New German Passport to Contain Contactless Secure Chips from Infineon

Munich, Germany – June 2, 2005 – The German government is using highly secure chips developed by Munich-based semiconductor manufacturer Infineon Technologies AG (FSE/NYSE: IFX) in an effort to make counterfeiting and unauthorized use virtually impossible in future electronic passports, which the German Passport Office intends to issue as of November 2005. Infineon will also be supplying a special chip package developed for identity cards and passports as well as the inlay containing the antenna and its connection to the chip. There are currently around 24 million German passports in circulation, which are usually valid for ten years, with an annual replacement and renewal rate of about ten percent.

In the new electronic passport, the printed information about the bearer’s identity – such as the bearer’s name, date of birth, and photo, and the passport’s validity period and number – will also be stored encrypted on a chip. And, starting no later than March 2007, fingerprints of each of the bearer’s index fingers will also be stored in encrypted form. Current plans call for the chip to be invisibly integrated into the front cover.

The German company “Bundesdruckerei” will be producing the passports and providing the necessary infrastructure including the background system and reading devices, etc. Infineon is one of the two semiconductor suppliers for the German passport.

The high-security chip in the German passport

The data stored on the chip can only be accessed when the passport is opened, and are transmitted contactlessly to an authorized and certificated read-write device. More than 50 individual security mechanisms burned deep inside the Infineon chip using state-of-the-art technology will help ensure that personal data is protected against unauthorized read-out and manipulation. Among other security features, the chips use the RSA method (a special computing algorithm for encrypting data, named after its inventors Ronald L. Rivest, Adi Shamir, and Leonard Adleman) to provide extremely high security. (It is estimated that a billion standard PCs operating in parallel would have to keep computing for about a million years if hackers wanted to attempt to access data encrypted with this system simply by trial and error.) The security mechanisms integrated into Infineon’s chips also include active protective shields on the surface of the chip and sensors that prevent hackers from being able to read out the chip by applying different voltages.

“Germany is among the first countries to introduce the electronic passport,” said Peter Bauer, Executive Vice President of Infineon Technologies AG and Head of the Automotive, Industrial and Multimarket business group. “It’s a feather in Infineon’s cap for our chips to be used in the new German passport. We’ve equipped our chips with the best possible protection mechanisms. A host of security certificates prove that Infineon’s security controllers have successfully passed the world’s most stringent security tests conducted according to international standards.”

The electronic passport are the passports of the future

Conditions of entry into countries are set to be tightened up throughout the world, starting at the end of 2005. The United States of America, for instance, will require people from countries with Visa-free entry privileges to have an electronic passport with personal data contained on an embedded chip beginning in October 2005 (current timetable). Visa-free entry into most countries outside the EU will be possible using the chip-based passport. The higher fees charged for issuing a biometric visa will not apply and less time will be spent at checkpoints.

The German passport complies with EU regulations approved in December 2004 which require all EU member states to start issuing electronic passports on which facial and fingerprint features are electronically stored by January 2008.

Infineon supplies its security chips to many of the countries that are introducing electronic passports or have launched test runs either at home or in collaboration with neighboring countries. Examples include the electronic identity card in chip-card format in Italy, the United Arab Emirates, Hong Kong and Macao, and Australia, identity cards in Belgium, passports in the Netherlands, and the US Department of Defense Common Access Card.

Infineon has for years been the global market leader

Based on volumes and sales revenue for card applications, Infineon ranks number one in the world. According to the US market research institute Gartner, Infineon was the market leader in chips for card applications for the seventh time in a row in 2004. As the supplier of around 1.26 billion chips, the company had a 47 percent share of the total market of almost 2.7 billion card chips. By sales, Infineon’s share was 38 percent of the market, which Gartner valued in 2004 at a total of around US-Dollar 1.85 billion.

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for automotive, industrial and multimarket sectors, for applications in communication, as well as memory products. With a global presence, Infineon operates through its subsidiaries in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In fiscal year 2004 (ending September), the company achieved sales of Euro 7.19 billion with about 35,600 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.