MUNICH -- Infineon Technologies (FSE/NYSE: IFX), the world’s sixth largest semiconductor manufacturer, has made good use of the mild recovery in the semiconductor market in 2003 to increase sales in all segments. Revenues for fiscal year 2003 increased 26 percent over the previous year to Euro 6.15 billion. “Infineon was therefore the fastest growing of the world’s ten largest semiconductor companies in the last fiscal year,” explained Dr. Ulrich Schumacher, President and CEO of Infineon Technologies AG, at the company’s fourth Annual General Meeting. “We made great strides toward improving our result over the last year. Having experienced nine successive quarters of losses, we finally managed to achieve profitability in the fourth quarter of fiscal year 2003 - a result we attribute to the consistent implementation of our growth strategy and our Impact² program to increase productivity.”

The market recovery in the semiconductor industry over the last few months, which is evident chiefly in the form of increased global demand for chips, has also had a positive impact on the Infineon share price and the company’s financial situation. The Infineon share recorded a 100 percent increase in fiscal year 2003. The company’s market capitalization thus also doubled over the period to stand at Euro 7.9 billion at December 31, 2003. The company had a gross cash position at the end of fiscal year 2003 of Euro 2.8 billion, leaving it adequate scope to finance future internal and external growth.

Results for fiscal year 2003

Revenues in fiscal year 2003 were up 26 percent year-on-year to Euro 6.15 billion. The net loss improved to Euro 435 million from Euro 1.02 billion in fiscal year 2002. EBIT (earnings before interest and taxes) in fiscal year 2003 amounted to minus Euro 299 million, which represents a significant improvement from minus Euro 1.14 billion in fiscal year 2002. The loss per share (basic and diluted) improved to Euro 0.60 in fiscal year 2003 from Euro 1.47 in fiscal year 2002. “Despite falling prices for memory products and the sustained pressure on prices in most other segments, all of our business groups were able to contribute to the clear revenue increase and to grow with a double-digit percentage,” remarked Dr. Schumacher.

Regional growth strategies implemented

The Agenda 5-to-1 objectives set out in 2002 committed Infineon to strengthening its position in the semiconductor industry’s key growth markets of China, Japan and North America. The company accordingly made a particular effort during 2003 not only to increase sales in the relevant regions, but also significantly to step up its local involvement.

Infineon grew sales in China by 30 percent in fiscal year 2003, compared to an increase of 21 percent in fiscal year 2002. The opening of the new headquarters in Shanghai in September 2003 represents a significant milestone in the company’s China strategy. Infineon has constructed a shared facility for the assembly and testing of memory chips in Suzhou in a joint venture with China Singapore Suzhou Industrial Park Venture (CSVC). The company has also expanded its production in Wuxi and opened a new Design Center in Xi’an. Infineon is already able to offer the full value chain within China for many products and collaborates directly with business partners and customers on the local level at every stage from design and development to production and assembly and even software development.

Infineon has also strengthened its sales and service structure in the North American semiconductor market. Two completely new sites in Cary, North Carolina, and New York came on stream during fiscal year 2003. The North Carolina office is located in the Research Triangle Center close to Cary and hosts marketing, sales and development functions, while the New York office functions primarily as a central point of contact for analysts, investors and journalists.

Infineon Technologies AG