Qimonda Achieved Strong Earnings Improvement in Q1 Financial Year 2007: EBIT up 16 Percent and Net Income up 13 Percent Quarter over Quarter.

MUNICH, Germany -- Qimonda AG (NYSE: QI) today announced the results for the first quarter of its financial year (FY) 2007, which ended December 31, 2006. Qimonda achieved net sales of Euro 1.17 billion in the first quarter of FY 2007, an increase of 73 percent year over year and a slight decrease of 5 percent quarter over quarter. First quarter FY 2007 EBIT improved 16 percent to Euro 250 million compared to an EBIT of Euro 215 million in the fourth quarter of FY 2006 and an EBIT loss of Euro 123 million in the first quarter of FY 2006. Net income increased to Euro 177 million or earnings per share (basic and diluted) of Euro 0.52 compared to Euro 156 million and earnings per share of Euro 0.48 in the prior quarter and compared to a net loss of Euro 127 million in the first quarter of FY 2006 or loss per share of Euro 0.42.

"We achieved another strong earnings performance in the last quarter and maintained our high level of non-PC bit-shipments significantly above 50 percent," said Kin Wah Loh, President and CEO of Qimonda. "We were also able to further increase productivity with more than 50 percent of our total capacity now converted to technologies with feature sizes of 90nm and below."

The slight decline in net sales quarter over quarter was due to a lower bit-shipment level and a weaker US-dollar compared to the previous quarter. Overall bit-shipments increased by 64 percent year over year and declined by 3 percent quarter over quarter. 38 percent of Qimonda's net sales in first quarter FY 2007 were generated in North America, 20 percent in Europe, 31 percent in Asia Pacific and 9 percent in Japan.

Qimonda's improvement of its gross margin and net income quarter over quarter was mainly due to continued product portfolio optimization, relatively stable average selling prices, reduction in operating expenses and further productivity improvements. Year-over-year profitability increased significantly due to an improved pricing environment compared to a weak pricing for DDR2 memories a year ago. Profitability improvement year over year was also driven by substantially higher bit-shipments and strong progress in product diversification into non-PC applications.

Qimonda's strong earnings performance also strengthened the company's balance sheet. With cash flow from operations of Euro 438 million, the net cash position at the end of the first quarter FY 2007 improved to Euro 819 million and the gross cash position to Euro 1.2 billion. The company had capital expenditures of Euro 221 million, mainly for the further expansion of its 300mm wafer manufacturing facility in Richmond as well as for equipment upgrades for the further conversion towards next generation 75nm DRAM technology. Based on its strong cash flow development and specific customer demand, Qimonda plans to pull-in about Euro 150 million of capital spending from financial year 2008 to further accelerate productivity improvements and production capacity. The additional capital spending is expected to be financed out of the company's cash flow and is planned to be used mainly for a faster ramp-up of its 300mm capacities at Richmond. Capital spending for the full financial year 2007 is now expected to range between Euro 900 million and Euro one billion.

Outlook second quarter and financial year 2007

Qimonda expects its bit production to grow between 8-12 percent in the second quarter of the 2007 financial year. The company expects this bit growth to be based on improved productivity as a result of the continued conversion of capacities to 90nm technology and below. Qimonda also expects to maintain its share of bit-shipments to non-PC applications significantly above 50 percent in the next quarter.

For the full year, Qimonda expects bit demand to be driven by the continued strong growth for DRAM in consumer and communication applications and also by the introduction of the Windows Vista operating system. The company expects the market measured in bits to grow between 55 and 65 percent, in line with most market analyst expectations like Gartner and iSuppli for calendar year 2007. Qimonda intends to increase bit production in line with overall market growth.

Unaudited Financial Information

Attached is Qimonda's unaudited financial information for the first quarter of its 2007 financial year, which ended December 31, 2006. This financial information includes reconciliations of the non-US GAAP financial measures EBIT and net cash position to net income and gross cash position, which are the closest measures prepared in accordance with US GAAP. Financial information as of dates before and for periods beginning before May 1, 2006 are derived from Qimonda's combined financial statements prepared in accordance with its carve-out from Infineon, effective on that date.

Conference Call

The company will host a conference call today at 4:30pm EST, 1:30pm PST, 9:30pm GMT, and 10:30pm CET to discuss its financial results. The web cast and slide presentation will be available at www.qimonda.com. A webcast replay will be available for a limited time on the company's web site. An audio replay of the conference call will also be available at phone number [phone] (US), [phone] (UK), [phone] (Germany), pass code: 2494823#, beginning at 6:30pm EST today and continuing until 5:59pm EST on January 27, 2007.

About Qimonda

Qimonda AG is the second largest global supplier of DRAM memory products (ranking first nine months of the calendar year 2006 according to the industry research firm Gartner Dataquest). Following the carve out from Infineon Technologies AG on May 1, 2006, Qimonda went public at the New York Stock Exchange on August 9, 2006. The company generated net sales of [euro]3.81 billion in its 2006 financial year and has approximately 12,000 employees worldwide. Qimonda has access to five 300mm manufacturing sites on three continents and operates five major R&D facilities, including its lead R&D center in Dresden. The company is a leading supplier of DRAM products to PC and server manufacturers and is increasingly focusing on products for graphics, mobile and consumer applications as well using its power saving trench technology. Further information is available at www.qimonda.com.

Disclaimer

This press release may contain forward-looking statements based on assumptions and forecasts made by Qimonda management and third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and you should not place too much reliance on them. These forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any of them in light of new information or future events. These forward-looking statements involve inherent risks and 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, and 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 other factors. We caution you that these and a number of other known and unknown risks, uncertainties and other factors could cause actual future results or outcomes to differ materially from those expressed in any forward-looking statement. These factors include those identified under the heading "Risk Factors" in our annual report on Form 20-F for our fiscal year ended September 30, 2006, available without charge on our website and at www.sec.gov.

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