Ad-hoc | 24 January 2006 07:31

Infineon Technologies AG: Results for first quarter of financial year 2006

Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— Infineon reports results for the first quarter of the 2006 financial year and provides outlook for the second quarter. FIRST QUARTER 2006 RESULTS (October 1 to December 31, 2005) In Euro million Q1 FY2006 Q4 FY2005 +/- Q1 FY2005 +/- Revenues 1,674 1,731 -3% 1,816 -8% Ebit -122 -43 — 211 — Net income -183 -100 -83% 142 — Earnings per share (EUR) -0.25 -0.14 -79% 0.19 — Munich, Germany, January 24, 2006. First quarter revenues were Euro 1.67 billion, down 3 percent sequentially, primarily driven by a strong decrease in average selling prices of DDR2 memories in the Memory Products segment. Revenues in the Automotive, Industrial and Multimarket segment as well as in the Communication segment increased sequentially. Net loss in the first quarter was Euro 183 million compared to a net loss of Euro 100 million in the prior quarter. Loss per share was Euro 0.25, compared to a loss per share of Euro 0.14 in the previous quarter. First quarter EBIT loss increased to Euro 122 million from an EBIT loss of Euro 43 million in the prior quarter. This primarily reflects an EBIT decrease in the Memory Products segment as a result of the strong decline in average selling prices and higher cost-per-bit. Combined, the logic segments posted positive EBIT. OUTLOOK FOR THE SECOND QUARTER OF THE 2006 FINANCIAL YEAR In the second quarter of the 2006 financial year, Infineon expects combined revenues in the logic segments to remain broadly stable and EBIT to decline compared to the first quarter. In its Memory Products segment, the company expects to increase its bit production by more than 20 percent based on additional capacities. Infineon will continue the phase-out of production at its Munich-Perlach facility, construction of its new production site in Kulim, Malaysia, and ramp-up of its 300-millimeter production facility in Richmond. Additional details concerning the outlook can be found in the segments’ section. BUSINESS GROUP’S OUTLOOK FOR THE SECOND QUARTER OF THE 2006 FINANCIAL YEAR Automotive, Industrial and Multimarket: Infineon expects the Automotive, Industrial and Multimarket segment’s revenues to increase slightly in the second quarter of the 2006 financial year, and anticipates a decline in EBIT compared to the first quarter. The company expects increased revenues in its automotive and security and chipcard businesses, but a seasonal decline in demand for industrial semiconductors. The EBIT decline in the second quarter is expected to be primarily driven by a planned increase in research and development expenses for automotive as well as a seasonal decline in the industrial power management and ASIC & Design Solutions businesses, which are to some extent related to the computing and consumer segment. In addition, the segment’s EBIT will continue to be impacted by planned expenses for the phase-out of production at the Munich-Perlach facility and by increasing start-up costs for the new production site in Kulim, Malaysia. Communication: In the second quarter of the 2006 financial year, the company expects revenues of its Communication segment to decline compared to the first quarter due to seasonal weakness in the wireless industry. The company expects the segment’s EBIT loss to increase in the second quarter, as previously implemented improvements of cost structures leave operating results to be driven predominantly by revenue development. Memory Products: In the second quarter of the 2006 financial year, Infineon expects to increase its bit production by more than 20 percent based on additional capacities at its 300-millimeter production facility in Richmond and from silicon foundries. The company also anticipates higher bit shipments than in the previous quarter. Infineon Technologies AG St.-Martin-Str. 53 81669 München Deutschland ISIN: DE0006231004 (DAX) WKN: 623100 Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart; NYSE End of ad hoc announcement (c)DGAP 24.01.2006 Issuer’s information/explanatory remarks concerning this ad hoc announcement: “We are on track with our restructuring measures. In our segment Communication and in our security and chipcard business, we were able to reduce the EBIT loss in the first quarter, leading to a combined positive EBIT of the logic segments,” said Dr. Wolfgang Ziebart, CEO and President of Infineon Technologies AG. D I S C L A I M E R This discussion includes forward-looking statements about our future business. These forward-looking statements include statements relating to future developments of the world semiconductor market, especially the market for memory products, Infineon’s future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization of our production capacity, the introduction of new technology at our facilities, the transitioning of our production processes to smaller structure sizes, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, and our ability to achieve our cost savings and growth targets. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, the outcome of antitrust investigations and litigation matters, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements. Infineon, the stylized Infineon Technologies design are trademarks and service marks of Infineon Technologies AG. All other trademarks are the property of their respective owners. End of message (c)DGAP