Infineon Unable to Meet the State of Saxony’s Conditions for Qimonda Aid

Neubiberg, Germany – December 16, 2008 – Infineon appreciates both the federal state of Saxony’s offer to support Qimonda AG with a loan and the high regard for “Buried Wordline” technology that the offer implies.

The state of Saxony has offered to grant a loan of Euro 150 million under regular market terms and conditions to help rescue Qimonda AG. Tied to this offer was the requirement that Infineon make an “unconditional permanent contribution of Euro 150 million in cash”.

As stated clearly to the state of Saxony at an early point in the negotiations, this requirement exceeds Infineon’s possibilities by a wide margin. “We deeply regret that the state of Saxony has not taken our proposals into account,” says Peter Bauer, CEO of Infineon Technologies AG. “In spite of the extremely difficult situation of the world market and the semiconductor industry, Infineon has offered to provide a loan in combination with the sale of a substantial package of Qimonda shares to the state of Saxony. This offer represents the largest possible burden we can reasonably take on.”

Infineon Technologies AG remains open to further negotiations with the government of the state of Saxony.

Infineon Technologies AG, Neubiberg, Germany, offers semiconductor and system solutions addressing three central challenges to modern society: energy efficiency, communications, and security. In the 2008 fiscal year (ending September), the company reported sales of Euro 4.3 billion with approximately 29,100 employees worldwide. With a global presence, Infineon operates through its subsidiaries in the U.S. from Milpitas, CA, in the Asia-Pacific region from Singapore, and in Japan from Tokyo. Infineon is listed on the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Infineon currently holds a 77.5 percent equity interest in Qimonda AG, a leading supplier of DRAM memory products. Qimonda is separately listed on the New York Stock Exchange under the ticker symbol “QI”.