SYSTEMATIC ANNUAL REPORT 2014 GROWTH INFINEON TECHNOLOGIES AG AG TECHNOLOGIES INFINEON Infineon Technologies AG Annual Report 2014 INFINEON AT A GLANCE Page 40 Page 46 INDUSTRIAL AUTOMOTIVE POWER CONTROL Applications Applications • Chassis and comfort electronics • Charger station for electric vehicles • Electric and hybrid vehicles • Energy transmission and conversion • Powertrain • Home appliances • Safety • Industrial drives • Security • Industrial vehicles • Renewable energy generation • Traction • Uninterruptable power supplies Product range Product range • Microcontroller (8-bit, 16-bit, 32-bit) • IGBT module solutions including IGBT stacks for automotive and industrial applications • IGBT modules (high-power, medium-power, • Software development platform DAVE™ low-power) • Discrete power semiconductors • Discrete IGBTs • IGBT modules • Bare die business • Voltage regulators • Driver ICs • Power ICs • Bus interface devices (CAN, LIN, FlexRay) • Magnetic and pressure sensors • Wireless transmit and receive ICs (RF, radar) Key customers ¹ Key customers ¹ Autoliv / Bosch / Continental / Delphi / Denso / ABB / Alstom / Bombardier / CSR Times / Delta / Hella / Hitachi / Hyundai / Lear / Mando / Mitsubishi / Emerson / Goldwind / Rockwell / Schneider Electric / TRW / Valeo Semikron / Siemens / SMA Solar Technology / Tesla / Vestas Market position ² Market position ² 2 1 with a market share of 9.6 % with a market share of 12.3 % Source: Strategy Analytics, April 2014 for discrete power semiconductors and modules Source: IHS Inc., September 2014 1 In alphabetical order. Infineon’s major distributions customers are Arrow, Avnet, Beijing Jingchuan, Tomen and WPG Holding. 2 All figures for 2013 calendar year. The market share of the five largest competitors is shown in the “Market position” section of the relevant segment. The figures provided in those sections with respect to changes in market share relate to the 2012 and 2013 market share figures as calculated in 2014. Due to changes in the way the market is analyzed, these figures may differ from the 2012 market share figures reported in 2013. Infineon Technologies AG, Neubiberg (Germany), offers semiconductor and system solutions addressing three INFINEON central challenges to modern society: energy efficiency, mobility, and security. In the 2014 fiscal year (ending September 30), the Company reported revenues of 4.3 billion euros with approximately 29,800 employees worldwide. Infineon is listed on the Frankfurt Stock Exchange (ticker symbol: IFX) and in the USA on the AT A GLANCE over-the-counter market OTCQX Inter national Premier (ticker symbol: IFNNY). Page 40 Page 46 Page 52 Page 58 INFINEON AT A GLANCEINFINEON AT INDUSTRIAL POWER MANAGEMENT CHIP CARD AUTOMOTIVE POWER CONTROL & MULTIMARKET & SECURITY Applications Applications Applications Applications • Chassis and comfort electronics • Charger station for electric vehicles • Cellular network infrastructure • Authentication • Electric and hybrid vehicles • Energy transmission and conversion • Lightmanagement and LED lighting systems • Government identification • Powertrain • Home appliances • Micro-inverter for photovoltaic rooftop systems • Health care cards • Safety • Industrial drives • Mobile devices • Mobile communication • Security • Industrial vehicles • Power supplies • Near Field Communication (NFC) • Renewable energy generation • Payment systems • Traction • Ticketing, access control • Uninterruptable power supplies • Trusted computing Product range Product range Product range Product range • Microcontroller (8-bit, 16-bit, 32-bit) • IGBT module solutions including IGBT stacks • Discrete low-voltage and high-voltage power transistors • contact-based security controllers for automotive and industrial applications • IGBT modules (high-power, medium-power, • Driver ICs • contactless security controllers • Software development platform DAVE™ low-power) • Control ICs • Dual-interface security controllers • Discrete power semiconductors • Discrete IGBTs • RF power transistors (contact-based and contactless) • IGBT modules • Bare die business • Small-signal components: • Voltage regulators • Driver ICs – TVS (Transient Voltage Suppressor) diodes • Power ICs – LNAs (Low Noise Amplifiers) for satellite navigation • Bus interface devices (CAN, LIN, FlexRay) • CMOS RF switches for antenna modules • Magnetic and pressure sensors • Antenna tuning ICs • Wireless transmit and receive ICs (RF, radar) • MEMS and ASICs for silicon microphones • Customized chips (ASICs) Key customers ¹ Key customers ¹ Key customers ¹ Key customers ¹ Autoliv / Bosch / Continental / Delphi / Denso / ABB / Alstom / Bombardier / CSR Times / Delta / AAC / Artesyn / Dell / Delta / Emerson / Ericsson / Beijing Watch Data / Gemalto / Giesecke & Devrient / Hella / Hitachi / Hyundai / Lear / Mando / Mitsubishi / Emerson / Goldwind / Rockwell / Schneider Electric / Hewlett-Packard / Huawei / LG Electronics / Lite-On / Hewlett-Packard / Microsoft / Oberthur Technologies / TRW / Valeo Semikron / Siemens / SMA Solar Technology / Osram / Quanta / Samsung / Tridonic / ZTE Safran Morpho / US Government Printing Office Tesla / Vestas Market position ² Market position ² Market position ² Market position ² 2 1 1 2 with a market share of 9.6 % with a market share of 12.3 % with a market share of 13.6 % with a market share of 21.7 % Source: Strategy Analytics, April 2014 for discrete power semiconductors and modules standard MOSFET power transistors for microcontroller-based chip card ICs Source: IHS Inc., September 2014 Source: IHS Inc., September 2014 Source: IHS Inc., July 2014 1 In alphabetical order. Infineon’s major distributions customers are Arrow, Avnet, Beijing Jingchuan, Tomen and WPG Holding. 2 All figures for 2013 calendar year. The market share of the five largest competitors is shown in the “Market position” section of the relevant segment. P The figures provided in those sections with respect to changes in market share relate to the 2012 and 2013 market share figures as calculated in 2014. An overview of our worldwide locations can be found on pages 112 and 113 in the chapter “Infineon worldwide”. Due to changes in the way the market is analyzed, these figures may differ from the 2012 market share figures reported in 2013. Infineon key data As and for the fiscal years ended September 30 (under IFRS) ¹ Fiscal year from October 1 to September 30 2014 2013 2014/2013 € in millions in % of € in millions in % of Change revenue revenue in % Revenue by region 4,320 3,843 12 Europe, Middle East, Africa 1,707 39 1,567 41 9 Therein: Germany 859 20 795 21 8 Asia-Pacific (w/o Japan) 1,845 43 1,560 40 18 Therein: China 868 20 710 18 22 Japan 284 7 227 6 25 Americas 484 11 489 13 (1) INFINEON AT A GLANCEINFINEON AT Revenue by Segment 4,320 3,843 12 Automotive 1,965 45 1,714 44 15 Industrial Power Control 783 18 651 17 20 Power Management & Multimarket 1,061 25 987 26 7 Chip Card & Security 494 11 463 12 7 Other Operating Segments 22 1 26 1 (15) Corporate and Eliminations (5) 0 2 0 (350) Gross profit/Gross margin 1,647 38.1 1,323 34.4 24 Research and development expenses (550) 12.7 (525) 13.7 5 Selling, general and administrative expenses (496) 11.5 (440) 11.4 13 Operating income 525 325 62 Income from continuing operations 488 283 72 Gain (loss) from discontinued operations, net of income taxes 47 (11) 527 Net income 535 272 97 Segment Result/Segment Result Margin 620 14.4 377 9.8 64 Property, plant and equipment 1,700 1,600 6 Total assets 6,438 5,905 9 Total equity 4,158 3,776 10 Net cash provided by operating activities from continuing operations 988 610 62 Net cash used in investing activities from continuing operations (272) (328) 17 Net cash used in financing activities from continuing operations (179) (165) (8) Free cash flow ² 317 235 35 Depreciation and amortization 514 466 10 Capital expenditure 668 378 77 Gross cash position ³ 2,418 2,286 6 Net cash position ⁴ 2,232 1,983 13 Basic earnings per share in € 0.48 0.25 92 Diluted earnings per share in € 0.48 0.25 92 Dividend per share in € ⁵ 0.18 0.12 50 Equity ratio 64.6 % 63.9 % 1 Return on equity ⁶ 12.9 % 7.2 % 79 Return on assets ⁷ 8.3 % 4.6 % 80 Inventory intensity ⁸ 11.0 % 10.3 % 7 Debt-to-equity ratio ⁹ 4.5 % 8.0 % (44) Debt-to-total-capital ratio ¹⁰ 2.9 % 5.1 % (43) Return on Capital Employed (RoCE) ¹¹ 20.3 % 14.1 % 44 Employees Infineon as of September 30 29,807 26,725 12 1 Columns may not add due to rounding. 2 Free cash flow: for definition G see glossary, page 275. 3 Gross cash position: for definition G see glossary, page 276. 4 Net cash position: for definition G see glossary, page 276. 5 A dividend per share of €0.18 for the 2014 fiscal year will be proposed to the Annual General Meeting on February 12, 2015. 6 Return on equity = net income divided by total equity. 7 Return on assets = net income divided by total assets. 8 Inventory intensity = inventories (net) divided by total assets. 9 Debt-to-equity ratio = long-term and short-term debt divided by total equity. 10 Debt-to-total-capital ratio = long-term and short-term debt divided by total assets. 11 Return on Capital Employed (RoCE): for definition G see glossary, page 276. Whatever we do, we do it systematically: We are well positioned in markets that promise continued growth: energy efficiency, mobility and security. INFINEON AT A GLANCEINFINEON AT Our strategic approach “Product to System” additionally enhances our ability to leverage our comprehensive technology and product expertise in key markets. Increasingly efficient capacity