Infineon Technologies at the Annual General Meeting 2007: Headway Made in Realignment - Successful Reorganization of Unprofitable Operations - Concretized Earnings Target of 10 Percent

Feb 15, 2007 | Business & Financial Press

Munich, February 15, 2007  - Dr. Wolfgang Ziebart, President and CEO of Infineon Technologies AG, commented at the Annual General Meeting on the results of the last financial year, the strategic alignment and the company’s mid-term aims. Ziebart affirmed that Infineon seeks to achieve at least 10 percent growth per annum and an EBIT margin of likewise at least 10 percent.  “We will do our utmost to secure a balanced result for the current financial year.  In the next financial year we should have advanced halfway to accomplishing this target.  And in the year after that we should then be close to our goal,” said Ziebart.
Ziebart outlined that this objective is to be attained by acquisitions and mainly by organic growth.  “Over the last financial year we have forged ahead with our restructuring policies and have made significant progress along our route to profitable growth,” said Ziebart.  He outlined that Infineon would now focus all its efforts on bringing all the business segments into the black by no later than the fourth quarter of the current financial year.  The exception is the Mobile Communications business.  “Here we adhere to our statement that breakeven will be accomplished in the fourth quarter of the calendar year,” declared the President and CEO.
In the last financial year the price of the Infineon share rose by altogether 14 percent compared to the previous year, outstripping the performance of the global semiconductor market.  Since the carve-out of the Memory Products segment, the Infineon share has secured an advance of over 40 percent (Euro 8.44 to Euro 11.86 on February 9, 2007).  “This increase in value has been engineered by the realignment of Infineon and molded by the carve-out of Qimonda and reorganization of non-profitable operations,” explained Ziebart.  “We have restored business operations with sales aggregating € 700 million to profitability.”  In the Automotive, Industrial & Multimarket segment the operations involved are those with discrete components, sensors and chip card ICs.  In the Communication Solutions segment, the tuner and RF power transistor businesses have also moved out of loss territory.  The wireline communication unit in the Communication Solutions segment already achieved the turnaround at the end of the 2005 financial year.
In the Communication Solutions segment, Infineon’s endeavors to win new customers for the mobile platforms have been crowned with success.  Major new customers have been gained in Nokia, LG-Electronics, Panasonic and Samsung, widening the customer base.  The last financial year saw the end to the loss-generating period of chip card IC business.  Infineon now faces the task of consolidating this business and producing sustained profit.  First successes: the company has been awarded a further prestigious contract in the chip card sector with Mastercard.  The US market research firm Frost & Sullivan pegs the average annual growth projection of the contactless payment card market at 63 percent in the next five years.
“Last year we presented our new manufacturing strategy in which a vital element is our intent to continue in-company production in those areas where product and manufacturing technology are closely interlinked and where we expect this policy to yield a competitive advantage,” explained Ziebart.  This was the case, so he said, particularly with power semiconductors and with analog and mixed signal circuits.  In the case of advanced logic, i.e. logic circuits of state-of-the-art technologies, Infineon pursues a policy of foundry production.
A further important mission on which the company has embarked is the reduction of complexity within the organization.  “Complexity not only costs money, it also impairs performance for the customer and detracts from employee motivation.  That is why last year we launched ICoRe, the Infineon Complexity Reduction Program, and we have already put many of the measures in place.  We anticipate that it will deliver savings of 50 million euros in the current financial year.  From the next financial year onwards it will then be 80 million euros,” said Ziebart.
Focusing on three major subject areas
Following the carve-out of Qimonda, the company is focusing on three key areas of business: energy efficiency, mobility and security.
Infineon’s products ensure improved energy efficiency of motors, drives and electronic devices.  Even today, the power semiconductors are the basis of efficient energy management in switch-mode power supplies for PCs or drive controls of electric motors in washing machines, industrial plants and trains.  The components are beneficial mainly in private households, where most energy is consumed, reducing the power demand in refrigerators, air conditioners and electric ranges.  “A classical electric range is an energy guzzler.  Instead of just warming up the soup, it heats the entire stovetop,” said Ziebart, continuing: “Induction cookers equipped with our IGBTs – a special type of power transistor – can save up to 70 percent of the energy here.  A further example is the subject of lighting.  It is among the most inefficient energy consumers and accounts for 15 percent of the world’s total electrical power demand.  A lamp with a suitable electronic ballast cuts this demand to only a quarter of the energy needed by conventional light bulbs.”  CooIMOS products from Infineon create this savings potential.  Wind power stations, solar energy systems, fossile-fueled power plants and transformer stations also operate with semiconductors from Infineon.
Chips from Infineon are used in the field of mobility for access to information on the move, whether over mobile phone, broadband internet access, or wireless applications. Present-day communications technology brings people together and eliminates geographic constraints.  The quest is to ensure access to persons and information anytime and anywhere.  The wireless and wireline access technologies from Infineon play a decisive role here.  Product innovations in the last financial year, making phoning, surfing and watching TV over one and the same line come true, are illustrative of this focus.  A further technological highlight is the world’s smallest GPS receiver recently announced by Infineon.  The CMOS-GPS receiver in single-chip design was developed for mobile phones, smart phones and portable navigation systems.  
In the security arena, semiconductors from Infineon ensure the secure transmission and storage of data, as well as personal protection, for instance in road traffic.  The security requirements in the private sector but also in the milieu of authorities are growing, as is the need for privacy protection and the protection of physical and intellectual property (e.g. passports, ID cards and health cards).  In addition, the importance of customized chips with security functions, as are used for instance by Mastercard for the new cotactless credit card function project, is gaining in momentum.  Or take Infineon’s trusted platform module: a security chip including software suite, which defeats unauthorized data access to notebooks and PCs – for security in PCs and hence for secure ecommerce as a whole.
“New Infineon”
Following the carve-out of Qimonda, the new Infineon is focused on the Logic sector. “New Infineon” is a company generating sales of over four billion euros with approximately 30,000 employees, of which 6,000 alone are engaged in Research & Development.  “New Infineon” invests some 800 million euros in Research & Development, and over 22,900 patents secure the company’s technological leadership.  Infineon is the number 1 in power semiconductors, the number 1 in access products for broadband communication and number 1 in high-frequency solutions for wireless communication. The semiconductor manufacturer has been a market leader for chip card ICs for years, holding an almost 30-percent market share, and in the automobile industry Infineon has a very strong number 2 position. Go to for further information

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