, thus obviating the need in future to invest in in-house facilities to process these wafers.
• The Company intends to allocate a greater share of backend manufacturing to subcontractors for those package types that offer no meaningful differentiation. Similarly, unlike in-house production, this will not involve any investment.
• Great strides have been made over the course of the 2014 fiscal year to date to improve both current and future productivity by means of a whole raft of measures implemented in conjunction with a dedicated productivity improvement program. This enables higher production volumes for a given amount of capital investment.

A detailed analysis of the medium- to long-term impact of these factors, undertaken as part of the annual planning process, showed that the target ratio for investments to revenue can be reduced in future fiscal years by 2 percentage points to an average of about 13 percent over the cycle.

In view of the expected sustainable improvement in free cash flow, it is planned to increase the dividend significantly from as early as the current financial year. Subject to there being an appropriate level of unappropriated profit available for distribution and the corresponding resolutions being taken by Infineon's representative bodies, the aim is to increase the dividend by between four and six cents.

"Infineon is determined to ensure excellent product availability and to grow faster than its competitors. The fact that we will need to employ less capital in future to achieve this, clearly demonstrates that we are on the right track with our manufacturing strategy", stated Dr. Reinhard Ploss, CEO of Infineon Technologies AG. "It is justified that shareholders should also now benefit from the progress made. Therefore it is our intention to raise the dividend significantly for the current fiscal year."

D I S C L A I M E R

 This announcement contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group.

These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected.

Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.

Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, mobility, and security. In the 2013 fiscal year (ending September 30), the Company reported sales of Euro 3.84 billion with around 26,700 employees worldwide. 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