ZTE Selects Infineon's Integrated Voice and ADSL2+ Data Solutions to Address the Growing Demand for Telephony and Broadband Access in China.

MUNICH, Germany -- ZTE Corporation, one of the largest supplier of data- and telecommunications systems in China, selected the ADSL2/ADSL2+ GEMINAX MAX and VINETIC chipsets of Infineon Technologies (NYSE:IFX)(FWB:IFX) for its Multi-Service Access Network (MSAN) line card. ZTE's new ZXA10-SU2 MSAN single line card provides integrated voice and ADSL2+ data (IVD) services eliminating the need for separate solutions. Service providers will benefit from the integrated system solution and consequently reduced costs for installation and maintenance.

"Multi-Service Access Platforms require multiple technologies to be offered from the same platform," said Xu Ming, General Manger at ZTE. "China is still deploying POTS, or 'plain old telephone system,' lines at a 20 percent growth rate. With a strong DSL demand, which is expected to grow to 15-20 million lines next year it is only natural that both the POTS and DSL services should be offered from the same line card. Our single line card will enhance 'green-field' installations in China."

Infineon's GEMINAX MAX fully supports the latest international standards for ADSL, ADSL2, and ADSL2+. Combined with the VINETIC voice processor, it provides a modular hardware platform for line cards supporting IVD, with an optional, seamless Voice-over-Packet (VoP) functionality. By utilizing Infineon's integrated splitter technology the need for external splitters and extra cabling that has been traditionally required to implement a combination of ADSL and POTS line cards are eliminated, thereby reducing the overall bill of materials and maintenance cost. The line card offers 16 POTS and ADSL channels and allows greater and more efficient use of new and existing infrastructure.

"The demand for IVD is growing, and integrated voice and data services will demand the capabilities of next-generation DSL technology, such as ADSL2+," said Henry Goldberg, Analyst at Industry Research Firm In-Stat/MDR. "We project that the compound annual growth rate of all types of DSL ports through 2008 will be 20.3 percent, with a 40 percent growth in 2004. ADSL in all its versions currently accounts for 94 percent of those port shipments, and we anticipate that it will continue to be the dominant form of DSL through 2008, with ADSL2+ becoming the most-deployed version."

"As Telcos and ISPs move to adopt business models that combine packet voice with increasingly high speed DSL services, we provide our customers with single, market-proven platform to shorten their time to market and reduce development costs," said Christian Wolff, Vice President, Wireline Communications Business Group and General Manager, Access Business Unit at Infineon Technologies.

Infineon was also selected by ZTE as a strategic partner to deliver Resilient Packet Ring solutions for use in MAN and WAN equipment to its carrier customers in the first quarter of 2004.

The new ZXA10-SU2 MSAN ADSL2+ IVD line card will be on display at the Infineon booth (# 12347) at the SUPERCOMM tradeshow in Chicago, June 20 - 24, 2004.

Further information is available at: www.infineon.com/adsl.

About ZTE

ZTE Corporation is China's largest listed telecommunications equipment manufacturer specializing in providing customized network solutions for telecom carriers worldwide. The company develops and manufactures telecommunications equipment for fixed, mobile, data and optical networks, intelligent networks and next generation networks. ZTE has been listed on the Shenzhen Stock Exchange since 1997. For more information about ZTE, please visit www.zte.com.cn.

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 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 at http://www.infineon.com/news.