IFX Day 2018 Dr. Reinhard Ploss Chief Executive Officer

London, 12 June 2018 We are a world leader in semiconductor solutions

Our vision We are the link between the real and the digital world.

Our values Our mission We commit We make life We partner easier, safer We innovate and greener. We perform

Part of your life. Part of tomorrow. Global megatrends underline the increasing importance of microelectronics…

Demographic & social change Climate change & resource scarcity

Urbanization Digital transformation

Competencies Energy efficiency

Mobility from Products & to Systems Security Systems

IoT & big data Technologies, Products, Software

Success is based on differentiating strategies and competencies

Q2 FY18 revenue split by segment Power represents ~2/3 of revenue

Industrial Power [% of revenue] Automotive Control (IPC) 17% Power (ATV) ~17%

30% Power Manage- ment & Multi- ~15% Sensors & RF 44% ~68% market (PMM)

Embedded 9% Chip Card & Control revenue in Q2 FY18: revenue in Q2 FY18: €1,836 incl. OOS and C&E of €1m Security (CCS) €1,836 incl. OOS and C&E of €1m

Automotive Power Management RF & Sensors Security

#1 system and One of the leading #1 in security ICs and System leader in technology player in companies in RF and leader in security automotive power #2 in sensors solutions

Success story of continuous market share gains in power

CAGR(03-16): 4.2%

CAGR(03-16): 11.0% ] 18.5% 20%

bn 18.0%

13.3%

11.9% hare

12.3% s 11.2% 11.8% 10.2%10.7% 9.4% 9.7%

8.1% 8.4% 8.5% 10%

market

Revenue [USD [USD Revenue

2,950

2,718

2,155

2,095

1,891

1,770 1,769

1,424

1,320

1,179

1,064

1,053

0,939

0,758

16,239 15,910 11,183 11,319 12,388 13,613 13,963 11,015 15,802 17,603 14,992 15,373 15,120 0 9,358 0% 2003 2005 2007 2009 2011 2013 2015 Infineon power revenue total power semiconductor market market share

Source: Based on or includes content supplied by IHS Markit, Technology Group, several reports from 2004 through 2015 and 2017 Note: No backward revision of market shares and market sizes; except for year 2015

Strength in power was the major pillar of an impressive performance on group level:

Infineon revenue CAGR(99-17) was ~9% organically and ~10% including M&A.

Revenue growth projection at constant currencies

accelerated growth 9% trendline growth

9.5% 9.1%

4.9% …

Stronger growth based on established leading positions within fast growing segments

FY15 FY16 FY17 FY18e FY19e ≥ FY20

Duration short medium long Relevance

high Infineon electro-mobility automated driving

high high Division

battery-powered applications data center – power supply / power management medium Infineon renewable energy, energy storage, distribution high Division home appliances

medium collaborative robots

embedded security powering 5G medium Division

low contactless payment government ID

Other applications in our target markets are expected to show standard growth patterns.

Cost optimized Performance optimized

Cost-performance Explore and develop Commoditization competitive in new technologies volume markets new business

high volume high differentiation

Infineon is able to address all these areas in its core markets based on differentiating competencies in ...

Product/Technology power, sensors, microcontroller and security Application power control, power supply, drives System electro-mobility, automated driving, drives, security Go-to-Market focus on growth applications, win with winners, go wider Manufacturing 300 mm thin wafer production

Business areas

Core Adjacent New area

Application

ompetencies c

Product/

Technology Differentiating

grow in scope grow in scale

Business areas

Core Adjacent New area

xEV Class D audio ADAS / AD HMI Application BPA Drives IoT

Power supply

ompetencies c

CoolMOS™ OptiMOS™ Radar Digital control ToF Product/ IGBT (RF) (XDP™, iMotion™) Lidar Technology SiC µC

Differentiating GaN Security

continue to enhancement of growth path grow in core

Customer system

Full system Algorithms functionality

Partial system Firmware functionality Software

Integration of analog Building block and digital functionality

Single function Discrete components Hardware Base technology

Examples

300 mm thin- XENSIV™ Si OPTIGA™ wafer CoolMOS™ microphone Trust X AURIX™ 3G

Routine innovation Breakthrough innovation

Broaden and maintain portfolio Prepare to address the new demands

CoolSiC™ Trench IGBT MOSFET next generation ~1998

Gesture Sensing (Soli) Safe & secure MultiCore MCU CoolMOSTM AURIX™ next generation ~2001

3D imaging Voice HMI REAL3TM ToF (XMOS) XENSIV™ Si microphone ~2008 next generation Lidar

~2008 Post-quantum cryptography

Leverages existing technical competences New technical competences

Unique 300 mm thin wafer power Compound semiconductors semiconductor manufacturing SiC and GaN

Digitalization of the power control loop Functional integration in IGBT

CoolSiC™ First commercial Launch of world's first Launch of world's SiC diode SiC trench MOSFET first trench-based Release of first hybrid SiC SiC modules power modules Start of 150 mm Manufacturing SiC manufacturing converted to 150 mm …… …… 2001 2006 2015 2016 2017

Why SiC will enter the market quickly Why SiC will take longer

System performance, e.g. Significant technical challenges ›PV: smaller, lower losses, cheaper › Defect density of substrates ›UPS: smaller, lower losses › Reliability of devices › Redesign of application ›xEV drivetrain: more mileage,

less cooling effort Significant cost challenges

Challenge Advantage ›xEV charging: smaller, lower losses › Cost and capacity of substrates › Production investment and cost

As a long-term player in SiC Infineon is set to become a leader based on substantial competencies in power technologies and applications

Performance Robustness and ease-of-use The Advantage The Challenge

adjustable switching speed enabled  ruggedness in critical modes lowest  sufficiently high threshold voltage  RDSon x A  oxide lifetime (for industrial standards) cosmic ray (if required by application)  short-circuit-withstand capability 

› SiC trench concept offers significantly better shrink potential compared to planar SiC MOSFETs. › Mastering the challenging manufacturing process is key. › Further details will be provided during the ATV and IPC sessions.

Infineon is well set-up to continue to outgrow the market based on strong differentiation and structural growth drivers.

We enhance our core competencies and add new ones to enable future growth.

Going forward, after accelerated growth of 10%+ at least in 2019, we increase our through-cycle revenue growth target from 8 to 9% per year.

Glossary

AD autonomous driving ADAS advanced driver assistance system BPA battery-powered application C&E corporate and eliminations GaN gallium nitride HMI human machine interaction IC integrated circuit ID identification IGBT insulated gate bipolar transistor IoT Internet of things lidar light detection and ranging µC microcontroller MCU microcontroller unit MOSFET metal oxid semiconductor field effect transistor OOS other operating segments RF radio frequency Si silicon SiC silicon carbide Soli Google project ToF time-of-flight xEV all degrees of vehicle electrification (EV, MHEV, FHEV, PHEV)

› since 2012: CEO, responsible for Divisions, Group Strategy, Communications & Government Relations, Human Resources, Legal, Research & Development › 2007: Member of the Mgmt Board › 2005: Head of Development and Manufacturing as well as Operational Management in the Automotive, Industrial & Multimarket (AIM) Division › 2000: President of the AIM Division

› Dr. Reinhard Ploss was born in Bamberg, Germany, in 1955. He holds a Diploma in Process Engineering from the Technical University of Munich, Germany, where he also received his PhD. › He joined Infineon (Siemens AG until 1999) in 1990.

This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group. These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected. Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.

Specific disclaimer for IHS Markit reports, data and information referenced in this document: The IHS Markit reports, data and information referenced herein (the "IHS Markit Materials") are the copyrighted property of IHS Markit Ltd. and its subsidiaries ("IHS Markit") and represent data, research, opinions or viewpoints published by IHS Markit, and are not representations of fact. The IHS Markit Materials speak as of the original publication date thereof and not as of the date of this document. The information and opinions expressed in the IHS Markit Materials are subject to change without notice and neither IHS Markit nor, as a consequence, Infineon have a duty or responsibility to update the IHS Markit Materials or this presentation. Moreover, while the IHS Markit Materials reproduced herein are from sources considered reliable, the accuracy and completeness thereof are not warranted, nor are the opinions and analyses which are based upon it. IHS Markit and the trademarks used in the data, if any, are trademarks of IHS Markit. Other trademarks appearing in the IHS Markit Materials are the property of IHS Markit or their respective owners.

London, 12 June 2018

We manufacture in-house where we can gain a strategic advantage from our leading-edge manufacturing technologies and our outstanding process expertise. This results in a differentiation potential in terms of cost and/or performance.

We work with outsourcing partners in areas where we see no differentiation to optimize our capital efficiency. We cooperate with subcontractors and foundries in order to ensure adequate capacity growth and flexibility.

› Scale matters › 300 mm power in Europe with high automation › 200 mm power expansion in Asia to benefit from labor cost advantage › Differentiating technology R&D and IP in Europe/US

Villach, Dresden, Regensburg, Kulim, Mesa, Temecula, Austria Germany Germany Malaysia USA USA

300/200/ 300 mm: 200 mm: 200 mm: Epitaxy HiRel, 150 mm: power; sensors, power, power power, GaN, 200 mm: analog/ sensors, SiC embedded mixed signal analog/ control, mixed signal integrated sensors

Manufacturing cost of 200 mm vs. 300 mm for power semiconductors

[related to physical wafers] 200 mm 300 mm

wafer size 100% 225%

raw wafer cost 100% ~280%

equipment 100% ~170%

personnel 100% ~80%

other effects 100% ~150%

relative cost per mm² 100% 70% – 80%

Key criteria for site selection New 300 mm module

› Economies of scale › Time to revenue › Geographic diversification

Building space ~60,000 m² Total frontend investment > €1.6bn over 6 years Revenue potential > €1.8bn per year Start of construction early 2019 Ready-for-equipment mid 2020 Ready-for-production early 2021 Technologies IGBT and MOSFET for all end markets

FY25's frontend set-up

FY18's frontend set-up 300 mm (already ramped in FY18) high-cost countries high-cost countries 300 mm

low-cost low-cost countries countries 300 mm (to be ramped FY18 – FY25)

› 300 mm vs. 200 mm: 20% - 30% cost advantage when fully loaded › ~6% cost advantage on frontend level › ~2.25%-points gross margin improvement excluding counter effects

2016 total market for discrete power semiconductors and modules: $15.9bn

~$2,950m*

~$1,450m Revenue potential of a ~$850m ~$800m ~$750m 300 mm fab:

~$2bn

#1 #2 #3 #4 #5 300 mm module Infineon competitor A competitor B competitor C competitor D

MOSFETs Discr. IGBTs IGBT modules others

* rounded figures; source: IHS Markit, Technology Group, "Power Semiconductor Annual Market Share Report", August 2017

Power-focused foundries represent only In the next five years, the ~15% of total foundry capacity Infineon frontend Dongbu ASMC outsourcing share will CRM, CSMC SSMC Silterra increase from ~22% to TowerJazz X-FAB XMC Founder Fujitsu Elec. JSMC ~30%; of that

Mosel Vanguard › CMOS: from ~50% HHGrace & Episil to ~70% Hua Li Others Powerchip › Power: up to ~15% & Maxchip Outsourcing share is Samsung restricted by limited TSMC capacity of most of the SMIC incl. LFoundry power-focused foundries

UMC Backend outsourcing GloFo Main focus on CMOS/CMOS-derived technologies share will increase from 23% Significant power discrete focus and business to 32%

Source: Infineon analysis based on Semi.Org, "Semi World Fab Forecast", August 2017 edition

Current investment-to-sales New investment-to-sales model model ~8% p.a. ~13% ~9% p.a. ~15% revenue investment- revenue investment- growth to-sales growth to-sales

Thereof 11% capex*, thereof: thereof 13% capex*, thereof: › 6%-pt fixed › 6%-pt fixed growth- driven › 5%-pt capacity expansion › 7%-pt capacity expansion

additionally: › Near-term: low triple-digit €m amount for potential revenue upsides and structural changes › FY19 – FY23: ~€700m for major fab and office buildings

* Infineon reports under IFRS and has therefore to capitalize development costs which represents currently ~2% of sales

Automotive segment › Strongest growth in areas with higher capital intensity and below-average outsourcing share

Equipment/refurbishment › Higher prices for equipment due to tight market situation › Limited availability of used equipment › Forced to do refurbishment of used equipment by OEM at higher prices

Structural investments › Significant expansion of SiC and GaN capacity near- and mid-term

Si › Significant expansion of capacity 300 mm › Restructuring of Si manufacturing lines (~90% of will free up capacity for SiC and GaN site capacity)

› SiC ‒ 150 mm transfer completed ‒ reuse of buildings and manufacturing lines SiC, ‒ most capex-efficient capacity expansion ‒ triple-digit €m investment in capacity GaN increase (~10% of › GaN site capacity) ‒ significant expansion of 150 mm near- and mid-term ‒ 200 mm manufacturing line in preparation

Significant capacity expansion for power semiconductors is necessary to meet growing demand and strengthen our leading position.

Outsourcing share for power is exploited. We invest into highly efficient and differentiating in-house fabs.

Increased investment-to-sales ratio is necessary to fuel our growth. This will allow Infineon to organically consolidate the power semiconductor market.

The Villach 300 mm fab is the next milestone to foster Infineon's #1 position in power semiconductors. It improves our cost position and enables growth in SiC and GaN.

Glossary

BE backend

FE frontend

GaN gallium nitride

IGBT insulated gate bipolar transistor

IP intellectual property

µC microcontroller

MOSFET metal oxid semiconductor field effect transistor

OEM original equipment manufacturer

Si silicon

SiC silicon carbide

› since 2016: COO, responsible for Manufacturing, Logistics, Quality, and Purchasing › 2008: Division President Automotive › 2007: Head of Microcontroller Business Unit

› Jochen Hanebeck was born in Dortmund, Germany, in 1968. He holds a Diploma in Electrical Engineering from the RWTH Aachen University, Germany. › He joined Infineon (Siemens AG until 1999) in 1994.

London, 12 June 2018

We identify high growth markets early focusing on lasting relations with industry leaders, growing web interactions. We jointly develop solutions optimizing system cost performance.

We aim for leading positions, balanced across applications and regions. We prioritize businesses with long platform life-times.

We provide comprehensive design-in and solution support to scale across all customer segments. We maximize reach through digital customer interface and distribution partners.

CAGR 2017 – 2022** by Semiconductor Industry Segment

Automotive 7.7% $38bn*

Industrial 7.1% $49bn*

Consumer 4.2% $40bn*

Total Semi Market 3.2% $429bn*

Data Processing 2.7% $148bn*

Chip Card ICs*** 2.5% $3.3bn*

Communications 0.8% $154bn*

* Market size in calendar year 2017 ** Source: Based on or includes content supplied by IHS Markit, Technology Group, "Worldwide Semiconductor Shipment Forecast", March 2018 *** Source: ABI Research, "Secure Smart Card & Embedded Security IC Technologies", February 2018; microcontroller ICs

ATV IPC PMM CCS

Single products Products combined Chip sets defined

To select or adjust a Products are sold in Product combinations single product to the application-specific are defined as chip set individual needs of a combinations. solution. system.

Example: Example: Example: Dedicated discrete IGBT Security chips OPTIGA™ Next-generation AURIX™ for rice cookers Trust or OPTIGA™ TPM µC comprises hardware targeting Chinese for connected cars to accelerator for 77 GHz customers. secure all important radar signal pre- domains. processing.

FY17 revenue by target application*

payment & other CCS powertrain excl. xEV government ID 3% 11% 7% CCS xEV other PMM 4% 6% 10%

industrial safety excl. ADAS 8% 12%

PMM ATV data center, 31% 43% computing 10% ADAS 2% mobile devices 7% IPC other IPC 16% comfort, 2% premium drives 14% traction MHA renewables 4% 2% 4% 4%

* based on revenue of €7,051m in FY17, without OOS and Corporate & Eliminations.

Automotive Power discretes microcontroller-based semiconductors and modules Smart Card ICs total market in 2017: $34.5bn total market in 2016: $15.9bn total market in 2016: $2.79bn

NXP 12.5% Infineon 18.5% Infineon 24.8% Infineon 10.8% ON Semi 9.2%

Renesas 10.0% STMicro 5.3% NXP 24.2% TI 8.0% Mitsubishi 4.9%

STMicro 7.1% Toshiba 4.7% Samsung 16.2% Bosch 5.5% Vishay 4.6%

ON Semi 4.8% Fuji 4.2% STMicro 10.5% Rohm 2.7% Renesas 4.1%

Toshiba 2.7% Rohm 2.6% CEC Huada 9.3% ADI 2.6% Semikron 2.6%

Source: Strategy Analytics, "2017 Automotive Source: Based on or includes content supplied by Source: Based on or includes content supplied by Semiconductor Vendor Share", IHS Markit, Technology Group, "Power IHS Markit, Technology Group, "Smart April 2018 Semiconductor Annual Market Share Cards Semiconductors Report", July 2017 Report", August 2017

Infineon +11.4% +6.1% +13.9% +13.5% +7.7% CAGR(FY15-17) 2272 1735 2020 1337 Revenue [EUR m]* 1712 881 FY15 710 1329 399 463 FY17

Market** 5.9% 6.5% 6.8% 2.5% 1.1%

CAGR(FY15-17) Americas EMEA China APAC*** Japan

Infineon CAGR(FY15-FY17) Total Revenue: 10.4%

Market** CAGR(FY15-FY17) World: 5.2%

* Includes revenue from International Rectifier starting 13 January 2015. ** Source: Based on or includes content supplied by IHS Markit, Technology Group, "Worldwide Semiconductor Shipment Forecast", March 2018. Market: total semiconductor market excluding memory ICs and MPU. Euro based, adjusted to match Infineon fiscal year. *** excl. China and Japan.

ATV – average platform life-time: ~6 years IPC – average platform life-time: ~5 years

55% 65% 35% 15%

5% 5% 5% 10% 5% evenue share evenue

evenue share evenue 0%

r r <1 1-3 3-5 5-7 >7 <1 1-3 3-5 5-7 >7 platform life-time in years platform life-time in years

PMMPMM– average platform~5 years life-time: ~4 years CCS – average platform~5~4 years years life-time: ~4 years

55% 40% 25% 25% 15% 20%

10% 10% 5% evenue share evenue

evenue share evenue 0%

r r <1 1-3 3-5 5-7 >7 <1 1-3 3-5 5-7 >7 platform life-time in years platform life-time in years

FY17 top-10 direct customers Working with all important distributors

in alphabetical order in alphabetical order

FY17 revenue split by sales channel Total number of customers

Top-10 direct customers 29% > 100,000 customers 40% 31% Other direct Distribution customers

Corporate Go Deep Accounts Revenue trendline growth below corporate average Higher share with big accounts Key Accounts Go Wide Account Significantly higher share with smaller accounts Joint Account Revenue trendline growth above corporate average Go Wider Core Account Grow number of customers Mass Market

Long standing partnership with key distributors › Balanced network with global and local experts › Shared vision on strategy and close collaboration for demand creation and demand fulfillment

Go Wide – joint resources with distribution partners › Seamless and transparent collaboration from first level application support to deep technical product support › Joint learning about new applications and new usage of our products

Go Wider – enabling the web and distributors to extend customer base › Broad offering of technical on-site or self-serve trainings › Special web based tools for full solution selling, including big data based cross-selling assistant

Quarterly average revenue by sales channel in the respective financial year*

[EUR m]

2500

40.0% 40.3% 41.3% 38.0% 38.4% 2000 30.4% 33.6% 1500

1000

500

0 Ø FY13 Ø FY14 Ø FY15 Ø FY16 Ø FY17 Q1 FY18 Q2 FY18 Direct Distribution Share of distribution in %

Continuous effort and acquisition of International Rectifier have supported share growth of distribution business

* Includes revenues from International Rectifier starting with FY15.

Display Marketing – Parametric Search – Product Finder – Tools & Comparison –

Shopping Cart – Evaluation Boards & Kits – 24/7 Chat Function Infineon Web Infineon

SEA – Social Media – External Communities – Forums – Distributor Web External Web External

We support multi-channel customer journeys with relevant content via a broad set of platforms and interfaces

Individual customer touch points

Digital cross-selling assistant myInfineon Recommendation for technically best Single point of truth for all Sales & matching products based on big data Marketing material, accessible for analytics Infineon sales and distributors

AI knowledge data base Online Simulation Tools Learning data base to enable Thermic and electrical validation in customer self-service support early phase of the buying process

Worldwide ecosystem of >140 qualified companies offering knowledge and experience to design solutions based on Infineon products.

Members benefit from privileged access to information, discount on tools, trainings and promotion.

Examples of IoT-security partners

Peer group market share development* 2017 vs. 2012

3.3% Infineon +0.5% 2.8% (incl. IRF) -pt

2017 total semiconductor 5.9% Texas Instruments +0.2% market ($429bn) 5.7% -pt

3.4% NXP +0.2% 3.2% (incl. FSL) -pt

not 2.1% ON Semi +0.1% addressed 2.0% (incl. FCS) -pt by Infineon (e.g. CPUs, 1.4% +0.1% Microchip memory) 1.3% (incl. ATML) -pt

0.6% Mitsubishi -0.1%-pt 0.7%

3.3% STMicro -0.6%-pt 3.9%

2017 2.7% Renesas -1.6%-pt 2012 4.3%

*Shares based on Total Semiconductor Market without Memory IC, without MPU; adjustments for some of the largest transactions indicated. Source: Based on IHS Markit, Technology Group, "Annual 2001 to 2017 Semiconductor Market Share 2017 Competitive Landscaping Tool", Q1 2018, March 2018.

Market valuation and M&A cycle

Grow in core applications, products, technologies

Core - e.g. power, Complement core drivers, algorithms, sensors in automotive & Adjacent New area industrial applications, digital control, system know-how security

Build out portfolio expand into new areas or applications. Small strategic M&A to fill gaps, explore and learn

Regulatory environment

Strategic fit › Strengthen and enhance Infineon's core › Grow our product, application and competence portfolio › Selectively partner and acquire in new areas

Cultural fit › Compatible with and adding to Infineon's set of values and business principles: smooth integration and fast realization of synergies

Financial fit › EPS and Segment Result margin accretive › Positive present value › Investment grade credit rating maintained

Our go-to-market strategy continues to drive profitable growth.

Resilient growth model based on well-diversified exposure to customers, regions and applications with long design-cycles.

We pick the right battles and win with the winners. We jointly develop solutions optimizing system cost performance. We aim for leading positions in target markets.

We scale in all customer segments. We invest in big data driven unique web tools enriching customer experience. Higher distribution share enables additional profitable growth.

Infineon leads with organic market share gain. M&A is aimed at strengthening and enhancing core as well as building out portfolio, meeting strategic, cultural and financial requirements.

Glossary – CMO Gassel

µC microcontroller LNA low-noise amplifier

ADAS advanced driver assistance system M&A merger and acquisition

APAC Asia Pacific µC microcontroller

MCU microcontroller unit ATV Automotive Division

MHA major home appliance CAGR compound annual growth rate MOSFET metal oxid semiconductor field effect transistor CAV commercial and agricultural vehicles OEM original equipment manufacturer CPU central processing unit P2S product-to-system approach CSS Chip Card & Security division PMM Power Management & Multimarket division EMEA Europe, Middle East, Africa ppt percentage point GHz gigahertz SG&A selling, general and administrative expenses

IC integrated circuit SOP start of production

IGBT insulated- gate bipolar transistor TAM total addressable market

IPC Industrial Power Control division TPM trusted platform module

all degrees of vehicle electrification (EV, MHEV, LDO linear drop-out voltage regulators xEV FHEV, PHEV)

› since 2016: CMO, responsible for Sales & Marketing, Regions, Strategy Development, Mergers & Acquisitions, Intellectual Property › 2012: Division President Industrial Power Control › 2008: Division President Chip Card & Security

› Dr. Helmut Gassel was born in Dortmund, Germany, in 1964. He holds a Diploma in Physics from the Ruhr-University in Bochum, Germany. He received his PhD in Electrical Engineering from the University Duisburg, Germany. › He joined Infineon (Siemens AG until 1999) in 1995.

London, 12 June 2018

2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 1 1500 3000 4500 6000 7500 2018 ** * m][EUR by Since Source: Source: WSTS (World Semiconductor Trade Statistics) EUR, October in 2017 Based on - 0 06 ~9% - 12 FY99 Revenue [lhs] Infineon* Infineon's 1,200 126,895 FY99, 1,681 thus portfolio (excl. portfolio Other Operating Segments andCorporate per Eliminations) of & end FY01 2,045 today's

1,821 consistently FY03 o 1,995 rganicCAGR

2,289 businesses Copyright Technologies© Infineon rights 2018. AG reserved.All FY05 2,366 (99 (adjusted for year the Sep Infineon fiscal [rhs] 30) ending SemiconductorMarket** World -

2,701 17) outperforming : FY07 2,906 ~9%

2,916 have FY09 2,128

3,103 organically FY11 CAGR 3,780 semi (99

FY17; growth by consolidation of IRF FY17; growth IRF eliminatedconsolidation of by 3,774 - 17) FY13

3,815 : 5.9% market

4,303 grown FY15 5,100 (excl. IRF) 296,383 6,059 (incl. IRF)

6,472 295,996 FY17 7,051 353,884 100,000 300,000 200,000 2 Adjusted for currency effects, we have delivered 8% p.a. growth in the recent past

Infineon revenue growth FY12 - FY18e at constant currencies and adjusted for IRF

170%

150% 1%

CAGR Trendline(FY12-FY17)= ø8% -1% 130% 2%

0% 110% -5% 3%

90% FY12 FY13 FY14 FY15 FY16 FY17 FY18e

Infineon revenues at constant currencies, adjusted for IRF; index FY12 revenue = 100% FY18 outlook at constant currencies

Exponential trendline based on FY12 - FY17 IRF-adjusted revenue at constant currencies % deviation actuals vs. trendline

Investment-to-sales ratio vs. revenue growth

13.5% 13.9% 12.5% ø13%

9.5% 9.1% ø8%

4.9%

FY15 FY16 FY17 FY18e Investment-to-Sales ratio* y-o-y organic revenue growth at constant currencies FY18 outlook at constant currencies

* Investments excl. financial investments, Qimonda IP, Kulim 2 Frontend cleanroom, Campeon office building.

Segment result margin (SRM) and target (FY15 – FY18e)

17.5%17,5% SRM target: 17% 17.1% through the cycle 17.0%17,0%

16.5%16,5%

16.0%16,0%

15.5% 15.5%15,5% SRM target: 15% 15.2% through the cycle 15.0%15,0%

14.5%14,5%

14.0%14,0% FY15 FY16 FY17 FY18e

Divisions revenue growth FY12-FY18e at constant currencies and adjusted for IRF

200% 200% ATV IPC 180% 180% CAGR Trendline =9.9% CAGR Trendline =7.1% (FY12-FY17) 2% (FY12-FY17) 160% 160% -2% 3% 140% -1% 140% 2% -2% 0% 120% -4% 120% 2% 2% 7% -10% 100% 100%

80% 80% FY12 FY13 FY14 FY15 FY16 FY17 FY18e FY12 FY13 FY14 FY15 FY16 FY17 FY18e

200% 200% PMM without RFS CCS 180% 180% CAGR Trendline(FY12-FY17)=2.6% CAGR Trendline(FY12-FY17)=8.9% CAGR Trendline =8.1% 160% (FY15-FY17) 160% -6% 10% 4% 140% 140% 1% -5% 120% 4% -2% 120% -4% 1% 0% 1% 2% 100% 100%

80% 80% FY12 FY13 FY14 FY15 FY16 FY17 FY18e FY12 FY13 FY14 FY15 FY16 FY17 FY18e

Organic revenue growth projection at constant currencies

10%+ Reversion to 9% trendline

9.5% 9.1%

Trendline growth composition by division 4.9% … ATV ~10%

IPC ~8%

PMM ~9%

CCS mid-single digit %

FY15 FY16 FY17 FY18e FY19e ≥ FY20

Average development and production time of an automotive platform* in years

Platform Platform Platform production development phase finalization

SOP SOP SOP SOP SOP SOP SOP SOP SOP SOP SOP SOP SOP SOP -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 +7 +8 Business Start of award production (SOP)

› The platform development phase starts on average 4 to 7 years prior to the SOP › In most cases the platform is awarded to semiconductor suppliers 2 to 3 years prior to the SOP › The production of a standard automotive platform runs then over 7 to 8 years

* Development and production time can differ based on different parameters (e.g. system, product, OEM/Tier1 strategy)

How much new business needs to be won to grow market share by 1%-point?

Duration of design-win Duration of design-win Duration of design-win 1 year 5 years 10 years

70% 80% 79% 79% 80% 75% 79% 80% 79%

+10%-pts. +5%-pts. +1%-pt.

30% 25%

20% 21% 21% 20% 21% 20% 21%

Infineon Infineon Infineon

t0 available new t1 t0 available new t1 t0 available new t1 business business business

Assumption: Infineon holds a market share 20% at t0.

Annual revenue of Infineon IGBT technologies after market introduction

600

IGBT 4 500

IGBT 3 400

[EUR m] [EUR 300

IGBT 2 Revenue Revenue 200

100 IGBT 1

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Years after market introduction

Investment- ~3% to-sales ratio Copyright Technologies© Infineon rights 2018. AG reserved.All ~9% Revenue growth › › 13% › investment 15% growth revenue 9% investment 15% Long 7% 6% 2% - - - pt. capex, pt. - - term investment pt. capitalized R&D capitalizedpt. pt. pt . * Cleanrooms Cleanrooms * included. notand major buildingsoffice capacity expansion capacity fixed thereof - - to to - - sales, at sales* - to - sales thereof 11 We need ~€0.88 of incremental capital for ~€1.00 incremental revenue

2%-pt capitalized R&D 15% investment-to-sales 6%-pt fixed 13%-pt capex enabling 7%-pt capacity expansion 9% revenue growth

7% capex = 77.8% capex-to-incremental revenue 9% revenue growth + ca. 10% of revenue for working capital

~88% capital employed-to-incremental revenue

For €1.00 incremental revenue, €0.88 of incremental capital needed

Incremental Contribution Investment Cost of carry revenue margin

vs. ~€0.88 ~€1.00 ~€0.50 ~€0.09 Incremental Incremental Incremental Incremental capital employed revenue contribution cost of carry margin

While a market downturn tends to last less than a year, a lost design will negatively affect our growth, margin and cash generation in the mid- to long-term Therefore we: › invest in our organic growth while focusing on the right global footprint › increase foundry/subcon share to generate more return by less capital employed

› Additional investments in the range of a low triple-digit €m amount expected on top of the linear investment-to-sales formula in the next few years to be prepared for potential revenue upside and for potential structural changes

› Frontend cleanrooms and major office buildings are excluded from the linear investment-to-sales formula due to their lumpiness and irregular occurrence. We plan to invest about €700m over the 5-years planning horizon into such buildings (includes Villach 300 mm cleanroom, Villach R&D building and office building at Campeon headquarters)

› ~2%-points D&A-to-sales increase expected due to 2%-points increase in target investment-to-sales ratio

› ~1%-point additional D&A-to-sales increase expected due to: ‒ Above 15% investment-to-sales at expected 10%+ growth through at least FY19 ‒ Additional investments as set forth on preceding page

~3%-points D&A-to-sales increase expected over the next five years

› We want to continuously drive the "virtuous circle" of market share gains by offering our customers competitive pricing while achieving above-cost-of- capital returns on our growth investments › Increased investment level drives further economic value added, but results in P&L headwind in particular from roll-on of depreciation › We continue to expect opex to scale at the following percentages of revenue growth: ‒ R&D 100% ‒ S&M 90% ‒ G&A 60% › Productivity gains from increasing 300 mm and Kulim share expected to offset depreciation roll-on and other ramp-up costs

While higher growth investments weigh on our FCF over the next years, they will significantly boost EBITDA and FCF generation in the mid- to long-term

Current Near-term Long-term

Revenue growth ~8% ~10%+ ~9%

~17%+ Segment result margin ~17% opex economies of scale

Investment-to-sales ~13%* ~15%++ * ~15%*

› Period of accelerated growth with correspondingly higher investment needs according to linear formula › Investments into cleanrooms and › Additional investments to be prepared for potential office buildings revenue upside and for potential structural changes

* Thereof ~2%-points capitalized R&D according to IFRS reporting standards.

TV FCF Terminal margin Forecast We would expect a 6 – 7%-points value improvement Period improvement in FCF-to-sales in a growth to last low growth scenario: planned year › Reduction of investments Broker A 5 years 4.0% -1.8% according to the linear formula › Elimination of lumpy investments into cleanroom and office Broker B 15 years 3.0% 0.0% buildings › Improvement in opex-to-sales › Lower increase in net working … … … … capital

Infineon is seeing sustainable multi-year growth based on strong structural drivers. If and when growth is decelerating, investments will be adjusted downward accordingly.

Tax loss › Both the effective tax rate and the cash tax rate are currently benefitting from German tax loss carry forwards carry forwards › This benefit is expected to phase out over the coming years

› Cash tax rate* is expected to rise towards 22% – 26% Tax rate beyond 2022 guidance › Effective tax rate is expected to rise towards 22% – 26% a few years earlier due to deferred tax accounting

* Income taxes paid divided by earnings before taxes adjusted for D&A from purchase price allocation.

Gross Cash Gross Debt "€1bn + 10% - 20% of revenues " "<= 2.0x EBITDA"

Actuals "€1bn + 20% of revenues" LTM per “0.8x EBITDA" 31 Mar 2018

Financial flexibility based on a solid capital structure › Sufficient liquidity level for M&A flexibility, financing operating activities and planned investments throughout the cycle › High focus on centralizing cash (continuous excess cash repatriation from subsidiaries) › €1bn liquidity cushion for net pension liabilities and contingent liabilities › Moderate leverage combined with well spread maturity profile until 2028, which secures repayment of debt even if capital markets are not available in extremely adverse scenarios (such as in the financial crisis 2008/2009) › Strong and diversified core banking group

Infineon has consistently Higher capex required to achieved targets set forth in support accelerated growth current target operating model. in power.

While this results in lower FCF Based on current booking trends, and RoCE in the near-term, it double-digit growth will likely significantly increases EBITDA be sustained at least for the margin and FCF generation in next fiscal year; beyond that, the mid- to long-term, thereby reversion to long-term 9% maximizing shareholder growth trendline expected. value.

We expect to gradually increase 17% segment result margin by virtue of economies of scale in operating expenses and to maintain FY18 gross margin despite ramp-up costs including strong roll-on of depreciation.

Glossary

ATV automotive OEM original equipment manufacturer

CAGR compound annual growth rate P&L profit and loss statement

CCS chip card security PMM power management & multimarket

D&A depreciation and amortization RFS radio frequency systems

earnings before interest, taxes, depreciation and EBITDA rhs right-hand scale amortization

FCF free cash flow RoCE return on capital employed

G&A general and administrative expenses S&M sales and marketing

IGBT insulated- gate bipolar transistor SOP standard operating procedure

IPC industrial power control subcon sub-contractor

IRF International Rectifier Tier1 automotive system supplier

IRR internal rate of return TOM target operating model

lhs left-hand scale TV terminal value

LTM last twelve months WACC weighted average cost of capital

M&A merger and aqcuisition

› since 2011: CFO › 2010: Head of Group Controlling at RWE AG in Essen, Germany › 2007: CEO of Siemens Financial Services GmbH in Munich, Germany

› Dominik Asam was born in Munich in 1969. He studied at the Technical University of Munich and at the École Centrale in Paris, France. He is a graduate mechanical engineer and an Ingénieur des Arts et Manufactures. In addition, he completed an MBA at INSEAD in Fontainebleau, France. › He joined Infineon in 2003.

London, 12 June 2018 Infineon is well positioned in its addressed automotive product segments

Megatrends shaping the automotive Automotive semiconductors market increasing semi content per car 2017 total market size: $34.5bn

NXP 12.5%

Infineon 10.8% +0.1%-pt

Renesas 10.0%

TI 8.0%

STM 7.1%

› #1 in power with 26% (+0.4 %-pt) mobility

- › #2 in sensors with 12.9% (+0.4 %-pt) › Significant design-wins for µC in

safety/ADAS/AD lectro

E › Market share trend: Infineon benefits Automated driving disproportionately from the megatrends › Electro-mobility: power, drivers, µC › Automated driving: radar, lidar, µC

Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2018

Charging station › Majority of charging points is Si-based (PMM: CoolMOS™, IPC: IGBTs) › First design-wins for SiC-based ultra high- power charger (> 350 kW) logged in (IPC) Onboard charger › Si-based (PMM: CoolMOS™, ATV: IGBTs) › First application inside the car for SiC › long-term option for GaN

Main inverter (ATV) mobility - › Main source of power semi content › Dominated by Si-based solutions for the next

decade lectro

E › Premium cars will adopt SiC in 2020+; mass market to follow in 2025+ DC-DC converter (ATV) › Si-based; long-term option for SiC and GaN Battery › IGBTs (ATV) and CoolMOS™ (PMM) for battery switch

CO2 emission development and Two consumer trends countervail CO2 regulations for main regions reduction

China 2020 : 5 l/100 km (1) SUV share of registered cars in Europe1) 200 › constantly increa- US 2021 : sing share of heavy 44.7 mpg 40 ICE SUVs (~150 g 26 150 % CO2/km) prevents

% fleet average to normalized to NEDC to normalized

, , come down ] 2016 2022 100 [g/km Japan 2020: 20.3 km/l* (2) Diesel share of registered cars in Europe2)

values › Lower positive EU 2021: 95 g CO2/km 50 contribution of Diesel

47 (~15% less CO2

emission emission actual 36

2 % emissions than enacted % CO proposed gasoline) due to 0 reduced acceptance 2000 2005 2010 2015 2020 2025 2016 2022

*Note: Japan has already met its 2020 statutory target as of 2013 Source: 1) IHS Markit, Automotive Group, Report, January 2018 2) IHS Markit, Automotive Group, “Light Vehicle Alternative Propulsion Forecast”, March 2018

CO emission reduction by powertrain Growth drivers of electro-mobility 2 system

+ Regulation 120 -15% -30% -77% -100% + Incentives; China industry politics 102

+ Decreasing Diesel share 84

+ Increasing SUV share emission [g/km]

- Cost and range vs. ICE 2 CO - Limited charging infrastructure 28 - Further ICE improvements 0 - Attractive oil price ICE 48 V MHEV FHEV PHEV BEV Source: Infineon estimates

› Due to absence of improvements in CO2 reduction in the past years, OEMs have to switch to “catch-up” mode until 2021

› OEMs expected to push 48 V MHEV, FHEV, PHEV systems near-term to meet CO2 targets › Mid- to long-term, BEVs will become the preferred solution

2018 average xEV semiconductor content by degree of electrification

48 V / MHEV (in 2018) FHEV / PHEV (in 2018) BEV (in 2018)

Sense Compute Actuate $750 $740 $95 $300 $25 $455

$475 $75 $0 $20 $375 $15 $375 $5 $20

$120

$80

µC µC

µC

ICE

BoM BoM

BoM

total total

total

power* power*

sensors others

power*

sensors

others

semi semi semi

2018 ~2m vehicles ~2.5m vehicles ~1m vehicles 2020 ~3.5m vehicles ~6m vehicles ~2.5m vehicles 2025 ~17m vehicles ~13m vehicles ~8m vehicles

Source: Strategy Analytics, "Automotive Semiconductor Content", May 2018; Infineon estimates * "power" includes linear and ASIC; "others" include opto, small signal discrete, memory

Bare dies Discretes Modules

Diodes MOSFETs molded frame-based

Si will dominate the xEV market Modules will be preferred form SiC throughout next decade* factor in SiC mass market*

[by $ value] [by $ value] 100% 100%

50% Si CAGR(20-25) 50% = +13%

99% 97% 80% 0% ~20% 0% 2018 2020 2025 2018 2020 2025 Si SiC SiC diode SiC MOSFET hybrid SiC module full SiC module

* Source: Infineon estimates

On-board charger Main inverter

First design-win to ramp in 2019! First design-win to ramp in 2020!

HybridPACK™ Drive CoolSiC™

CoolSiC™ Automotive MOSFET Increased scalability supports OEM platform strategy

› More than 20 leading OEMs and tier-1s are evaluating Infineon's SiC solutions for automotive › Customer feedback clearly shows that Infineon has deepest understanding of technical quality threats › Infineon's internal quality test procedures exceed common industry norm; test results proof that Infineon's SiC products reach that quality level › Industry's broadest portfolio allows customer to "pick what they need" rather than to "take what we have"

Sense Interpret & decide Act Driver

Sensors Controllers, algorithms, Actuators software Camera inside specialized driving sensor domain processors controller Radar Radar Camera outside

sensor Automated car Automated Ultrasonic fusion central decision gateway making

More sensors required for any next level of automation NCAP 5 Star, AD L2 AD L3 AD L4/L5 Automatic emergency brake/ forward collision warning Application* Parking assist Valet parking Lane keep assist Highway assist Highway and urban chauffeur

Corner MRR/LRR MRR/LRR Imaging Radar ≥ 3 ≥ 6 ≥ 10 # of modules** New: Corner starting 2020 Corner Surround Camera ≥ 1 ≥ 4 ≥ 8 # of modules**

Lidar 0  1 ≥ 1 # of modules**

› Ultrasonic › Ultrasonic › Ultrasonic Others › Interior camera › Interior camera › V2X

* Source: VDA (German Association of the Automotive Industry); Society of Automotive Engineers ** Market assumption

Classification of long-range lidar systems

solid state optical system mechanically moving mirror scanning optical flash lidar scanning MEMS-based mirror phased array + proven concept allows optical + no moving parts + robust signal path + beam forming - bulky more complex + more compact high demand of - laser system (more - expensive - laser power, expensive, higher more cost-effective especially for power demand) + long-range roadmap for higher level of + integration

› Lidar is Infineon’s AD 1st System reference design MEMS mirror portfolio expansion adjacent to radar Infineon laser diode › Infineon intends to repeat mirror driver AURIX™ its radar success story MEMS mirror

detector . › In addition to MEMS, room . receiver FPGA to increase BoM by receiver, diodes microcontroller, power power supply / power management management ICs

AURIX™ is the market reference as host controller in central computing platforms complementing CPU/GPU to make central computer robust and fail operational

AURIX™

Go™ Automated Driving Drive Platform with AURIX™ › Safety host monitoring PX2 the operation of the data fusion ECU enables ISO 26262 ASIL-D › Safe and secure gateway to the vehicle network › Fallback operation in Apollo 2.0 case of a GPU/CPU fail Self Driving › Safe communication to Platform actuator control units

› Awareness for safety and security aspects of AD is increasing rapidly › Infineon is cooperating with the leading AD platform providers

Average semi content per car by level of automation at the given years NCAP 5 Star/AD L2 (~2020) AD L3 (~2025) AD L4/L5 (~2030)

Sense Compute Actuate $55 $970 $300

$30 $630 $160 $190

$70 $230 $190

$180 $195 $30 $160 $90 $0

$40

lidar

BoM

radar

fusion

sensor

fusion

camera

sensor

camera

modules modules modules

actuators

otal

total BoM total

total BoM total t L2 vehicles in 2020: ~6m L3 vehicles in 2025: ~3m L4/L5 vehicles in 2030: ~4m

Source: Strategy Analytics; Infineon Bill of material (BoM) contains all type of semiconductors (e.g. radar modules include µC); sensor fusion does not include memory BoM are projected figures for the respective time frame

Drivers for semiconductor content per car Vehicle production Electro-mobility Automated Driving Comfort, premium

› Legislation Today › Premium cars › Improvements › crash avoidance are early of ICE › ADAS adopters of high-end ~2% growth p.a. Tomorrow › › Higher efficiency comfort and › Autonomous of all electric safety features consumers Driving › Trickling down › Adoption of xEV to mid-range ~10% p.a. through-cycle growth

Composition of incremental € revenue over five xEV year planning horizon by application › Driven by emission regulations and consumer preferences towards SUV and reduced acceptance of diesel › Short-term, PHEVs and MHEVs are first choice; mid-term BEVs to meet are the preferred solution all targets worldwide ADAS/AD › NCAP and ADAS/AD Level 1-2 EU 95 g drive the semiconductor content in the next years › AD Level 3-5 will create structural growth long-term

xEV ADAS/AD Others Incremental ATV’s trendline growth: revenue ~10%

Infineon enables clean, safe and smart cars with its unparalleled expertise in process technology, application understanding, quality know-how as well as broadest range of package options.

In addition, Infineon’s portfolio ideally fits the fast growing trends of ADAS/AD and xEV. Thus Infineon expects to outgrow the market by targeting 10% revenue CAGR.

Automated driving requires more Current consumer trends thwart CO2 sensors and microcontrollers for any emission targets. Hence, near- and next level of automation ensuring mid-term, share of Electro- redundancy, safety, security, and mobility needs to increase computing power. distinctly.

Dashboard

ATV FY17 revenue by application ATV FY17 revenue by region

Americas

Powertrain Comfort, (excl. xEV) Premium Japan EMEA

xEV China ADAS Safety APAC (excl. ADAS) excl. China

Revenue and segment result development

[EUR m] 900 20% 811 783 771 800 766 750 15.1% 691 705 700 670 676 16.7% 14.8% 621 15% 598 614 614 600 13.4% 510 518 518 484 500 459 455 452 11.7% 425 428 416 424 10.7% 10% 391 400 377

300 5% 200 5.3%

100 55 63 54 47 20 37 52 57 55 66 70 69 72 64 71 93 72 84 97 112 114 131 120 109 103 116 0 0% Q1 Q1 Q1 Q1 Q1 Q1 Q1 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Revenue ATV Segment Result ATV Segment Result Margin ATV

Automotive semiconductors 2017 total market size: $34.5bn

NXP 12.5% Market share trend Infineon 10.8% +0.1%-pt › Infineon benefits disproportionately Renesas 10.0% from the two mega trends TI 8.0% ‒ ADAS/AD STM 7.1% ‒ clean cars

Sensors Microcontrollers Power

+0.4%-pt Bosch 17.4% Renesas 31.2% Infineon 26.0% Infineon 12.9% +0.4%-pt NXP 27.8% STM 12.5% NXP 7.7% TI 9.4% Bosch 9.1% Melexis 7.5% Infineon 8.5% -0.2%-pt TI 8.3% ON Semi 7.2% Microchip 5.8% NXP 6.5%

› xEV penetration long-term › 24 / 77 GHz Radar long-term › ADAS/AD long-term › EPS drivers: drivers: drivers: › Lidar › Powertrain › Lighting

Source: Strategy Analytics, "Automotive Semiconductor Vendor Market Shares", April 2018

Infineon automotive market share development*

[USD bn] CAGR(10-17): +7.3%

CAGR(10-17): +10.8%

45 10.8% 12% 10.5% 10.4% 10.7% 9.6% 9.6% 8.7% 9.0% 34.5 30.2 30 27.5 27.4 8% 25.2 23.5 24.0 21.0

15 4%

3.7 1.8 2.3 2.2 2.4 2.9 2.8 3.2 0 0% 2010 2011 2012 2013 2014 2015 2016 2017 Infineon automotive revenue total automotive semiconductor market market share

* Infineon automotive revenue as reported to Strategy Analytics incl. revenue from ATV, IPC and PMM. Adjusted to calendar year. Source: Strategy Analytics, “Automotive Semiconductor Vendor 2017 Market Share", April 2018.

AD automated driving

ADAS advanced driver assistance system

AEB automatic emergency braking

EPS electric power steering

EV electric vehicle

FHEV full hybrid electric vehicle

FPGA field programmable gate array

GaN gallium nitride

HEV hybrid electric vehicle

HSM hardware security module

ICE internal combustion engine

lidar light detection and ranging

µC microcontroller

micro-hybrid vehicles using start-stop systems and limited recuperation

mild-hybrid vehicles using start-stop systems, recuperation, DC-DC conversion, e-motor

OBC on-board charger

PHEV plug-in hybrid electric vehicle

SiC silicon carbide

SiGe silicon germanium

V2X vehicle-to-everything communication

xEV all degrees of vehicle electrification (EV, MHEV, FHEV, PHEV)

› since 2016: Division President Automotive › Sep 2012: Head of Operations, responsible for Manufacturing, Supply Chain, Purchasing › Jan 2012: Division President Power Management & Multimarket › 2013 – 2016: Member of the Supervisory Board of Infineon Technologies Austria › since 2012: Member of the Supervisory Board of Infineon Technologies Dresden › since 2018: Member and Vice Chairman of the Board of Directors of the JV SIAPM (SAIC Infineon Automotive Power Modules (Shanghai) Co. Ltd.)

› Peter Schiefer was born in Munich, Germany, in 1965. He holds a Diploma in Electrical Engineering from the University of Applied Sciences in Munich. › He joined Infineon (Siemens AG until 1999) in 1990.

Disclaimer: This presentation contains forward-looking statements about the business, financial condition and earnings performance of the Infineon Group. These statements are based on assumptions and projections resting upon currently available information and present estimates. They are subject to a multitude of uncertainties and risks. Actual business development may therefore differ materially from what has been expected. Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements.

Specific disclaimer for IHS Markit reports, data and information referenced in this document: The IHS Markit reports, data and information referenced herein (the "IHS Markit Materials") are the copyrighted property of IHS Markit Ltd. and its subsidiaries (“IHS Markit”) and represent data, research, opinions or viewpoints published by IHS Markit, and are not representations of fact. The IHS Markit Materials speak as of the original publication date thereof and not as of the date of this document. The information and opinions expressed in the IHS Markit Materials are subject to change without notice and neither IHS Markit nor, as a consequence, Infineon have a duty or responsibility to update the IHS Markit Materials or this presentation. Moreover, while the IHS Markit Materials reproduced herein are from sources considered reliable, the accuracy and completeness thereof are not warranted, nor are the opinions and analyses which are based upon it. IHS Markit and the trademarks used in the data, if any, are trademarks of IHS Markit. Other trademarks appearing in the IHS Markit Materials are the property of IHS Markit or their respective owners.

London, 12 June 2018 Infineon's security solutions are widely used

Security solutions for ePassports

Security solutions Security solutions for credit and debit cards from Infineon are Embedded SIM for emergency calls in cars part of our everyday life TPM for secure computing

Embedded secure elements for smart wearables

Example: Automotive Security › As humans, machines, 'things' are getting connected, the risks of security attacks increase strongly as attacks paths increase

› Accordingly, there is a greater need for security in fields like smart home, connected cars, information and communication technologies, Industry 4.0

› Many manufacturers of devices and systems do not have the necessary security know-how

Security must Rules of be ahead of engagement change tomorrow's everyday in the requirements world of security and threats

Preparedness for distant future is a key element of Security solutions success, e.g. require system world's first PQC expertise and resistant related threat implementation modeling – being on a security chip functionally correct by Infineon is not enough

#1 in microcontroller-based smart card ICs*

Industry's broadest coverage of security-relevant CCS is well applications; leading position in growth segments positioned to benefit from the growth Complete portfolio of hardware, software and trends in the turnkey solutions – offering ease of integration security market based on system competence

Broad application competence and solution-oriented go-to-market

*Source: Based on or includes content supplied by IHS Markit, Technology Group, Smart Cards Semiconductors Report – 2016, July 2017

~$3bn Smart cards will continue to exist for a long time smart card ICs market

A broad portfolio of security microcontrollers, software and turnkey solutions; active support for open standards like CIPURSE™

Market trends like contactless, robust security are highly favorable to Infineon

Smart card IC market offers manifold profitable opportunities (e.g. wearables)

24.8% Infineon is the #1 in smart card ICs (#1 in payment, market share for micro- #1 in government ID) controller-based chip card ICs

Source: Based on or includes content supplied by IHS Markit, Technology Group, Smart Cards Semiconductors Report – 2016, July 2017

#1 position in established embedded security markets such as enterprise laptops and automotive security (e.g. eCall)

A broad portfolio of security solutions combining hardware and software addressing a broad set of embedded markets including mobile and IoT

Offering complete security solution with system Product to system competence instead of just a chip to a multitude of IoT edge applications

Security becomes more and more a key feature and Product-to-system business win factor for ATV, PMM and IPC applications

Broad market access due to cross-selling with ATV, PMM and IPC and leveraging Infineon's position in the distribution channel

2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 8 Continuous stream of new topics aging and exiting maturity emerging growing maturing Pay TV SIM Card  Smart card form factor  Embedded form factor Contact-based Payment TPM for Computing

Government ID

Embedded Secure Element (NFC)

Transport Ticketing

Authentication

Contactless Payment

eSIM for Automotive Tokens for Industrial TPM for ICT Security TPM for Smart Home eSIM for eSIM for Trust for Smart Home Industrial Consumer TPM for Automotive Trust for Industrial

Source: Infineon estimates time

Composition of incremental € revenue over five Automotive Security year planning horizon by application Securing automotive applications is a newer area of growth; Infineon's security solutions are used widely here Government ID Growth fueled by project wins over the recent years across regions and customer groups Smart Home Security New area of connected devices at home including networking devices requiring security

Other areas of growth Several other applications like mobile, brand identity will drive

growth in the mid term

Other

ICT security

Access CCS’s trendline growth:

Industrial

security

revenue

security

Automotive

Transport & Transport

Incremental Government

Smart home Smart mid single-digit % infrastructure

Leveraging on leading market position in establishing security in new markets.

Making security easy to use utilizing contactless, security and system competence.

Scaling the business through cross- divisional application know-how and broad market access.

Dashboard

CCS FY17 revenue by application CCS FY17 revenue by region

Americas

Embedded Japan Security EMEA Solutions China

Smart Card Solutions APAC excl. China

Revenue and segment result development [EUR m] 200 25% 185 182 181 180 181 174 174 172 173 172 169 162 164 20% 142 132 125 129 122 119 121 123 112 108 108 108 15% 97 100

10%

6 14 18 18 10 7 10 12 6 8 10 20 18 32 34 37 35 36 32 33 29 29 34 33 25 27 0 0% Q1 Q1 Q1 Q1 Q1 Q1 Q1 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Revenue CCS Segment Result CCS Segment Result Margin CCS

Infineon Smart Cards MCUs share development

[USD m]

CAGR(13-16): +4.8%

CAGR(13-16): +8.7% 27,9% 30% 25,2% 23,9% 23,6% 23,9% 24,8% 22,2%

20%

2669 2837 2785 2421 10% 2080 2264 1800

630 677 691 503 524 540 537 0 0% 2010 2011 2012 2013 2014 2015 2016 Infineon CCS Smart Card MCU revenue total smart cards MCUs market market share

Source: Based on or includes content supplied by IHS Markit, Technology Group, “Smart Cards Semiconductors Report”, July 2017

IC integrated circuit

ICT information and communications technology

ID identification

IoT Internet of things

NFC near field communications

PQC post quantum cryptography

TPM trusted platform module

SIM subscriber identity module

› Thomas Rosteck has been the Division President Chip Card & Security at Infineon Technologies AG since 2017. › Thomas Rosteck was born on 2 March 1966 in Offenbach am Main, Germany. He studied Business Administration and Computer Science at the Technical University of Darmstadt. › He joined Infineon in 1998.

London, 12 June 2018 Electricity becomes the most important energy carrier of the 21st century

Primary energy +35% demand1)

+58% electricity

2016 2040

Shaping the electric power supply chain Generation Transmission Consumption

~ - - ~

- - ~ ~

1) Source: BP 2018 Energy Outlook, February 2018

#1 in the market* for discrete IGBTs, IGBT- based modules and total market; #4 in IPMs

Broad product, technology and packaging IPC is well portfolio; addressing broadest range of applications positioned to gain further Unique manufacturing capability, market share e.g. 300 mm thin-wafer manufacturing for and earn clearly power semiconductors above market- average margins System leader with digitalization of the control loop and functional in power integration of µC & SW, Driver, Switch semiconductors

Leader in next-generation power innovation Key areas of of areas Key semiconductor materials SiC and GaN

* Source: based on or includes content supplied by IHS Markit, Technology Group, "Power Semiconductor Annual Market Share Report", August 2017

IGBT std. modules Discrete IGBTs IPMs total market in 2016: $1.88bn total market in 2016: $0.93bn total market in 2016: $1.19bn

Infineon 32.5% Infineon 37.1% Mitsubishi 39.9% Fuji Mitsubishi 11.5% 15.0% Electric ON Semi 16.3% Fuji 10.4% ON Semi 12.7%

Semikron 9.0% STMicro 4.3% Fuji Electric 9.9%

Vincotech 4.3% Littelfuse 4.2% Infineon 8.7% Hitachi 3.8% Renesas 3.9%

Toshiba 2.6% Mitsubishi 3.8% Semikron 7.6%

Danfoss 2.6% Toshiba 3.6% STMicro 2.0% Bosch 2.5% Rohm 2.1% Sanken 1.2% ABB 2.3% IXYS 1.6%

Source: Based on or includes content supplied by IHS Markit, Technology Group, "Power Semiconductor Annual Market Share Report", August 2017

Strengthen core › Complement technology leadership and #1 position in IGBT standard modules with next-generation WBG power semis with focus on SiC (CoolSiC™) › Continuously increase scale leadership with 300 mm › Exploit scale in R&D

Grow in adjacent fields › Invest into growth of IPM business, using existing IGBT, driver and iMotion portfolio to become top-3 player in IPMs soon › Invest into products for digital control chain for IPC including algorithms for drives

Broaden scope to new applications › System understanding and strong R&D force enable entering emerging power applications like charging infrastructure for xEV, Commercial and Agriculture Vehicles (CAV), eMarine, eAviation

Composition of incremental € revenue over five Industrial automation, cobots year planning horizon by application inverterization; cobots: acceptance to accelerate due to ever higher safety levels and ease of use Renewable energies grid parity reached; higher growth from China, India, RoW

Home appliances inverterization; growth in China; strong market success with IPMs

Others energy storage; electric buses; electric delivery vehicles; eV infrastructure

IPC’s trendline growth: ~8%

Infineon is powering all leading renewable IPC revenue in renewables energy players*

[EUR m] total 2) 4) 320 – 410 PV inverter Wind CAGR(17-22): 4.3% - 9.6% 1 | Huawei  1 | Siemens/Gamesa 

FY13 FY14 FY15 FY16 FY17 FY22e 6 | ABB  6 | Envision 

Installed wind capacity3) IPC wind revenue 7 | Kstar  7 | Nordex  CAGR(13-17) CAGR(13-17) +7% +8% 8 | Goodwe  8 | Senvion 

1) Installed PV capacity IPC PV revenue 9 | Growatt  9 | United Power  CAGR(13-17) CAGR(13-17) +25% +31% 10 | Power Electr.  10 | Mingyang  * Infineon is serving the top-10 of each category but not necessarily as a sole supplier. Source: 1) based on or includes content supplied by IHS Markit, Technology Group, "PV Installations Tracker – Q1 2018"; March 2018; including off-grid 2) by shipped capacity in MW: based on or includes content supplied by IHS Markit, Technology Group, "PV Inverter Market Tracker - Q1 2018"; June 2018 3) MAKE Consulting – Market Outlook Update Q1 2018; March 2018 4) by shipped/installed capacity (in MW): MAKE Consulting – Historical Wind Turbine OEM Market Share; April 2018 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 7 Energy storage is essential to further deploy decentral and renewable energy generation

Key drivers: › Decentralization of power generation › Peak shaving of energy generation and energy consumption › Limited capacity and flexibility of today's grids › Reduction of standby cost of fossil power plants

Co-located with Grid renewables standalone Residential

Industrial

Annual energy storage installations1)

[MW] CAGR(17-25): 22% ~€3,200 of power 10.000 semiconductor 7.500 content per MW of 5.000 2.500 installed energy 2) 0 storage capacity 2012 2015 2017 2021e 2025e Source: 1) based on or includes content supplied by IHS Markit, Technology Group, "Grid-Connected Energy Storage Market Tracker - H2 2017“, February 2018 2) Infineon estimate

Uncontrolled Variable Number of home appliances by motor type2) motor speed drive

[units m] CAGR(17-22) Semi content3)

585 161 244 +19% ~€9.50 (34%) (65%) 67 (12%) (25%)

474 475 467 317 -7% ~€0.70 (88%) (75%) (66%) (35%) Extended Less lifetime noise

Up to 40% less energy1) 2010 2015 2017 2022e Uncontrolled motor Motor with variable speed drive

Source: 1) Compared to devices without inverter 2) Source: based on or includes content supplied by IHS Markit, Technology Group, "Home Appliance Database: All Devices and Associated Electronics", May 2018 3) Infineon estimate for a typical aircon

Early identification of trend for IPC revenue in home appliances inverterization is showing outstanding growth [EUR m] CAGR : 52% Market access through inorganic (14-17) growth (acquisit. of LSPS and IRF)

Improved delivery capability through capacity increase 247 177 Extension of portfolio of integrated 148 products to gather higher 70

semiconductor share at customers FY14 FY15 FY16 FY17

Solution based on Solution based on Solution based on standard IPM CIPOS™ Nano iMOTION™ Smart IPM

Customer benefits of highly integrated power ICs

› Significant system cost reduction with BoM savings of ~30% › Reduction in engineering efforts › Reduction in time-to-market

Adjacent Core

Controller Gate driver 3-phase inverter (IGBT)

triggers low- translates power signal signal into AC appropriate Motor gate input

iMOTION™ Controller iMOTION™ Smart IPM Standard IPM

Key benefits

System improvement Time-to-market

System cost reduction Flexibility

System understanding and extended product portfolio allow for growth in adjacent markets 700,000 new cobots by 20251)

Advanced Safe motion 2) position, force ~€350 semiconductor content control and object per cobot of which sensing ~€200 for power semiconductors2) ~€150 for sensors, µC, and security controllers Efficient and compact power supplies

IP protection and secured Efficient and authentication compact servo motor drive

Power Non-power

Source: 1) Barclays Equity Research, "The rise of co-bots: Sizing the market", 2016 2) Infineon estimate; excl. tools Courtesy: Franka Emika 2018-06-12 Copyright © Infineon Technologies AG 2018. All rights reserved. 13 Growing penetration of electric vehicles will drive roll-out of charging infrastructure

power charging point charging Charging infrastructure market; semi configuration time1) roll-out by rack performance3) content [units k] [USD m] 350 kW ~$3,500 (6 racks of 7 CAGR : 21% 129 60 kW each) min SiC-based (17-23) 1,970 1,980 32 40 110 130 96 150 kW ~$300 (5 racks of 16 11 30 kW each) Si-based 740 min 10 850 41

800 48 50 kW 40 48 ~$100 90 (3 racks of 950 1 20 kW each) min Si-based 9 48 950 710 30 27 180 8 20 kW2) ~$40 (2 racks of 120 2017 2020e 2023e 2017 2020e 2023e 10 kW each) min Si-based <15 kW 20 kW 30 kW >60 kW

1) to charge for a reach of 200 km 3) Source: Infineon estimate 2) incl. DC wall boxes

Power [W] ATV, IPC and PMM have 10M SiC leading technologies and products to address the existing and upcoming opportunities of wide- 1M Central PV inverter bandgap semiconductors SiC and GaN

Pile 100k

OBCOBC

String PV inverter 10k

Si GaN

1k Frequency [Hz]

1k 10k 100k 1M 10M

SiC power semiconductors SiC power semiconductors by application excl. xEV by product type excl. xEV

[USD m] [USD m] CAGR(17-27)

CAGR(17-27): 14.8%

1,493 1,493 Others 14.3% Full SiC 29.9% Aerospace/ Modules 20.4% military Hybrid SiC Traction 18.6% 14.2% Modules Photovoltaic 13.3% SiC JFETs 22.8%

671 Drives n.a. 671 SiC MOSFETs 13.7%

EV charging 54.6% 374 374

SiC Schottky 12.1% UPS/SMPS 12.2% barrier diodes

2017 2021e 2027e 2017 2021e 2027e

Sources: based on or includes content supplied by IHS Markit, Technology Group, "SiC and GaN Power Semiconductors Report - 2018", April 2018, mid case

eMarine › Ferries are perfect candidates for electrification, due to a) short travel distances, and b) long docking periods at established ports, where they can be charged Business › Electrification of propulsion and auxiliary inverters potential by FY28 › Charging infrastructure required Courtesy: Siemens AG Utility multicopters › Multicopters will enter freight and transport duties › Automotive OEMs incorporate multicopters in their Business mobility services potential by FY30 › First autonomous aerial passenger taxis by 2022 Courtesy: Volocopter eAviation › Fuel cost and regulations will drive electrification of airplanes Business › In 2035, more than 45% of all drives1) in airplanes potential will be (partially) electrified by FY35 Courtesy: Lilium GmbH Source: 1) mainly auxiliary power supplies such as aircon and pumps

Increasing worldwide demand for electrical energy is driving IPC's industrial businesses.

IPC is perfectly positioned to outperform in growth, advancing in established markets and in emerging applications.

SiC and digitalization are key technology trends driving IPC's future growth.

Dashboard

IPC FY17 revenue by application IPC FY17 revenue by region

Americas Japan

Others

Drives EMEA

Traction China Home Renewable appliances energies APAC

Revenue and segment result development [EUR m]

400 30%

Consolidation of IRF. 328 321 317 25% 293 296 300 280 279 269 271 265 264 241 249 20% 219 196 197 200 185 190 200 174 177 181 173 179 15% 138 144 10% 100 5%

39 27 26 26 13 33 27 33 40 44 28 20 32 41 23 26 42 37 24 44 55 60 48 62 0 0% -5 -3 Q1 Q1 Q1 Q1 Q1 Q1 Q1 FY12Q1 FY13Q1 FY14Q1 FY15Q1 FY16Q1 FY17Q1 FY18Q1 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Revenue IPC Segment Result IPC Segment Result Margin IPC

Infineon IGBT module* market share development

[USD bn]

CAGR(05-16): +8.1%

CAGR(05-16): +11.3%

23.8% 22.3% 22.5% 20.9% 21.5% 21.4% 20.1% 20.3% 20.5% 19.3% 4.03 4 20% 17.3% 3.50 3.46 19.4% 3.38 3.02 3.01 3.05 3 2.53 2.21 1.96 2 1.65 10% 1.47

1 0.78 0.78 0.82 0.65 0.61 0.63 0.76 0.44 0.51 0.42 0.25 0.32 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Infineon IGBT module revenue total IGBT module market market share

* including standard IGBT modules, IPMs, and other non-standard IGBT modules. Source: based on or includes content supplied by IHS Markit, Technology Group, several reports from 2006 through 2015 and 2017 Note: No backward revision of market shares and market sizes; except for year 2015

Infineon discrete IGBT market share development

[USD bn]

CAGR(05-16): +9.0%

CAGR(05-16): +15.8% Consolidation of IRF. 1.52 37.1% 37.1% 40%

1.12 28.2% 1.04 30% 1.0 24.4% 0.97 0.95 0.93 1 23.2% 24.1% 24.1% 23.7% 21.6% 0.85 19.1% 0.83 24.7% 20% 0.58 0.59 19.4% 0.48 0.49 0.51 0.36 0.35 0.27 0.27 0.32 10% 0.20 0.20 0.24 0.14 0.14 0.07 0.10 0.12 0 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Infineon discrete IGBT revenue total discrete IGBT market market share

Source: based on or includes content supplied by IHS Markit, Technology Group, several reports from 2006 through 2015 and 2017 Note: No backward revision of market shares and market sizes; except for year 2015

Infineon IPM market share development

[USD bn] CAGR(13-16): +1.4%

CAGR(13-16): +12.5% 1500 20% 1.260 1.200 1.141 1.190

1000

8.4% 8.7% 10% 7.1% 6.4% 500

73 89 101 104 0 0% 2013 2014 2015 2016 Infineon power revenue total power semiconductor market market share

Source: based on or includes content supplied by IHS Markit, Technology Group, reports from 2015 and 2017; Infineon.

AC alternating current

AI artificial intelligence

BoM bill of material

EMU electric multiple unit

GaN gallium nitride HMI human machine interaction

HST high-speed train

HW hardware IGBT insulated gate bipolar transistor IPM intelligent power module OBC on-board charger PFC power factor correction PMSM permanent magnet synchronous motor PV photovoltaic Si silicon SiC silicon carbide SMPS switch-mode power supply SW software UPS uninterruptable power supply

VSD variable speed drive

› since 2016: Division President Industrial Power Control › 2012: Member of the Management Board of the Power Management & Multimarket Division › 2011: Senior VP Technology and Production at Q-Cells SE in Bitterfeld, Germany › 2008 – 2011: Senior VP Technology at Q-Cells SE › 1997 – 2008: various position at Infineon

› Dr. Peter Wawer was born in Berlin, Germany, in 1967. He holds a Diploma in Electrical Engineering from the Technical University in Berlin where he also received his PhD. › He joined Infineon (Siemens AG until 1999) in 1997.