Infineon and Chartered Expand Development Collaboration with 65nm Manufacturing Agreement.

MUNICH, Germany & SINGAPORE -- Infineon Technologies AG (NYSE:IFX)(FWB:IFX) and Chartered Semiconductor Manufacturing (NASDAQ: CHRT and SGX-ST: Chartered) today announced they have signed an agreement for the manufacturing of 65 nanometer (nm) logic products. Infineon will have Chartered manufacture low-power mobile-phone products, with initial prototypes expected in the first quarter of 2006 and production scheduled to begin in the fourth quarter of 2006.

This announcement builds on the joint 65nm technology development efforts between IBM, Infineon, Chartered and Samsung. Today's agreement with Chartered enables Infineon to participate at the cutting-edge of technological development in the semiconductor industry without having to invest in new manufacturing capacity. Infineon retains the flexibility to evolve its production skills in response to future market developments.

"Infineon has decided to have the 65nm technology, developed together with Chartered, IBM and Samsung, produced by Chartered in order to further expand its leading position in customized products while achieving profitable growth," said Dr. Wolfgang Ziebart, President and CEO of Infineon Technologies AG. "The traditional positioning of semiconductor companies along the entire value chain from development through to production and sales for logic products is in the process of changing and is therefore subject of optimizing capital investment and business development."

"Chartered and Infineon already have a strong development and manufacturing alliance, and this is an exciting next step," said Chia Song Hwee, President and CEO of Chartered. "As a joint development alliance, Chartered, Infineon, IBM and Samsung are realizing significant economical and technological advantages by pooling resources and broad expertise. In this latest step, Infineon will benefit from a seam-less transition from development to manufacturing with one of its development partners, leveraging the manufacturing flexibility Chartered offers. Infineon can continue to focus on differentiating itself through development of low-power and customized products, while Chartered provides a reliable and cost-effective outsourcing solution to address Infineon's manufacturing needs."

During the next few months, employees from Infineon sites in Europe and the U.S. will deploy to Chartered to ensure the seamless integration of the process technology into Chartered's 300-millimeter facility, Fab 7. Meanwhile, more than 200 engineers from the four participating joint development companies continue to work together on the development of next-generation technologies, including 45nm, in East Fishkill, New York.

About Chartered

Chartered Semiconductor Manufacturing (Nasdaq: CHRT, SGX-ST: CHARTERED), one of the world's top dedicated semiconductor foundries, offers leading-edge technologies down to 90 nanometer (nm), enabling today's system-on-chip designs. The company further serves the needs of customers through its collaborative, joint development approach on a technology roadmap that extends to 45nm. Chartered's strategy is based on open and comprehensive design enablement solutions, manufacturing enhancement methodologies, and a commitment to flexible sourcing. In Singapore, the company operates a 300mm fabrication facility and four 200mm facilities. Information about Chartered can be found at http://www.charteredsemi.com.

About Infineon

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for automotive, industrial and multi-market sectors, for applications in communication, 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 2004 (ending September), the company achieved sales of Euro 7.19 billion with about 35,600 employees worldwide. 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.

Safe Harbour Statement Chartered

This press release contains forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, including without limitation, statements relating to the expected dates of our prototype and volume production 65 nm wafers, and the deployment of employees from Infineon to Fab 7 over the next few months, reflect our current views with respect to future events, and are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated. Among the factors that could cause actual results to differ materially are: changes in market outlook and trends, specifically in the foundry services and consumer, computer and communications markets; demands from our major customers, excess inventory and life cycles of specific products; competition from other foundries; unforeseen delays or interruptions in our plans for our fabrication facilities; the performance level of and technology mix in our fabrication facilities; our progress on leading edge products; the successful implementation of our partnership, technology and supply alliances; the timing and rate of the semiconductor market recovery; economic conditions in the United States as well as globally and the growth rate of fabless companies and the outsourcing strategy of integrated device manufacturers. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained. In addition to the foregoing factors, a description of certain other risks and uncertainties which could cause actual results to differ materially can be found in the section captioned "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2004 and the Company's Prospectus Supplement dated July 29, 2005 filed with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.