Infineon Expands China Operations and Sets Up New IC Design Center in Xi'an.

Business Editors/High-Tech Writers

XIAN, China--(BUSINESS WIRE)--Jan. 15, 2004

Infineon Technologies (FSE/NYSE: IFX) today announced the establishment of its latest IC Design Center and new subsidiary - Infineon Technologies Xi'an Co., Ltd - in Xi'an, China. This represents another move of the company's steady business expansion and long-term presence in the Chinese market. Strategically located at Xi'an High-Tech Park, the new IC Design Center plays a vital role for integrated circuit design for all of Infineon's business groups, with the primary focus on developing innovative applications for communications as well as for automotive and industrial electronics. The new IC Design Center will enable Infineon to better serve the customers' needs and to harness the R&D talents in Western China to foster greater technology innovation.

"The opening of our Xi'an center is a testimony of our continued investment and long-term commitment to our China operation. In line with our China strategy, we are intensifying our investments and technology development capabilities in Western China," explained Loh Kin Wah, President of Infineon Technologies Asia Pacific Ltd and Chairman of Infineon Technologies China Co., Ltd., "Infineon will tap on the conducive environment, excellent infrastructure as well as the ecosystem of high-tech companies in the Park to strengthen our competitive edge."

Headed by Jean-Loup Leclere, General Manager of Infineon Technologies Xi'an Co Ltd, more than 1,000 employees are expected to join the Xi'an R&D Center by 2007, which will make it one of the largest IC design centers in Asia. This is in keeping with the overall expansion plan to increase the company's headcount to more than 3,000, in order to attain the ambitious goal of being among the top four semiconductor companies in China in the next four years.

"China is a dynamic market full of business opportunities and excellent R&D talents. We believe that our Xi'an IC Design Center will be one of the company's major driving forces for our future technology development." said Dr. Werner Mohr, Senior Vice President Corporate Logic, at Infineon Technologies.

Headquartered in Shanghai, Infineon Technologies China has already set up full operational, production and R&D competencies. Its presence in Xi'an and the following startup of its Xi'an IC Design Center will be of long-term strategic significance for strengthening the company's entire value chain and the talent pool and reserve in China. Infineon last year announced plans to invest more than US $ 1.2 billion in China within the next years.

To further foster local talents, Infineon is co-operating closely with two universities in Xi'an. Together with Xidian University the company will collaborate to develop a National IC Talent Incubation Base. Scholarships and training laboratories will also be set up by Infineon and Xi'an Jiaotong University and Xidian University.

Infineon in China

Infineon Technologies (China) Co Ltd is headquartered in Shanghai and has over 800 employees. With offices in six major cities, Infineon has established a full value chain in China and is well-positioned to deliver a wide range of semiconductor products and solutions to all local and global customers from here. In addition, it also has a sales and marketing support centre in Beijing, backend manufacturing plant for logic products in Wuxi, IC Design Centre in Xi'an, as well as Centres of Competence for chipcard and secure mobile solutions in Shanghai.

Strategic collaboration with local partners for both frontend and backend production is one of the key cornerstones of Infineon's expansion strategy in China. In March 2003, Infineon has expanded its successful production cooperation for standardmemory chips (DRAMs) with SMIC, Shanghai. In July 2003, Infineon Technologies Suzhou Co. Ltd., was set up as its latest joint venture with China-Singapore Suzhou Industrial Park Venture Co. Ltd.

About Infineon

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for the automotive and industrial sectors, for applications in the wired communications markets, secure mobile solutions as well as memory products. With a global presence, Infineon operates in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In fiscal year 2003 (ending September), the company achieved sales of Euro 6.15 billion with about 32,300 employees world- wide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at www.infineon.com.

This news release is available online at http://www.infineon.com/news/

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