INFINEON AND SONY TO COOPERATE ON CONTACTLESS CHIP CARD ICS.

Infineon Technologies (FSE/NYSE:IFX), a supplier of chip card integrated circuits (ICs), and Sony Corporation will jointly develop secure integrated circuits (ICs) for contactless chip card systems. Combining Sony's contactless chip card technology "FeliCa", which is based on Type C, and Infineon's expertise in secure chip card ICs, the agreement will expand the contactless chip card market including multi-application cards, card terminals and background infrastructure systems for data management. The jointly developed ICs are targeted to be available by the end of 2002. These ICs will be integrated as dual interface chips, which have both contact and contactless interfaces.

The cards combine authentication and identification with the stringent requirements for fast authorization in access applications, such as electronic tickets in public transport, company or government issued ID cards, and banking cards. Based on their encryption and decryption functionality, the cards enable secure and reliable transactions.

Infineon estimates the worldwide market for chip cards to reach up to 4.5 billion cards in 2006, about 25 percent of which equipped with contactless technology. According to market research company Gartner Dataquest, worldwide chip card shipments totaled about 1.8 billion units in the year 2000.

Today, already more than 25 million contactless chip cards based on Sony's FeliCa technology have been shipped globally. About 11 million contactless chip cards -- currently equipped with on-card-memory -- have been shipped in Hong Kong for public transport systems such as subway, bus and ferry. Japan Railway East will use FeliCa cards in about 400 stations in the Tokyo metropolitan area, starting from this month.

"Market success of contactless chip card applications depends on the ability to provide complete solutions. Combining Sony's system know-how with Infineon's expertise in secure semiconductor solutions and manufacturing processes will provide the benchmark for contactless technology of the future," said Dr. Hermann Eul, senior vice president and general manager of the Security & Chip Card ICs Business Group of Infineon Technologies. "This agreement enables complete system solutions paving the way for powerful chip cards that combine multiple applications such as public transportation services, electronic purse systems and identification, as well as best-price loyalty programs."

"I am delighted that Sony and Infineon have reached this agreement to jointly develop chips which introduce Sony's Type C contactless chip card technology. Our cooperation will result in the application of this technology in transport systems, as well as in the finance and administrative fields. We also plan to offer many new access-modes for Sony's FeliCa as a key network device for the future," said Hiromasa Ohtsuka, President of Sony's Broadband Network Center.