Infineon Technologies and Saifun Semiconductors Announce Joint Venture To Develop Flash Memory Technology

Joint News Release by Infineon Technologies and Saifun Semiconductors

Munich, Germany / Netanya, Israel - May 8, 2001 - Infineon Technologies AG (FSE/NYSE: IFX) and Saifun Semiconductors Ltd. today announced that they have established a joint venture, named Ingentix. The new company will develop, manufacture and market flash memory products based on Saifun’s patented Nitrided Read Only Memory (NROM) technology.

Ingentix initially will focus on developing MultiMediaCard™ storage products, the world’s smallest memory cards. The company expects to roll out an extremely low-cost Flash-MultiMediaCard, with a memory capacity of 64 megabyte (MB), in the third quarter of the year 2002. In the long term, Ingentix intends to apply NROM flash technology to other markets and applications.

Infineon Technologies, a principal developer of the MultiMediaCard and the world’s leading supplier of integrated circuits for smart card applications, will license its know-how with respect to secure card storage and security controllers for smart card applications to Ingentix. Saifun is licensing its NROM-based flash memory technology and embedded flash technology to Ingentix. Furthermore, the joint venture benefits from Infineon’s experience in DRAM technology and manufacturing capacity.

Ingentix will be located in Munich, Germany, and Netanya, Israel. Infineon holds a majority share of 51 percent, while Saifun owns 49 percent of Ingentix. The two companies will share in the entrepreneurial management. The companies also announced that they have named Yair Alpern as the chief executive officer of Ingentix and Juergen Hammerschmitt as the chief marketing officer. Initially, the main sales activities will be handled via Infineon’s existing distribution channels in Germany.

Dr. Boaz Eitan, president and CEO at Saifun Semiconductors and member of the Ingentix board, said: “Combining Saifun’s NROM technology and Infineon’s expertise in controllers, security and manufacturing processes, Ingentix will not only provide the benchmark technology of the future, but is well-positioned to obtain cost leadership. We expect the joint venture to further improve the position of MultiMediaCard as the world’s leading flash memory card.”

Dr. Juergen Kuttruff, vice president and chief operating officer at Infineon’s Security & Chip Card ICs business group, said: “The winning combination of Saifun’s and Infineon’s complementary technologies will place Ingentix far ahead of its competitors and will enable low-cost MultiMediaCard products to meet the demands of future security-sensitive applications, such as digital rights management schemes.”

The new Flash-MultiMediaCard contains a memory IC and a MultiMediaCard-optimized chip card controller. The product will be jointly developed in Germany and Israel. The Flash-MultiMediaCards will be manufactured in Infineon’s DRAM production line in Dresden, benefiting from high synergy effects between NROM and DRAM technologies.

About NROM technology

Saifun has developed a leading-edge non-volatile memory (NVM) technology. This technology places two physical bits per cell, enabling production of the most cost-effective, best performing NVM products in the market. The NROM technology is an ideal solution for mass storage flash, code flash applications and embedded applications.

About MultiMediaCards

The MultiMediaCard is the world’s smallest memory card, extremely rugged, light-weight, energy efficient, fast and cost-effective. With its integrated interface the MultiMediaCard is an easy-to-install memory device that is particularly suitable for use in portable applications such as mobile phones, personal digital assistants (PDA), and e-books, as well as entertainment electronics, such as digital cameras, MP3 player and toys.

About Saifun Semiconductors

Saifun Semiconductors Ltd. has developed and patented the best density per price ratio NVM (non-volatile memory) solutions in the semiconductors market. Saifun is a fabless company whose breakthrough NROM technology is revolutionizing the design and development of NVM. The company’s flash memory products serve the fast growing markets for mobile systems, such as cellular phones, PDAs, digital cameras and Internet appliances. Backed by strategic investors, among them M-System and Infineon Technologies, Saifun partners with leading global semiconductor and electronic system suppliers to jointly accelerate the development of new flash-based memory products. Saifun was founded in 1998 by Dr. Boaz Eitan and is recognized as one the most promising semiconductor start-up companies. Further information at www.saifun.com

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for applications in the wired and wireless communications markets, for security systems and smartcards, for the automotive and industrial sectors, 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 the fiscal year 2000 (ending September), the company achieved sales of Euro 7.28 billion with about 29,000 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

MultiMediaCard™ is a trademark of Infineon Technologies AG
Saifun NROM™ is a trademark of Saifun Semiconductors Ltd.