##### Table of Contents



As filed with the Securities and Exchange Commission on
    November 16, 2007
    UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 20-F
  (Mark One)o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
    12(g) OF THE SECURITIES EXCHANGE ACT OF 1934ORþ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended September 30, 2007.ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934ORo

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report   For the transition period from
    
    to
  Commission file number 001-32972
 QIMONDA AG
 (Exact name of Registrant as
    specified in its charter)
  Gustav-Heinemann-Ring 212
 81739 Munich, Germany
 +(49)(89) 60088-0
 (Address of principal executive
    offices)
      Securities registered or to be registered pursuant to Section
    12(b) of the Act.
  Title of Each Class:

Name of Each Exchange on Which Registered:American Depositary Shares representing Qimonda AG


New York Stock Exchangeordinary shares of no par valueQimonda AG ordinary shares of no par value


New York Stock Exchange*   *
    
    Not for trading, but only in
    connection with the registration of American Depositary Shares.  Securities registered or to be
    registered pursuant to Section 12(g) of the Act.
 None
 (Title of class)
  Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the
    Act.
 None
 (Title of class)
       Yes þ     No o
   Yes o     No þ
     Yes þ     No o     Not
    applicable o.
   þ Large
    accelerated
    filer     o Accelerated
    filer     o Non-accelerated
    filer
   Item 17 o     Item 18 þ
   Yes o     No þ
 (APPLICABLE ONLY TO ISSUERS
    INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
   Yes o     No o




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CROSS
    REFERENCES TO
    FORM 20-F
  PagePART I:Item 1:


Identity of Directors, Senior Management and Advisers


n/aItem 2:


Offer Statistics and Expected Timetable


n/aItem 3:


Key InformationSelected Financial Data


30Exchange Rate Information


140Risk Factors


3Item 4:


Information on the Company


2History and Development of the
    Company


81Business Overview


78Organizational Structure


81, 139Property, Plant and Equipment


116Item 4A


Unresolved Staff Comments


noneItem 5:


Operating and Financial Review and Prospects


32Operating Results


45Liquidity and Capital Resources


57Research and Development; Patents and
    Licenses


91, 103Trend Information


68Off-Balance Sheet Arrangements


66Contractual Obligations


61Item 6:


Directors, Senior Management and EmployeesDirectors and Senior Management


117Compensation


122Board Practices


118Employees


107Share Ownership


124Item 7:


Major Shareholders and Related Party TransactionsMajor Shareholders


126Related Party Transactions


127Item 8:


Financial Information


F-1Litigation


108Dividend Policy


139Significant Changes


140Item 9:


The Offer and ListingPrice History of the Stock


140Markets


140Item 10:


Additional InformationArticles of Association


135Material Contracts


148Exchange Controls


145Taxation


141Documents on Display


146Subsidiary Information


139 i




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PageItem 11:


Quantitative and Qualitative Disclosure About
    Market Risk


64Item 12:


Description of Securities Other Than Equity Securities


n/aPART II:Item 13:


Defaults, Dividend Arrearages and Delinquencies


noneItem 14:


Material Modifications to the Rights of Security
    Holders and Use of Proceeds


147Item 15:


Controls and Procedures


146Item 16A:


Audit Committee Financial Expert


148Item 16B:


Code of Ethics


148Item 16C:


Principal Accountant Fees and Services


148Item 16D:


Exemption from the Listing Standards for Audit
    Committees


148Item 16E:


Purchases of Equity Securities by the Issuer and Affiliated
    Purchasers


nonePART III:Item 18:


Financial Statements


F-1Item 19:


Exhibits (See Exhibit Index)


  ii




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CONTENT
    OVERVIEW
  
  Content Overview


iiiPRESENTATION OF FINANCIAL AND OTHER
    INFORMATION


1Forward-Looking Statements And Market Data


1Company Information


2Use of
    Non-U.S.GAAP
    Financial Measures


2RISK FACTORS


3Risks related to the semiconductor memory
    industry


3Risks related to our operations


7Risks related to our carve-out as a stand-alone
    company and our continuing relationship with Infineon


22Risks related to the securities markets and
    ownership of our shares or ADSs


26SELECTED COMBINED AND CONSOLIDATED FINANCIAL
    DATA


30OPERATING AND FINANCIAL REVIEW


32Executive Summary


32Overview


33Factors that Affect our Results of Operations


36Strategic Cooperations


38Critical Accounting Policies


39Results of Operations


45Financial Condition


56Liquidity


57Capital Requirements


60Quantitative and Qualitative Disclosure About
    Market Risk


64Off-Balance Sheet Arrangements


66Recent Accounting Pronouncements


66Recent Events


67Outlook


68THE SEMICONDUCTOR MEMORY INDUSTRY


69Semiconductor Memory Product Features


69DRAM Technologies


71The Semiconductor Manufacturing Process


72DRAM Applications


73Drivers of DRAM Demand and Recent Trends


74Drivers of DRAM Supply and Recent Trends


75OUR BUSINESS


78Overview


78Our Strengths


79Our Strategy


80Our History


81Benefits of our Carve-out


82Products and Applications


82Customers, Sales and Marketing


88Competition


90Research and Development


91Strategic Alliances and Agreements


94Facilities And Manufacturing


99Intellectual Property


103Equipment


106 iii




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Raw Materials


106Employees


107Backlog


108Legal Matters


108Environmental Protection, Safety and Health


114Real Property


116MANAGEMENT


117Overview of Corporate Governance Structure


117Supervisory Board


118Management Board


121Employee Stock Option Program


124PRINCIPAL SHAREHOLDERS


126RELATED PARTY TRANSACTIONS AND RELATIONSHIPS


127With Infineon


127With Management


133With Siemens


134ARTICLES OF ASSOCIATION


135Share Capital


135Authorized Capital


135Conditional Capital


136Preemptive Rights


136Shareholders Meetings and Voting Rights


136Dividend Rights


137Liquidation Rights


138Repurchase of Our Own Shares


138Corporate Purpose of Our Company


138Registration of the Company with Commercial
    Register


138ADDITIONAL INFORMATION


139Group Structure


139Dividend Policy


139Significant Changes


140Market Information


140Exchange Rates


140Taxation


141Exchange Controls and Limitations Affecting
    Shareholders


145Documents on Display


146Controls and Procedures


146Use of Proceeds


147Audit Committee Financial Expert


148Principal Accountant Fees and Services


148Code of Ethics


148Exemptions from the Listing Standards for Audit
    Committee


148Material Contracts


148GLOSSARY


149FINANCIAL STATEMENTS


F-1EXHIBIT INDEX


Exhibit 1(ii)(A)Exhibit 1(ii)(B)Exhibit 4(i)(Z)Exhibit 12(i)Exhibit 12(ii)Exhibit 13Exhibit 14Exhibit 99(i)   iv




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PRESENTATION
    OF FINANCIAL AND OTHER INFORMATION
        tm ® ® ® ®
      Forward-looking
    statements and market data
       1




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Company
    Information
  http://www.qimonda.com.
  Use
    of Non-U.S.
    GAAP Financial Measures
  non-U.S. GAAP Non-U.S. GAAP non-U.S. GAAP non-U.S. GAAP
 2




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RISK
    FACTORS
  Investing in our ADSs involves a high degree of risk. You
    should carefully consider the risk factors set forth below and
    all other information contained in this annual report, including
    our combined and consolidated financial statements and the
    related notes, before making an investment decision regarding
    our securities. The risks described below are those significant
    risk factors, currently known and specific to us that we believe
    are relevant to an investment in our securities. If any of these
    risks materialize, our business, financial condition or results
    of operations could suffer, the price of our ADSs could decline
    and you could lose part or all of your investment. Additional
    risks not currently known to us or that we now deem immaterial
    may also harm us and adversely affect your investment in our
    ADSs.
  Risks
    related to the semiconductor memory industry
  The
    DRAM industry is subject to cyclical fluctuations, including
    recurring periods of oversupply, which result in large swings in
    our operating results, including large losses.
  ramp-up build-up
  The
    reluctance of DRAM manufacturers to run their facilities at less
    than full capacity can cause oversupply-driven downturns to last
    for prolonged periods, keeping DRAM prices low.
   3




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We
    expect the average selling prices of the semiconductor memory
    products we sell to continue to decline irrespective of cyclical
    fluctuations in the industry, and if prices decrease faster than
    we are able to reduce our costs, our margins will be adversely
    affected.
    To
    reduce our costs, we need to make investments to implement
    improvements and developments in our process technologies
    quickly. If we are unable to do so, we may not be able to reduce
    per-megabit manufacturing costs quickly enough to keep pace with
    declines in average selling prices for DRAMs and other memory
    products.
    Demand
    weakness in any of the end markets that use our products,
    especially the personal computer industry, could have a material
    adverse effect on our results of operations.
   4




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A
    mismatch between the specific DRAM chips we or the DRAM industry
    generally are producing and the platforms for which equipment
    manufacturers require DRAMs can lead to declining prices for the
    DRAMs we produce and consequently to material inventory
    write-downs.
      We may
    not respond quickly enough to the rapid technological change in
    our industry.
    
    increasing the amount of data storage capacity per DRAM chip, or
    density (DRAM manufacturers have generally doubled the density
    of DRAM chips approximately every 24 months);
    increasing data transfer rates, or bandwidth, between the DRAM
    and the central processing unit, or CPU, of the host device,
    such as a PC;
    decreasing operating voltage and power consumption of the
    DRAM; and
    reducing and tailoring the form factor of DRAM chips and
    components with a given density,  ramp-up
   5




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The
    semiconductor memory industry is characterized by intense
    competition, which could reduce our sales or put continued
    pressure on our prices.
      
    design and develop new products and introduce them in a timely
    manner;
    develop and successfully implement improved manufacturing
    process technologies to reduce our per-megabit costs; and
    broaden our DRAM customer base, to reduce our dependence on a
    small number of customers and position us to increase our market
    share.    
    the extent to which and the pace at which customers incorporate
    our memory products into their devices;
    whether electronics manufacturers design their products to use
    DRAM configurations or new types of memory products that we do
    not offer;
    the number and nature of our competitors; and
    general economic conditions.   6




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Our
    results of operations are subject to the effects of seasonal
    sales patterns that apply to the demand for the products our
    customers sell and these seasonal sales patterns may interact
    with existing DRAM supply and demand dynamics in a way that
    further harms our results.
    Risks
    related to our operations
  Some
    of our agreements with strategic partners, such as our Inotera
    Memories, Inc. joint venture with Nanya, have restrictions on
    transfers of the shares of the ventures they create that could
    cause our ownership or equity interest in these ventures to
    revert to Infineon, if Infineon ceases to be our majority
    owner.
         7




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We
    have suffered substantial losses in the recent past. Even during
    profitable years, we have suffered losses in individual
    quarters. Losses in the future and the unpredictability of our
    results may cause our share price to fall.
             8




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Our
    results may suffer if we are not able to adequately forecast
    demand for our products.
      If we
    are unable to respond to customer demand for diversified DRAM
    products or are unable to do so in a cost efficient manner, we
    may fail to gain, or even lose, market share.
    We may
    be unable to recoup our investments if we bring new production
    facilities on-stream in times of overcapacity.
    ramp-up
 9




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We may
    lose sales or customers or incur losses if we are unable to
    successfully modify existing production facilities or bring new
    production facilities on-stream in times of high
    demand.
    ramp-up
  The
    loss of one or more of our significant customers may adversely
    affect our business.
   10




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Sanctions
    in the United States and other countries against us and other
    DRAM producers for anticompetitive practices in the DRAM
    industry and related civil litigation may have a direct or
    indirect material adverse effect on our
    operations.
  non-U.S. direct
   11




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An
    unfavorable outcome in the pending securities litigation against
    Infineon or the incurrence of significant costs in the defense
    of this litigation may have a direct or indirect material
    adverse effect on our operations.
     12




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We may
    not be able to protect our proprietary intellectual property or
    obtain rights to intellectual property of third parties needed
    to operate our business.
          We may
    be accused of infringing the intellectual property rights of
    others.
   13




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and/or
  We may
    face difficulties in implementing next generations of our
    proprietary DRAM trench cell architecture.
      We may
    face difficulties in shifting to new memory technologies that
    are not based on silicon
   14




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We may
    misallocate our research and development resources or have
    insufficient resources to conduct the necessary level of
    research and development to remain competitive.
    We
    have a limited number of suppliers of manufacturing equipment
    and raw materials, and our business would be harmed if they were
    to interrupt supply or increase prices.
          The
    success of our business may be dependent on our ability to
    maintain our third-party foundry relationships.
   15




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
    the potential inability of our manufacturing partners to develop
    manufacturing methods appropriate for our products;
    inability of our partners to construct and equip manufacturing
    facilities or to ramp up production in a timely manner;
    unwillingness or inability of partners to devote adequate
    capacity to the manufacture of our products;
    potential product quality issues, where we do not have
    sufficient control to resolve them quickly or at all;
    our partners inability to acquire manufacturing machinery
    and equipment required to manufacture our products due to
    controls on the export or import of technology into the country
    where the partner is located or limited supply of the necessary
    equipment; and
    reduced control over delivery schedules and product costs.      If our
    strategic alliance partners or joint ventures fail to meet their
    business or technological goals we may lose the value of our
    investments in them, and we may fail to keep pace with the rapid
    developments in our industry.
      
    our alliance partners could encounter financial difficulties;
    our interests could diverge from those of our alliance partners
    in the future;
    we may not be able to agree with a joint venture or alliance
    partner on the amount or timing of further investments in our
    joint projects;
    the management of one of our joint ventures may not be able to
    control costs;
    a joint venture may experience ramp up or manufacturing problems;
    a joint venture may experience delays or difficulties in
    reaching its research and development targets; 16




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
    political instability may occur in the countries where our joint
    ventures
    and/or
    alliance partners are located; and
    economic instability, including currency devaluations or
    exchange rate fluctuations, may occur in the countries where our
    joint ventures
    and/or
    alliance partners are located.    We may
    be unable to fund our research and development efforts and
    capital expenditures if we do not have adequate access to
    capital.
      MD&A 
    Liqidity and Capital Requirements
   17




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If our
    manufacturing processes are delayed or disrupted, our business,
    financial condition and results of operations could be
    materially adversely affected.
        Our
    business can be hurt by changes in exchange rates.
         18




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Our
    business could suffer as a result of negative economic
    developments, political instability, unfavorable legal
    environments or negative currency developments in the different
    parts of the world in which we operate, especially in the United
    States, Taiwan and the developing markets of China and
    Malaysia.
    
    negative economic developments in foreign economies, in
    particular the United States, China, Malaysia and Taiwan, where
    we have or share substantial manufacturing facilities;
    political instability, including the threat of war, terrorist
    attacks, epidemic or civil unrest, in particular in Taiwan,
    which experiences recurring tensions with China;
    uncertainties as to the effectiveness of intellectual property
    protection, especially in China;
    devaluations of local currencies, especially in Asia;
    changes in laws and policies affecting trade and investment,
    including exchange controls and expropriation, particularly in
    China; and
    varying laws and varying practices of the regulatory, tax,
    judicial and administrative bodies in the jurisdictions where we
    operate, especially in developing Asian countries.    Reductions
    in the amount of government subsidies we receive or demands for
    repayment could increase our reported expenses.
       19




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An
    inability to attract and retain skilled technical personnel
    could adversely impact our business.
    Environmental
    laws and regulations may expose us to liability and increase our
    costs.
         20




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Products
    that do not meet customer specifications or that contain, or are
    perceived to contain, defects or errors or that are otherwise
    incompatible with their intended end use could impose
    significant costs on us.
    We may
    be unable to make desirable acquisitions or to integrate
    successfully any businesses we acquire.
      We are
    subject to the risk of loss due to explosion and fire because
    some of the materials we use in our manufacturing processes are
    highly combustible.
   21




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Risks
    related to our carve-out as a stand-alone company and our
    continuing relationship with Infineon
  We
    have limited experience operating as an independent
    company.
      Our
    ability to operate our business effectively may suffer if we do
    not, quickly and cost-effectively, establish our own financial,
    administrative and other support functions in order to operate
    as a stand-alone company, and we cannot assure you that the
    transitional services Infineon has agreed to provide us will be
    sufficient for our needs.
    Our
    pre-carve-out financial information may not be representative of
    our results as an independent company.
     22




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We may
    lose rights to intellectual property arrangements if
    Infineons ownership in our company drops below certain
    levels.
      We may
    not be successful in establishing a brand
    identity.
  ® ®
  We may
    face additional costs under our agreements with Infineon
    relating to Infineons 200mm fab in Dresden.
     23




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We may
    experience increased costs resulting from a decrease in the
    purchasing power we have historically had as a segment of
    Infineon.
    Our
    agreements with Infineon relating to our carve-out may be less
    favorable to us than similar agreements negotiated between
    unaffiliated third parties.
    Infineon
    will initially control the outcome of shareholder actions in our
    company, and may thereby limit our ability to obtain additional
    financing or make acquisitions.
       24




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We may
    have conflicts of interest with Infineon and, because of
    Infineons controlling ownership interest in our company,
    may not be able to resolve such conflicts on favorable terms for
    us.
    
    Indemnification arrangements in connection with our carve-out
    from Infineon.  We have agreed to indemnify
    Infineon with respect to lawsuits and other matters as part of
    our carve-out from Infineon. These indemnification arrangements
    could result in us having interests that are adverse to those of
    Infineon, for example different interests with respect to
    settlement arrangements in a litigation matter. In addition,
    under these arrangements, we agreed to reimburse Infineon for
    liabilities incurred (including legal defense costs) in
    connection with certain litigation, while Infineon will be the
    party prosecuting or defending the litigation.
    Employee recruiting and retention.  Because we
    operate in many of the same geographical areas, we expect to
    compete with Infineon in the hiring and retention of employees,
    in particular with respect to highly-skilled technical
    employees. We have no agreement with Infineon that would
    restrict either Infineon or us from hiring any of the
    others employees.
    Members of our Supervisory Board and Management Board may
    have conflicts of interest.  Certain members of
    our Supervisory Board and Management Board own shares in
    Infineon or options to purchase Infineon shares. In addition,
    Peter Fischl, a member of our Supervisory Board, is the Chief
    Financial Officer of Infineon and a member of its Management
    Board. These relationships could create, or appear to create,
    conflicts of interest when these persons are faced with
    decisions with potentially different implications for Infineon
    and us, even though these persons owe a duty of loyalty to take
    into account only our interests.
    Sale of shares in our company.  Infineon may
    decide to sell all or a portion of the shares that it holds in
    us to a third party, including to one of our competitors,
    thereby giving that third party substantial influence over our
    business and our affairs. Such a sale could be contrary to the
    interests of certain of our stakeholders, including our
    employees or our public shareholders.
    Allocation of business opportunities.  Business
    opportunities may arise that both we and Infineon find
    attractive, and which would complement our respective
    businesses. Infineon may decide to take the opportunities
    itself, which would prevent us from taking advantage of the
    opportunity ourselves.    Third
    parties may seek to hold us responsible for liabilities of
    Infineon that we did not assume in the contribution
    agreement.
     25




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We may
    experience difficulty in separating our assets and resources
    from Infineon.
    Risks
    related to the securities markets and ownership of our shares or
    ADSs
  Sales
    of substantial numbers of shares or ADSs in the public market
    could adversely affect the market price of our
    securities.
    The
    price of our ADSs may be subject to wide
    fluctuations.
    
    the volatility of DRAM prices and therefore of our revenues;
    changes in market valuations of technology companies in general
    and memory product companies in particular;
    variations in our operating results;
    changes in demand for, and supply of, our products;
    technological changes that hurt our competitive position;
    unfavorable developments in litigation or governmental
    investigations in which we are involved;
    strategic moves by us or our competitors, such as acquisitions
    or restructurings;
    failure of our quarterly operating results to meet market
    expectations;
    changes in expectations as to our future financial performance,
    including financial estimates by securities analysts;
    review of the long-term values of our assets, which could lead
    to impairment charges that could reduce our earnings;
    dispositions or anticipated dispositions by Infineon of shares
    in our company; and
    general market conditions.   26




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Exchange
    rate fluctuations may reduce the amount of U.S. dollars you
    receive in respect of dividends or other distributions in
    respect of your ADSs.
    You
    may not be able to participate in rights offerings and may
    experience dilution of your holdings as a result.
      You
    may not be able to exercise your right to vote the ordinary
    shares underlying your ADSs.
         27




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You
    may not receive distributions on our ordinary shares represented
    by our ADSs or any value for them if it is illegal or
    impractical to make them available to holders of
    ADSs.
    You
    may be subject to limitations on transfer of your
    ADSs.
    The
    rights of shareholders in German companies differ in material
    respects from the rights of shareholders of corporations
    incorporated in the United States.
    It may
    be difficult for you to bring any action or enforce any judgment
    obtained in the United States against our company or members of
    our Supervisory Board or Management Board, which may limit the
    remedies otherwise available to our shareholders.
    We
    have no present intention to pay dividends on our ordinary
    shares in the foreseeable future and, consequently, your only
    opportunity to achieve a return on your investment during that
    time is if the price of our ADSs appreciates.
  Bilanzverlust
 28




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The
    effect of Infineons loan of our ADSs to J.P. Morgan,
    any exercise of the exchange rights under the exchangeable notes
    Infineon Technologies Investment B.V. has offered or any sales
    of our ADSs in short sale transactions by the investors in the
    exchangeable notes may have a negative effect on the market
    price of our ADSs. In addition, purchases of ADSs in connection
    with the termination of Infineons loan of shares in our
    company to J.P. Morgan may result in a temporary increase
    in the market price of our ADSs during the loan unwind
    period.
   29




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SELECTED
    COMBINED AND CONSOLIDATED FINANCIAL DATA
        30




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As of and for the financial year ended September 30,2003


2004


2005


2006


2007


2007(1)(Unaudited)














(Unaudited)(in millions, except share and per share data)Selected Combined and Consolidated Statement of Operations
    data:Net sales


2,544



3,008



2,825



3,815



3,608


$
5,130Cost of goods sold


2,090



2,063



2,164



3,048



3,390



4,820Gross (loss) profit


454



945



661



767



218



310Research and development expenses


298



347



390



433



401



570Selling, general and administrative expenses


209



232



206



215



199



283Restructuring charges


3



2



1











Other operating expenses (income), net


16



194



13



60



(18
)


(26
)Operating (loss) income


(72
)


170



51



59



(364
)


(517
)Interest (expense) income, net


(35
)


(30
)


(7
)


(25
)


7



10Equity in earnings (losses) of Associated companies


22



(16
)


45



80



117



166Gain (loss) on associated company share issuance


(2
)


2







72







Other non-operating income (expense), net


56



(11
)


13



8



7



10Minority interests


11



17



2



(6
)


(6
)


(9
)Income (loss) before income taxes


(20
)


132



104



188



(239
)


(340
)Income tax (expense) benefit


(55
)


(211
)


(86
)


(114
)


(10
)


(14
)Net (loss) income


(75
)


(79
)


18



74



(249
)

$
(354
)Net (loss) income per share and ADS
    (unaudited)(2):Basic and diluted


(0.25
)


(0.26
)


0.06



0.24



(0.73
)

$
(1.03
)Number of shares used in earnings per share
    computation(2):Basic (in thousands)


300,000



300,000



300,000



305,984



342,000



342,000Diluted (in thousands)


300,000



300,000



300,000



305,984



342,000



342,000Summary Combined and Consolidated Balance Sheet data:Cash and cash equivalents


544



577



632



932



746


$
1,061Marketable securities


23



2







138



265



377Working capital,
    net(3)


787



78



437



1,328



1,013



1,440Total assets


4,634



4,750



4,861



5,861



5,381



7,651Short-term debt, including current portion of long-term debt


51



551



524



344



77



109Long-term debt, excluding current portion


516



27



108



151



227



323Business/shareholders equity


2,736



2,779



2,967



3,871



3,517



5,001Summary Combined and Consolidated Cash Flow data:Net cash provided by operating Activities


300



693



484



326



980


$
1,395Net cash used in investing Activities


(242
)


(1,048
)


972



(801
)


(847
)


(1,205
)Depreciation and amortization


815



752



528



703



666



946     (1)
    
    Translated into U.S. dollars solely
    for convenience of the reader at the rate of 1.00 =
    $1.4219, the noon buying rate of the Federal Reserve Bank of New
    York for euro on September 28, 2007, the last currency
    trading day in September 2007.(2)
    
    Before the carve-out, the Memory
    Products business was wholly owned by Infineon, and there were
    no earnings (loss) per share for our company. Following the
    carve-out, earnings (loss) per share reflects the contributed
    capital structure and the additions due to the IPO for all
    periods presented. For presentation purposes, we used the number
    of shares outstanding at the carve-out date for the presentation
    of earnings (loss) per share for periods prior to our carve-out.(3)
    
    Calculated by subtracting current
    liabilities from current assets. 31




---



##### Table of Contents



OPERATING
    AND FINANCIAL REVIEW
  This discussion and analysis of our financial condition and
    results of operations is based on, and should be read in
    conjunction with, our audited combined and consolidated
    financial statements as of and for the years ended
    September 30, 2005, 2006, 2007 and the other financial
    information included elsewhere in this annual report. We have
    prepared our combined and consolidated financial statements in
    accordance with accounting principles generally accepted in the
    United States of America (U.S. GAAP).
    Executive
    Summary
         32




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##### Table of Contents



Overview
  Business
    Overview
        Our
    Carve-Out from Infineon
   33




---



##### Table of Contents



Basis
    of Presentation of Our Combined Financial
    Statements
    Methodology.
   34




---



##### Table of Contents



Statements of Operations.
  Balance Sheets.
    Investments by and Advances from Infineon and our Capital
    Structure.
  Capital Structure.
 35




---



##### Table of Contents



Factors
    that Affect our Results of Operations
  Relationship
    between DRAM prices and reduced unit costs
  per-unit
  Relationship
    between the Capital Intensive Nature of our Business and the
    Industrys Cyclicality
        Exchange
    Rate Fluctuations
   36




---



##### Table of Contents



Transaction
    risk
    
    our margins (in euros) decline or become negative to the extent
    our costs were incurred in euros and the sales were generated in
    currencies weaker than the euro, and
    Additionally our competitiveness may decline as compared with
    competitors based in countries with weaker currencies while our
    products manufactured in Europe will have been produced at
    constant costs (in euro), their (constant) costs denominated in
    weaker currencies will appear to have declined.    
    our margins (in euros) increase to the extent our costs were
    incurred in euros and the sales were generated in currencies
    stronger than the euro, and
    our competitiveness may increase as compared with competitors
    based in countries with stronger currencies because our products
    manufactured in Europe will have been produced at constant costs
    (in euro) while their (constant) costs denominated in stronger
    currencies will appear to have increased.      Translation
    risk
   37




---



##### Table of Contents



Strategic
    Cooperations
      
    Nanya.  Our strategic cooperation with Nanya
    Technology Corporation, a Taiwanese corporation, encompasses the
    joint development of DRAM products and DRAM process technology
    as well as a joint venture called Inotera Memories, Inc. that
    owns and operates a 300mm manufacturing facility in Taiwan.
    Inotera uses production technology developed under our joint
    development agreements with Nanya. We initially developed
    advanced 90nm and 75nm process technologies together with Nanya
    and shared the related development costs. In September 2005, we
    agreed to continue developing advanced 58nm technologies
    together. Under the terms of the joint venture, Nanya and we
    each purchase 50% of Inoteras output. Inotera completed an
    initial public offering of its common stock in Taiwan in March
    2006. In May 2006, Inotera listed Global Depositary Receipts, or
    GDRs, on the Luxembourg Stock Exchange. After these transactions
    we owned 35.6% of Inoteras shares. We account for Inotera
    using the equity method. Because of Inoteras significance
    for us within the meaning of
    Rule 3-09
    of the SECs
    Regulation S-X,
    we have incorporated by reference in this annual report,
    Inoteras audited consolidated financial statements as of
    and for the years ended December 31, 2005 and 2006.
    CSVC.  In July 2003, Infineon established a
    venture with China Singapore Suzhou Industrial Park Ventures
    Co., Ltd. (CSVC) in Suzhou, China. CSVC is a limited liability
    company organized under the laws of the Peoples Republic
    of China. The venture, renamed Qimonda Technologies (Suzhou)
    Co., Ltd. after our carve-out and herein referred to as Qimonda
    Suzhou, constructed a back-end facility for the assembly and
    testing of our products, which officially opened in September
    2004. We are required to purchase the entire output of the
    facility. We currently hold 63% of Qimonda Suzhous share
    capital, representing 72.5% of the voting rights. We expect to
    invest a further $86.5 million in Qimonda Suzhou by the end
    of July 2008 pursuant to our current contractual obligations,
    and will hold approximately 72.5% of its share capital and
    voting rights by that date, with CSVC owning the remaining
    27.5%. We consolidate Qimonda Suzhou into our combined and
    consolidated financial statements, because we have exercised
    voting control over this venture from the outset. Dividends from
    this venture belonging to CSVC are shown as minority interests
    in our combined and consolidated financial statements. We have
    the option to acquire CSVCs stake at the nominal
    investment value plus accrued and undistributed returns on that
    investment.    
    SMIC.  In December 2002 Infineon entered into
    an agreement with Semiconductor Manufacturing International
    Corporation (SMIC), a Cayman Islands corporation with head
    offices in Shanghai, China. This 38




---



##### Table of Contents



agreement was assigned to us as part of the carve-out. As most
    recently amended in October 2007, the agreement provides us
    access to additional DRAM manufacturing capacity.  
    Winbond.  In May 2002 and August 2004, Infineon
    entered into product purchase and capacity reservation
    agreements with Winbond Electronics Corporation, a Taiwanese
    corporation, which give us access to additional DRAM production
    capacity. These agreements were assigned to us as part of the
    carve-out. In 2006 and 2007, we entered into additional
    agreements with Winbond, enabling 80mm, 75nm and 58nm DRAM
    manufacturing for us.    Critical
    Accounting Policies
    
    those made in connection with our initial preparation of the
    combined financial statements;
    recoverability of long-lived assets;
    valuation of inventory;
    pension plan accounting;
    realization of deferred tax assets;
    revenue recognition; and
    contingencies.  Assumptions
    and Estimates We Made in Preparing Our Combined Financial
    Statements
   39




---



##### Table of Contents



For the


For thefinancial year


seven monthsended


endedSeptember 30,


April 30,2005


2006(in millions)Cost of goods sold


168



111Research and development expenses


27



17Selling, general and administrative expenses


109



75Restructuring charges


1




305



203     Recoverability
    of Long-Lived Assets
      Goodwill and Other
    Intangible Assets
   40




---



##### Table of Contents



Valuation
    of Inventory
    work-in-process.
    
    temporary or fundamental price declines as a consequence of an
    imbalance of demand and supply, which can occur due to weak
    demand
    and/or
    greatly increased supply;
    technological obsolescence due to rapid developments of new
    products and technological improvements; and
    changes in economic circumstances or in other conditions that
    impact the market price for our products.    Pension
    Plan Accounting
  Employers Accounting for
    Pensions Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106, and 132(R)
 41




---



##### Table of Contents



Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans
 42




---



##### Table of Contents



Pension
    Benefits  Sensitivity Analysis
    Effect on net periodicpension costsOne percent


One percentincrease


decrease(in millions)Discount rate


(0.8
)


1.0Rate of compensation increase


0.5



(0.5
)Rate of projected future pension increases


0.2



(0.1
)Expected return on plan assets


(0.3
)


0.3       Realization
    of Deferred Tax Assets
     43




---



##### Table of Contents



Accounting
    For Income Taxes
  Revenue
    Recognition
      Revenue Recognition No. 00-21, Revenue Arrangements with Multiple
    Deliverables
  Contingencies
     44




---



##### Table of Contents



Results
    of Operations
    For the financial year ended September 30,2005


2006


2007(in percent)Net sales


100.0
%


100.0
%


100.0
%Cost of goods sold


76.6



79.9



94.0Gross profit


23.4



20.1



6.0Research and development expenses


13.8



11.3



11.1Selling, general and administrative expenses


7.3



5.6



5.5Restructuring charges



*






Other operating (expenses) income, net


0.5



1.6



0.5Operating income


1.8



1.6



(11.1
)Interest (expense) income, net


(0.2
)


(0.7
)


0.2Equity in earnings of associated companies


1.6



2.1



3.2Gain on associated company share issuance






1.9



Other non-operating (expense) income, net


0.4



0.2



0.2Minority interests


0.1



(0.2
)


(0.2
)Income before income taxes


3.7



4.9



(6.6
)Income tax (expense) benefit


(3.1
)


(3.0
)


(0.3
)Net (loss) income


0.6



1.9



(6.9
)     *
    
    less than 1%  Net
    Sales
   45




---



##### Table of Contents



For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Net salesMemory products


2,665



3,808



3,600% of net sales


94
%


100
%


100
%License revenue


160



7



8% of net sales


6
%


0
%


0
%Total net sales


2,825



3,815



3,608Effect of foreign exchange over prior period


(132
)


117



(298
)% of net sales


5
%


3
%


8
%     
    DRAM price declines of 29%; and
    an 8% decrease in the average exchange rate of dollars for euro.      
    higher bit shipments, which increased 79%; and
    a 3% increase in the average exchange rate of dollars for euro.    
    DRAM price declines of 20%; and
    the positive effect in our 2005 financial year of license income
    from ProMOS of 118 million.  Price declines and increases. build-up
   46




---



##### Table of Contents



47




---



##### Table of Contents



(Source: WSTS)
  Increase in bit shipments.
  
    our progress in increasing the yield of our manufacturing
    technologies,
    the conversion of an increasing share of our capacities to our
    80nm and 75nm technologies,
    the increase of production volumes at our Richmond 300mm
    facility.
    our access to additional capacities of our joint venture
    partners and our foundries, and
    growth in demand, particularly for PCs, increased bits per
    box and our continued diversification in new market areas,
    especially with our consumer DRAM products.      
    our progress in increasing the yield of our 110nm technology,
    the conversion of an increasing share of our capacities to our
    90nm technology,
    our access to additional capacities of our joint venture
    partners and our foundries,
    the overall demand growth in the DRAM market and our successful
    diversification in new market segments, particularly with our
    graphic DRAM products, and
    the ramp-up
    of production volumes at our Richmond 300mm facility.  Exchange rate effects.
 48




---



##### Table of Contents



Decline in license revenue.
  Net
    Sales by Region
    Net sales
    by region
  For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Germany


232



8
%


316



8
%


256



7
%Rest of Europe*


333



12
%


482



12
%


399



11
%North America


1,067



38
%


1,591



42
%


1,323



37
%Asia/Pacific


1,091



38
%


1,174



31
%


1,182



33
%Japan


102



4
%


252



7
%


448



12
%Total


2,825



100
%


3,815



100
%


3,608



100
%     *
    
    The Rest of Europe region also includes other countries and
    territories in the rest of the world outside of the listed main
    geographic regions with aggregate sales representing no more
    than 2% of total sales in any period.      Cost
    of Goods Sold and Gross Margin
    
    direct materials, principally raw wafers;
    employee costs;
    overhead, including maintenance of production equipment,
    indirect materials (such as photomasks) and royalties; 49




---



##### Table of Contents




    depreciation and amortization;
    subcontracted assembly and testing services;
    production support, including facilities, utilities, quality
    control, automated systems and management functions; and
    foundry production (including purchases from our joint ventures
    and other associated and related companies, such as Inotera).    
    foreign currency conversion gains (or losses) on transactions in
    non-euro currencies and translations into euro;
    amortization of purchased intangible assets;
    product warranty costs;
    provisions for excess or obsolete inventories and write-downs to
    market value; and
    government grants, which we recognize over the remaining useful
    life of the related manufacturing assets.    For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Cost of goods sold


(2,164
)


(3,048
)


(3,390
)% of net sales


77
%


80
%


94
%Gross margin


23
%


20
%


6
%     
    higher bit shipments; and
    inventory revaluation and reserves.    
    improvements in our productivity; and
    exchange rate effects.    
    higher bit shipments;
    higher absolute costs from production
    ramp-up and
    increased purchases from foundries; and
    exchange rate effects.    Higher bit shipments.
 50




---



##### Table of Contents



Inventory revaluation and reserves.
  Productivity improvements.
  ramp-up
  Exchange rate effects.
    Purchases from foundries.
    Research
    and Development (R&D) Expenses
   51




---



##### Table of Contents



For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Research and development expenses


(390
)


(433
)


(401
)% of net sales


14
%


11
%


11
%Government subsidies


16



17



24% of net sales


1
%



*


1
%     *
    
    less than 1%      Selling,
    General and Administrative (SG&A) Expenses
        For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Selling, general and administrative expenses


(206
)


(215
)


(199
)% of net sales


7
%


6
%


6
%    52




---



##### Table of Contents



Restructuring
    Charges
      Other
    Operating (Expenses) Income, Net
      For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Other operating (expenses) income, net


(13
)


(60
)


18% of net sales


0
%


2
%


0
%     Equity
    in Earnings of Associated Companies
   53




---



##### Table of Contents



For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Equity in earnings of associated companies


45



80



117% of net sales


2
%


2
%


3
%     Gain
    on Associated Company Share Issuance
    For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Gain on associated company share issuance


0



72



0% of net sales


0
%


2
%


0
%     Other
    Non-Operating Income, Net
      For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Other non-operating income, net


13



8



7% of net sales


0
%


0
%


0
%    54




---



##### Table of Contents



Earnings
    Before Interest and Taxes (EBIT)
      For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Net income (loss)


18



74



(249
)Add: interest expense (income)


7



25



(7
)Add: income tax expense (benefit)


86



114



10EBIT


111



213



(246
)   Interest
    Income (Expense), Net
      For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Interest income (expense), net


(7
)


(25
)


7% of net sales


0
%


(1
)%


0
%Capitalized interest


7



0



0    55




---



##### Table of Contents



Income
    Taxes
    For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Income tax expense


86



114



10Percent of net sales


3
%


3
%


0
%Effective tax rate


83
%


61
%


(4
)%     Net
    Income (Loss)
    Financial
    Condition
    As of September 30,2006


2007


Change(1)(in millions, except percentages)Current assets


2,807



2,257



(20
)%Non-current assets


3,054



3,124



2
%Total assets


5,861



5,381



(8
)%Current liabilities


1,479



1,244



(16
)%Non-current liabilities


511



620



21
%Total liabilities


1,990



1,864



(6
)%Shareholders equity


3,871



3,517



(9
)%     (1)
    
    Percentage changes from September 30, 2006 to
    September 30, 2007.   56




---



##### Table of Contents



Liquidity
  Cash
    Flows
      For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Net cash provided by operating activities


484



326



980Net cash used in investing activities


(972
)


(801
)


(847
)Net cash provided by (used in) financing activities


538



773



(307
)Effect of foreign exchange rate changes on cash and cash
    equivalents


5



2



(12
)Cash and cash equivalents at end of period


632



932



746   Financial
    Year Ended September 30, 2007 Compared to Financial Year
    Ended September 30, 2006
     57




---



##### Table of Contents



Financial
    Year Ended September 30, 2006 Compared to Financial Year
    Ended September 30, 2005
        Free Cash
    Flow
    For the financial year ended September 30,2005


2006


2007(in millions, except percentages)Net cash provided by operating activities


484



326



980Net cash used in investing activities


(972
)


(801
)


(847
)Purchases of marketable securities, net


(1
)


138



133Free Cash Flow


(489
)


(337
)


266      58




---



##### Table of Contents



Net Cash
    Position
    Payments due by periodLess than














AfterAs of September 30, 2007

Total


1 year


1-2 years


2-3 years


3-4 years


4-5 years


5 years(in millions)Cash and cash equivalents


746



746



















Marketable securities


265



265



















Gross cash position


1,011



1,011



















Less:Long-term debt


276



49



51



54



57



21



44Short-term debt


28



28



















Total financial debt


304



77



51



54



57



21



44Net cash position


707



934



(51
)


(54
)


(57
)


(21
)


(44
)         Return
    on Capital Employed (RoCE)
      As of September 30,2005


2006


2007Shareholders equity


2,967



3,871



3,517Less: net cash position


0



(575
)


(707
)Capital employed


2,967



3,296



2,810  59




---



##### Table of Contents



For the financial year ended September 30,2005


2006


2007Net income


18



74



(249
)Adjust: interest income (expense), net


7



25



(7
)Earnings (loss) before interest


25



99



(256
)Return on Capital Employed


1
%


3
%


(9
)%Net income (loss) in percent of shareholders equity


1
%


2
%


(7
)%   Capital
    Requirements
    
    finance our operations;
    make scheduled debt payments;
    settle contingencies if and when they occur; and
    make planned capital expenditures.    
    cash flow generated from operations;
    cash on hand and securities we can sell;
    available credit facilities and
    capital market and other financing transactions in which we may
    engage in the future.     60




---



##### Table of Contents



Commitments
    and Contingencies
    Payments due/expirations by
    period(1)Less than














AfterAs of September 30,
    2007(2)(3)

Total


1 year


1-2 years


2-3 years


3-4 years


4-5 years


5 years(in millions)Other contractual liabilities reflected on the balance sheet:Settlement for antitrust related
    matters(4)


63



22



21



20











Contractual commitments:Operating lease payments


95



27



25



17



9



8



9Unconditional purchasecommitments(5)


787



737



43



5



2







Other long-term commitments


70



64



2



2



1



1



Total contractual commitments


952



828



70



24



12



9



9Other contingencies:Guarantees(6)


128



19



16



1



9



30



53Contingent government
    grants(7)


406



107



22



45



166



26



40Total contingencies


534



126



38



46



175



56



93     (1)
    
    The above table should be read together with note 31 to our
    combined and consolidated financial statements.(2)
    
    Certain payments of obligations or expiration of commitments
    that are based on the achievement of milestones or other events
    that are not date-certain are included in this table, based on
    our estimate of the reasonably likely timing of payments or
    expirations in each particular case. Actual outcomes could
    differ from those estimates.(3)
    
    Product purchase commitments associated with capacity
    reservation agreements are not included in this table, since the
    purchase prices are based in part on future market prices, and
    are accordingly not quantifiable as of September 30, 2007.
    Purchases under these agreements aggregated approximately
    1.131 million for the 2007 financial year and
    1,185 million for the 2006 financial year.(4)
    
    These amounts are recorded as accrued, other current or other
    non-current liabilities on our balance sheet and reflect
    payments to be made under settlement agreements relating to
    antitrust matters.(5)
    
    Primarily purchase orders that have been placed with suppliers
    of fixed assets, raw materials and services. Fixed price orders
    for products from our foundry partners are also shown here.(6)
    
    Guarantees are mainly issued by the parent company for the
    payment of import duties, rentals of buildings, contingent
    obligations related to government grants received.(7)
    
    Contingent government grants refers to amounts
    previously received that are related to the construction and
    financing of certain production facilities, but that are not
    guaranteed otherwise. These could be repayable if the total
    project requirements are not met. 61




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##### Table of Contents



Capital
    Expenditures
  For the financial year ended September 30,2005


2006


2007(in millions)Purchases of property, plant and equipment


926



686



879         Credit
    Facilities
        lock-up
     62




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##### Table of Contents



Pension
    Plan Funding
    As of September 30,2006


2007


Change(in millions)Projected benefit obligations


(56
)


(54
)


2Fair value of plan assets


27



29



2Funded status


(29
)


(25
)


4          63




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##### Table of Contents



Research
    and Development
    Quantitative
    and Qualitative Disclosure About Market Risk
        Commodity
    Price Risk
        Foreign
    Exchange Rate Risk
     64




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##### Table of Contents



As of September 30,


As of September 30,2006


2007Notional


Fair


Notional


Fairamount


value


amount


value(in millions)Forward contracts sold:U.S. dollar


168



(1
)


475



11Japanese yen


26







2



*Forward contracts purchased:U.S. dollar


17







72



(1
)Japanese yen


22







70



(2
)Singapore dollar


3







5



Malaysian ringgit


5







17



Other currencies










1



Other


94



5



108



11Fair value, net






4







19     *)
    
    less then 1 million    Accounting for Derivative
    Instruments and Hedging Activities
      Interest
    Rate Risk
   65




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Off-Balance
    Sheet Arrangements
    Recent
    Accounting Pronouncements
  Adopted
    in the year ended September 30, 2007
  Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106, and 132(R),
  Considering the Effects of Prior Year Misstatements
    when Quantifying Misstatements in Current Year Financial
    Statements
  Issued
    but principally applicable in future financial
    years
  Accounting for Uncertainty in Income Taxes 
    an interpretation of FASB Statement No. 109
  Fair Value Measurements
 66




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The Fair Value Option for Financial Assets and
    Financial Liabilities  including an amendment of FASB
    Statement No. 115 instrument-by-instrument
  Recent
    Events
         67




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Outlook
        cost-per-bit ramp-up 300-mm
             68




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##### Table of Contents



THE
    SEMICONDUCTOR MEMORY INDUSTRY
        
    Dynamic Random Access Memory, or DRAM, products, which are the
    most common volatile memories. A volatile memory IC
    retains information only while electrical power is switched on,
    while a non-volatile memory IC retains its data
    content after the power supply is switched off. DRAM products
    offer large densities at low cost with relatively fast access
    times and virtually unlimited endurance for the life of the
    product. They are dynamic because they must be
    electronically refreshed frequently in order to retain the
    stored data;
    Flash memory products, which are non-volatile
    memories offering large densities at low cost with slower access
    times and limited endurance; and
    Static Random Access Memory, or SRAM, products, which are
    volatile memories offering low densities at relatively higher
    cost with very fast access times and virtually unlimited
    endurance for the life of the product.      Semiconductor
    Memory Product Features
  cost-per-megabit.
    Memory
    density
   69




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##### Table of Contents



Year ended December 312000


2001


2002


2003


2004


2005


20064Mb


0.3%



0.1%



0.1%















16Mb


5.9%



2.4%



1.5%



0.8%



0.7%



0.4%



0.3%64Mb


51.4%



16.8%



7.0%



3.8%



2.5%



1.3%



0.9%128Mb


37.3%



61.8%



35.7%



14.2%



7.7%



4.2%



2.5%256Mb


5.0%



18.8%



55.5%



78.9%



74.0%



48.0%



17.9%512Mb










0.2%



2.2%



14.3%



43.2%



74.9%1Gb














0.1%



0.9%



2.8%



3.5%2Gb


























0.1%   Data
    transfer rates and interfaces
      Year ended December 31,2000


2001


2002


2003


2004


2005


2006FPM/EDO DRAM


9.9%



3.2%



0.9%



0.4%



0.2%



0.1%



0.0%SDR SDRAM


87.0%



81.0%



55.5%



22.4%



17.6%



12.3%



9.7%DDR SDRAM






8.6%



37.9%



72.5%



72.6%



58.2%



31.4%DDR2 SDRAM










0.0%



1.3%



6.6%



26.3%



55.1%DDR3 SDRAM


























0.1%RDRAM


2.7%



6.4%



4.2%



1.9%



0.9%



0.4%



0.1%Other


0.3%



0.8%



1.5%



1.6%



2.1%



2.7%



3.5%  70




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##### Table of Contents



Voltage
    and power consumption
    DRAM
    Technologies
  DRAM
    architecture
    Feature
    size
  one-billionth
 71




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##### Table of Contents



The
    Semiconductor Manufacturing Process
    The
    front-end process
    ramp-up
      The
    back-end process
   72




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##### Table of Contents



DRAM
    Applications
    Standard
    DRAMs for PC and Workstation Applications
        DRAMs
    for Infrastructure Applications
  per-unit
   73




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##### Table of Contents



DRAMs
    for Other Applications including Graphics, Mobile and Consumer
    Applications
        Drivers
    of DRAM Demand and Recent Trends
      
    Emergence of mobile phones as a significant consumer of
    DRAM.  While mobile phones consumed nearly no
    DRAM six years ago, in calendar year 2006, this application
    represented 3% of DRAM consumption and is expected to reach 6%
    in calendar year 2011, according to Gartner. The 11% CAGR of
    units shipped between calendar years 2006 and 2011, combined
    with 55% CAGR in megabytes per unit, is expected to lead to 71%
    CAGR of total DRAM consumption by mobile phones. Rapid growth in
    DRAM content in phones is driven by emergence of multimedia
    phones and adoption of sophisticated digital audio and video
    functions into handsets. 74




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##### Table of Contents




    New or increased DRAM consumption by graphics applications
    and digital consumer devices.  Evolution of
    consumer electronics has created several device categories that
    offer sophisticated functionality and require substantial amount
    of DRAM to operate. These devices, including digital TVs and
    digital audio players, are often characterized by strong unit
    growth and represent a significant incremental opportunity for
    DRAM suppliers. In addition, technological advances in
    established consumer devices have led newer models to require
    more advanced DRAM and consume more DRAM per unit. Such devices
    include game consoles, where the latest products include 512 or
    256 MB of highly specialized GDDR3 DRAM. All three major
    game console developers introduced new consoles using these
    technologies within the last twelve months. Newer DVD
    technologies, including advanced optical drives that demand more
    discrete DRAM chips per DVD player or recorder are also expected
    to contribute to this growth. These and other trends are
    expected to drive 36% CAGR of DRAM consumption in consumer
    devices between calendar years 2006 and 2011, according to
    Gartner.
    Continuing strong growth in DRAMs for
    infrastructure.  DRAM consumption in servers
    is expected to grow at a 49% CAGR between 2006 and 2011 and for
    Infrastructure at 53%, according to Gartner, driven by an
    estimated increase of DRAM content per unit at a CAGR of over
    39% and continued unit growth of entry-level servers. Evolution
    of processor architectures, combined with increasing complexity
    of systems, places significant demands on DRAM components used
    in these systems, including power efficiency, speed and density.
    However, demand for such DRAMs tends to be contract-based and
    therefore relatively steady, resulting in more stable and
    favorable pricing than the overall DRAM market.
    Multiple drivers of growth in DRAMs for PC and
    workstations.  PCs, workstations and memory
    modules and upgrades are expected to increase DRAM consumption
    at a 55% CAGR between 2006 and 2011, according to Gartner. One
    of the drivers of this growth involves increasing adoption of
    dual-core and 64-bit processors, which are expected to be
    incorporated in almost half of total PC shipments by the end of
    2007, according to IDC. In addition, Microsofts first
    mainstream 64-bit operating system, Windows Vista, which was
    launched in January 2007, is expected to stimulate DRAM demand
    by facilitating higher DRAM per unit and by triggering PC
    upgrades by consumers, followed by companies. Gartner expects
    mobile PCs to play an important role in DRAM demand as their
    strong unit growth is expected to continue at 21% CAGR in the
    period between calendar years 2006 and 2011, driven by improved
    power efficiency, wireless and multimedia functionality and
    other trends, including substitution of desktop PCs. Given the
    space and power constraints present in mobile devices, this is
    expected to lead to increase in demand for advanced DRAM
    components that address the above constraints. Significant DRAM
    market potential also exists in desktop PC penetration in
    emerging markets such as China and India.  Drivers
    of DRAM Supply and Recent Trends
      
    Capacity additions.  DRAM suppliers
    periodically build new manufacturing facilities or upgrade
    existing facilities to increase their overall capacity.
    Historically, periods of supply shortages led many market 75




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##### Table of Contents



participants to decide to add more capacity or accelerate
    existing capacity addition plans. Given the long time required
    to bring new capacity on-stream, these capacity additions may
    result in excess supply if a significant amount of capacity
    comes on-stream simultaneously, in particular when demand had
    subsided. Recently, several market participants have experienced
    strong revenue growth and have announced (or completed)
    increased investment in new manufacturing capacities. However,
    some of these capacities have been or will be used to produce
    non-DRAM products as well, as discussed below.  
    Wafer size, process technology and other manufacturing
    improvements.  Successive generations of
    semiconductor manufacturing technology enable higher output and
    productivity, resulting in growth of supply without investments
    in incremental capacity. For example, the transition from 200mm
    to 300mm wafer-based manufacturing yields higher output given
    the larger size of wafers being processed. The production
    capacity on 300mm wafers has increased almost eight fold since
    the beginning of calendar year 2004. According to iSuppli, the
    worldwide percentage of DRAM bits output on 300mm wafers was 19%
    in the first quarter of calendar year 2004. By the end of the
    fourth quarter of calendar year 2005, the percentage of bit
    output produced on 300mm wafers was 49%, according to iSuppli,
    which further reported that this percentage had increased to 66%
    in the fourth quarter of the 2006 calendar year. In addition,
    transition to smaller process technology, for example from 110nm
    to 90nm and then to 75nm nodes, reduces the die size and
    increases the density per unit of die surface. As a result, more
    chips are produced from the same wafer and higher bit shipments
    are achieved without adding incremental capacity. When these
    major transitions occur in DRAM manufacturing, lithography
    methods or materials used, initial manufacturing yields tend to
    be low, resulting in output below full potential. Over time, as
    DRAM suppliers solve the manufacturing problems and increase
    their yield, a higher proportion of usable components are
    produced per wafer and bit supply increases.    
    Consolidation among DRAM
    suppliers.  Market dynamics have driven
    significant consolidation in the DRAM industry, as a number of
    major manufacturers have withdrawn from the industry. NEC and
    Hitachi combined their DRAM operations into Elpida Corporation
    in December 1999, later consolidating some of Mitsubishis
    DRAM development activities. Texas Instruments sold its DRAM
    operations to Micron Corporation in calendar year 1998 and
    Toshiba sold its U.S. DRAM fab to Micron in calendar year
    2002. In January 2006, Micron combined its flash activities with
    Intel. Hyundai merged its DRAM operations with those of LG in
    calendar year 1999 (later renaming its DRAM operations as
    Hynix). According to Gartner, market share (measured by revenues
    in U.S. dollars) commanded by the four largest vendors has
    increased during the last decade from 46% in calendar year 1995
    to 72% in calendar year 2006.
    Increasing cost of technology development and
    manufacturing facilities.  The level of
    complexity increases with each successive generation of
    semiconductor manufacturing technology, as the leading edge
    processes are nearing limits caused by the physical properties
    of materials employed in the process. To solve such problems and
    to successfully introduce technologically advanced manufacturing
    capacity, DRAM suppliers need to consistently make significant
    investments in research and development and in expensive
    manufacturing equipment.
    Increasing use of foundries, joint ventures and licensing
    agreements. In recent years, the high costs of constructing fabs
    have led to the expansion of the use of semiconductor foundries,
    which are contract manufacturers that produce chips to the
    specifications of others. Historically, foundries have produced
    chips for what are known as fabless semiconductor
    companies, which are firms that design chips but that do
    not have their own manufacturing facilities. Increasingly,
    however, even large semiconductor companies that do have their
    own facilities are supplementing their capacity by making use of
    foundries. Using foundries involves less capital investment and
    may provide greater flexibility to increase or decrease output
    in a volatile market.   76




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##### Table of Contents




    Expansion of DRAM suppliers into flash memory
    products.  Driven by the historical and
    projected strong growth in the NAND flash market, and taking
    advantage of similarities between DRAM and NAND flash
    manufacturing, some DRAM suppliers have entered or expanded
    their presence in particular in the NAND flash market by adding
    new NAND flash manufacturing capacity or converting existing
    DRAM capacity to the manufacture of NAND flash memory. DRAM
    manufacturing capacity can generally be transferred to NAND
    flash and back without major cost or investment and in
    relatively short time. We believe that this gives suppliers
    flexibility to allocate capacity away from a product in periods
    of excess supply. As suppliers convert capacity from DRAM to
    NAND flash, the impact may be beneficial to DRAM producers
    because the resulting reduced rate of growth in the supply of
    DRAM could operate to moderate price declines for DRAM products
    that would likely have occurred had the new capacity been
    dedicated to DRAM production. After capacity conversions from
    DRAM to NAND flash memory products in the calendar year 2006,
    the industry has recently seen capacity conversions back to DRAM
    in reaction to the severe price erosion for NAND flash products.
    We believe that capacity conversions will continue to take place
    in both directions whenever substantial differences arise in
    margins between those product types.   77




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##### Table of Contents



OUR
    BUSINESS
  Overview
  quarter-to-quarter
    
    Technologically advanced DRAM products used in infrastructure,
    graphics, mobile and consumer applications. Our infrastructure
    DRAMs address the high reliability requirements of servers,
    networking and storage equipment. Our graphics, mobile and
    consumer DRAMs principally include specialty DRAMs
    that are designed for high performance or incorporate logic
    circuitry to enable low power consumption. Our graphics DRAMs
    deliver advanced performance to graphics cards and game
    consoles, and our mobile and consumer DRAMs provide low power
    consumption benefits to mobile phones, digital audio players,
    GPS devices, televisions, set-top boxes, DVD recorders and other
    consumer electronic devices. Sales of infrastructure, graphics,
    mobile and consumer DRAM products accounted for approximately
    38% of our net sales in our 2005 financial year, for
    approximately 50% of our net sales in our 2006 financial year
    and for approximately 60% of our net sales for our 2007
    financial year;
    Standard DRAM products used in personal computers, or PCs and
    workstations. Sales of these standard DRAM products accounted
    for approximately 51% of our net sales in our 2005 financial
    year, approximately 47% of our net sales in our 2006 financial
    year and approximately 39% of our net sales in our 2007
    financial year; and
    Other products, including embedded DRAM, technology licensing
    and NAND-compatible flash memory products. We ramped down flash
    memory products during the 2007 financial year. Sales of these
    products and revenues from technology licensing and royalties
    accounted for approximately 11% of our net sales in our 2005
    financial year, for approximately 3% of our net sales in our
    2006 financial year and for approximately 1% of our net sales in
    our 2007 financial year.     78




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##### Table of Contents



Our
    Strengths
    
    We are a leading supplier of DRAM
    products.  We have grown our operations
    significantly over the last decade and, as the suppliers in our
    industry have continued to consolidate, we have increased our
    market share from 3% to 16% (based on revenues) between calendar
    years 1995 and 2006, according to Gartner. Although our market
    share fluctuates from quarter-to-quarter and year-to-year, by
    the end of calendar year 2006, we were among the four largest
    DRAM suppliers, which together accounted for 72% of the global
    DRAM market that year. For the calendar year 2006, we were the
    worlds third largest supplier of DRAM with market share of
    approximately 16% both in revenues and bit shipments, according
    to Gartner. For the first nine months of calendar year
    2007, we remained the third largest supplier of DRAM by revenue
    and were the fourth largest supplier of DRAM by bit shipments,
    with market shares of approximately 13%, according to
    iSupplis preliminary report in November 2007. We believe
    that our size and scale will enable us to continue to improve
    our position as a prominent developer of leading semiconductor
    memory technologies, as a manufacturer with facilities among the
    most modern in our industry and as a supplier of an increasingly
    broad portfolio of competitive products to customers worldwide.
    We possess one of the broadest product portfolios in the
    DRAM industry.  We have in recent years
    significantly broadened our product portfolio of DRAM products
    for infrastructure, graphics, consumer and mobile applications,
    which we believe offer on average higher and less volatile
    prices than those for standard PC applications. In our 2007
    financial year, our product portfolio included over 100 distinct
    products in these application areas that each accounted for
    revenues in excess of 1 million, as compared with
    about 70 such products in our 2005 financial year. Within these
    application areas, we have focused on products that we design to
    meet the particular specifications customers identify for
    individual applications (which we refer to as design
    ins). We believe that this focus on individual
    applications and customers can help us mitigate the effects of
    price declines. In addition, our broadened product portfolio has
    enabled us to strengthen our customer base, both by adding new
    customers and expanding existing customer relationships to
    encompass more products.
    We demonstrate strong application and product design
    know-how.  We believe that strong application
    and product design know-how is necessary to achieve design wins
    in applications outside the PC area, and that this know-how is
    not widely available in the market. We have strengthened our
    product design know-how in recent years through experienced
    design teams, and have continued to view the further
    strengthening of our capabilities in these areas as a priority.
    We believe that our application and design know-how has been
    instrumental in being selected as a lead supplier in many of the
    more technologically advanced applications in the graphics,
    consumer and mobile areas in recent years. For example, the
    number of our customers who are among the leading suppliers in
    the area of consumer and mobile applications increased from 5 in
    the 2005 financial year to 19 in the 2007 financial year. 79




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##### Table of Contents




    We are a leading developer of semiconductor process
    technologies and an active innovator.  We have
    successfully developed and implemented several generations of
    process technologies. We believe that our accumulated
    experience, including that which we have acquired through our
    strategic alliances, is enabling us to introduce new memory
    technology platforms with smaller feature sizes on a schedule
    and at costs that enable us to remain among the leaders in
    standardized DRAMs while focusing on the more specialized
    products and designins described above. For example, we achieved
    the qualification of our 75nm node in approximately 30% less
    time than we did when shrinking from the 110nm to the 90nm node
    and have fully converted the production of standard DRAM
    products in our lead manufacturing facility in Dresden to the
    latest 80nm and 75nm technologies. We are also maintaining, as a
    focus of our continuing research and development efforts, the
    development of process technologies and architectures that
    possess physical characteristics that can be utilized to yield
    advantages for customer specific applications in terms of
    performance and power consumption. We believe these
    characteristics are important in DRAM products for use in
    applications such as infrastructure, graphics, mobile and
    consumer devices and have enabled us to achieve important design
    wins for products for use in applications ranging from game
    consoles and MP3 players to advanced servers. In this context,
    we are currently preparing for the qualification of our trench
    technology at the 58nm technology node by the end of our 2008
    financial year. At the same time we are working on designs
    beyond this technology node with an open platform approach and a
    range of architectures and technologies under review.
    We are among the leaders in the transition to
    manufacturing on 300mm wafers.  We were among
    the first DRAM suppliers to transition a substantial portion of
    our manufacturing to 300mm technology and began volume
    production on this basis in 2001. Today, we own and operate two
    300mm facilities and have access through our Inotera Memories,
    Inc. joint venture to one of the largest 300mm facilities in the
    world, according to Gartner. In the second quarter of the
    calendar year 2007, about 81% of the DRAM bits we produced were
    manufactured using 300mm wafers. This compares favorably to the
    industry average of 75%, as reported by iSuppli for the same
    quarter. We believe this places us ahead of our major
    competitors, many of which still manufacture to a larger extent
    on 200mm technology. We believe the primary benefit of this
    early transition to 300mm has been and will continue to be a
    reduction in our costs per bit, as our fixed costs of production
    can be spread over a higher number of chips per wafer. Because
    implementation of 300mm technology is complex and requires time
    and substantial capital investments, we expect our 300mm
    leadership to give us an advantage relative to competitors who
    have not yet transitioned as great a proportion of their
    capacity to 300mm as we have.
    Our business model leverages strong strategic
    alliances.  We have entered into strategic
    alliances that leverage our research and development
    capabilities and augment our front- and back-end manufacturing
    capacity in a capital-efficient manner. We believe that we use
    strategic alliances to a greater extent than our competitors and
    that the continued success of our fab cluster
    concept is a key element of our business model. We believe that
    our strategic alliances, including our Inotera and Qimonda
    Suzhou joint ventures, as well as our foundry partnerships with
    SMIC and Winbond, enable us to benefit from significant
    economies of scale at a reduced level of capital expenditures,
    even as we seek, through productivity improvements and new
    capacity such as the manufacturing facility we plan to construct
    in Singapore, to maintain at least half of our production
    capacity in house. We also believe that these arrangements
    increase our operating flexibility by reducing our fixed costs,
    which, in turn, can help us reduce volatility in our operating
    margins throughout our industrys business cycle.  Our
    Strategy
    
    Improve our average selling price by maintaining our focus
    on technologically advanced, customer and application specific
    DRAM products for infrastructure, graphics, mobile and consumer
    applications.  We believe significant growth
    opportunities exist for application-specific DRAMs used in
    servers, graphics cards, game consoles, mobile phones, digital
    audio players, GPS devices, televisions, set-top boxes, DVD 80




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##### Table of Contents



recorders and other consumer electronic devices. Our customers
    and the other original equipment manufacturers we target in
    these areas increasingly require DRAM products with higher
    performance, lower power consumption and smaller form factors,
    all at an attractive price. We intend to focus on memory
    products for applications in these areas as we seek to develop,
    frequently together with research and development partners, new
    solutions to the physical and economic challenges posed by the
    ever-increasing technical and financial demands of these
    customer requirements. We plan to meet and drive this demand by
    continuing to exploit our strengths in technology innovation,
    not only in the form of our trench technology but also in the
    form of new architectures and platforms that may result from
    these research and development activities. We have enhanced our
    product development capabilities and have recruited a
    significant number of product development engineers, many of
    whom work directly with customers on application- and
    customer-specific product designs. This has already enabled us
    to substantially expand our product offerings and market share
    in these areas. Because in our experience these
    application-specific products generally command higher and more
    stable prices, we believe that these efforts will result in a
    higher blended average selling price for our DRAMs as compared
    with the industry as a whole and reduced volatility of our
    operating results.  
    Leverage our technology leadership and increase our
    presence in low cost regions to continue to reduce unit
    costs.  We believe that our leadership in the
    transition to 300mm manufacturing technology will enable us to
    realize the potential benefits of reduced unit costs offered by
    this transition earlier than our major competitors. We intend to
    remain ahead of our major competitors in this process and plan
    to substantially complete our transition to manufacturing on
    300mm wafers within the next few years. We are also seeking to
    successfully ramp up manufacturing yield on the 80nm and the
    75nm technology nodes and to introduce a 58nm technology by the
    end of our 2008 financial year, which we believe will enable us
    to derive unit cost improvements. We further intend to
    successfully develop and implement future process technology
    nodes by leveraging our accumulated expertise, R&D
    capabilities and strategic alliances. In addition, we are
    actively increasing the proportion of our manufacturing located
    in low cost Asian regions. We expect our focus on Asia to remain
    a key part of our strategy as we seek further opportunities to
    reduce our fixed and variable production costs.
    Improve profitability and return on capital throughout our
    industrys business cycle.  We believe
    that we will achieve significantly improved profitability
    throughout our industrys business cycle through the
    average selling price improvement and unit cost reduction
    strategies outlined above. We also believe that we will reduce
    the volatility of our operating results by increasing the
    flexibility of our operations through our foundry partnerships
    and by maintaining or expanding the share of our revenues that
    are from advanced infrastructure, graphics, mobile and consumer
    DRAM products. While we intend to maintain at least half of our
    production capacity in-house, through productivity improvements
    and new capacity such as the manufacturing facility we plan to
    construct in Singapore, we plan to continue to focus on our
    strategic alliances and our fab cluster-based business model to
    optimize capital efficiency of our operations. We believe this
    capital efficiency, combined with our targeted profitability,
    will enable us to significantly improve our return on capital
    employed.  Our
    History
   81




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##### Table of Contents



Benefits
    of our Carve-out
    
    Increased market responsiveness through an exclusive focus
    on the memory products business:  DRAMs are
    subject to different market dynamics compared to Infineons
    other products. By operating as a separate business we are able
    to react more effectively to the dynamics of the memory market
    through simplified decision-making processes independent from
    the requirements of Infineons remaining businesses. We
    believe that this independence permits us to focus exclusively
    and quickly on our customers, and anticipate their specific
    needs.
    Direct access to a distinct investor
    base:  We believe that as a stand-alone
    U.S.-listed
    semiconductor memory company, with distinct opportunities and
    risk characteristics, we appeal more readily to those investors
    interested in a focused semiconductor memory company.
    Furthermore, as a stand-alone company, we enjoy direct access to
    the capital markets.
    Incentives for our employees directly tied to our own
    performance:  We believe that our share price
    reflects our performance more accurately than Infineons
    share price did and therefore can be used as a more effective
    compensation tool for our employees. Our shareholders have
    authorized the Supervisory Board to grant to the members of the
    Management Board, and the Management Board to grant to certain
    key executives in our group, through September 30, 2009, a
    total of 6,000,000 non-transferable option rights to receive our
    ordinary shares in the form of ADSs. As of September 30,
    2007, a total of 1,883,400 options were outstanding. We have not
    granted any options since that date.
    Increased flexibility to pursue strategic
    cooperations:  We believe that by becoming an
    independent business, we have substantially increased our
    flexibility to engage in strategic cooperations such as
    alliances or joint ventures of particular benefit to the
    semiconductor memory business. In addition, we are in a position
    to issue our own securities, which may enable us to participate
    more readily in the further consolidation of the memory business
    should opportunities, which are attractive from a strategic,
    operating and financial perspective, arise.  Products
    and Applications
   82




---



##### Table of Contents



For the financial year ended September 30,2005


2006


2007(in


(in percent


(in


(in percent


(in


(in percentmillions)


of total)


millions)


of total)


millions)


of total)DRAMs:Standard DRAMs for PCs, Notebooks and workstations


1,435



51
%


1,784



47
%


1,407



39
%DRAMs for infrastructure, graphics, mobile and consumer
    applications


1,089



38
%


1,928



50
%


2,160



60
%Total DRAMs


2,524



89
%


3,712



97
%


3,567



99
%Other products and
    services(1)


301



11
%


103



3
%


41



1
%Total


2,825



100
%


3,815



100
%


3,608



100
%     (1)
    
    Primarily includes embedded DRAM products, flash memory products
    and technology licensing revenues. Technology licensing revenues
    consists of revenues from licensing our technology to third
    parties in connection with manufacturing agreements that provide
    us with access to manufacturing capacity. See
     Strategic Alliances and Agreements.  Brands
  ® ® ®
  DRAMs
    for Infrastructure, Graphics, Mobile and Consumer
    Applications
    Infrastructure
    Applications
   83




---



##### Table of Contents



Graphics
    Applications
    Mobile
    and Consumer Applications
  ®
  
    mobile phones;
    mobile consumer products, such as digital still cameras and
    digital audio players; and
    stationary consumer products, such as digital televisions and
    DVD recorders.    ® ®
  ® non-volatile ®
   84




---



##### Table of Contents



Standard
    DRAMs for PC, Notebook and Workstation
    Applications
      Other
    Products and Technology Licensing
      system-on-chip
   85




---



##### Table of Contents



Products

Principal features

Principal applicationsStandard DRAM Components

Memory components in different package configurations with
    different interfaces 
    (DDR, DDR2) and densities (128Mb, 256Mb, 512Mb and 1Gb)

   Mainstream bandwidths from DDR-333 to
    DDR2-800
       Organization: x4, x8, x16

   Memory modules
       Components-on-mainboardsPersonal Systems DRAM Modules

Unbuffered Dual Inline Memory Modules (DIMMs) based on DDR and
    DDR2 components, with densities ranging from 256MB to 2GB

   Mainstream bandwidths from DDR-333 to
    DDR2-800

   Desktop computers
       WorkstationsUnbuffered Dual Inline Memory Modules (DIMMs) with ECC (Error
    Correction Code) based on DDR and DDR2 components, with
    densities ranging from 256MB to 2GB

   Mainstream bandwidths from DDR-333 to
    DDR2-800
       Error correction code

   Workstations
       Entry-level ServersSO (Small-Outline)-DIMMs based on DDR or DDR2 components, with
    densities ranging from 256MB to 2GB

   Mainstream bandwidths from DDR-333 to
    DDR2-800

   Notebook computersMicro-DIMMs based DDR2 components, with densities ranging from
    256MB to 1GB

   Bandwidths from DDR2-400 to DDR2-667
       35% smaller than standard SO-DIMMs

   Sub-Notebooks
       Ultra-mobile PCsInfrastructure DRAM modules

Registered DIMMs and customized DIMMs based on DDR and DDR2
    components, with densities ranging from 256MB to 8GB

   Mainstream bandwidths from DDR-266 to
    DDR2-800

   ServersFB (Fully Buffered) DIMMs based on DDR2 components, with
    densities from 512MB to 4GB

   Bandwidths from DDR2-533 to DDR2-800
       Advanced Memory Buffer technology

   Servers
       WorkstationsVery-low-profile-Registered DIMMs based on DDR2 components, with
    densities ranging from 512MB to 4GB

   Bandwidths from DDR2-533 to DDR2-800
       Reduced height

   Blade servers 86




---



##### Table of Contents



Products

Principal features

Principal applicationsNetworking, Storage and Industrial DRAM Products

Memory components and modules in different package
    configurations with different interfaces (SDR, DDR, DDR2) and
    densities (128Mb, 256Mb, 512Mb, 1Gb, 2Gb) High Density DIMMs
    (DDR1, DDR2) and Fully Buffered DIMMs (DDR2)

   Industrial temperature Capabilities
       Lead-containing DRAM packages
       Low power self refresh
       Mainstream bandwidths from DDR-266 to
    DDR2-800

   Networking, Telecom and Industrial
    equipment
       StorageGraphics

Graphics RAM (256Mb, 512Mb) based on DDR2 and GDDR3 interfaces

   Bandwidth per pin from 0.8Gb per second
    up to 2Gb per second
       Organization: x16, x32
       Manufactured in 75nm, 80nm, 90nm and
    110nm process technology

   Graphics cards in desktop and note-book
    computers
       Game consolesCustomized DRAM components

Application specific DRAM configurations in terms of memory
    density and memory interface

Gaming application and Digital TV applicationsMobile and
    Consumer(1)

Mobile-RAM (128Mb, 256Mb, 512Mb, 1Gb) based on SDR and DDR
    interfaces; also available as known good dies

   Ultra low power
       FGBA-package
       Organization: x16, x32 (Mobile RAM)

   Top range mobile phones (2.5G/3G)
       PDAsCellularRAM®
    (64Mb, 128Mb); also available as known good dies

   Low operating current
       Low standby current
       Low power consumption
       Manufactured in 110nm process Technology

   Digital still cameras
       Digital audio players
       Mid-range mobile phones (2.5G/3G)
       GPS     (1)
    
    We also sell our range of standard DRAM components to customers
    who manufacture infrastructure equipment and consumer electronic
    devices including digital televisions, set-top boxes and DVD
    recorders. 87




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##### Table of Contents



DRAM
    Density and Interface Development
  ramp-up
  For the financial year ended September 30,DRAM:

2005


2006


2007(in percent)By density:128Mb


1



0



0256Mb


51



24



12512Mb


47



74



861Gb


1



2



2By interface:SDRAM


5



3



2DDR


60



30



15DDR2


27



51



64Specialty DRAMs


8



16



19     Customers,
    Sales and Marketing
       88




---



##### Table of Contents




    Key Account approach:  Via our Key
    Account Centers, we tailor our sales approach to our customers,
    serving our largest customers, primarily global PC and Server
    OEMs, and serve our local OEMs, module manufacturers and
    distributors via our regional sales organizations. Each Key
    Account Center team is responsible for the needs of its
    customers on a global basis, and we expect them to achieve or
    maintain a position as a top supplier of DRAM to that customer
    in terms of quality and volume. We believe that our key account
    approach assists us in developing and maintaining strong
    relationships with our major customers, which is particularly
    important for customers who purchase primarily standard DRAMs
    who could easily migrate to other suppliers.
    Leveraging our existing relationships to expand the
    applications with which we serve our
    customers:  Because many of our Key Accounts
    in the PC and Server markets also produce graphics, mobile and
    consumer products, we work with our existing customer base to
    sell a wider range of our products and applications. For
    example, during the last year, we have been increasing our
    efforts to market customer- and application-specific DRAMs for
    graphics, mobile and consumer applications, because we believe
    the market for these applications will be attractive with
    respect to price, stability and demand growth.
    Leveraging our strong technical skills to work directly
    with customers to design specific memory
    products:  The third key focus of our sales
    strategy is to continue to expand the product portfolio we
    deliver to each of our customers by leveraging our strong
    technical skills and working directly with them to design
    specific memory products for use in their end products. Our
    development engineering teams, composed of trained engineers,
    work directly with customers, creating products specifically
    designed for particular customers in a process we call
    design-in. In some cases, several DRAM producers may
    attempt to design their product into the customers
    application, each vying to best meet the customers
    requirements. Our development engineering teams play a key role
    in this regard.       89




---



##### Table of Contents



Sales by
    Region
  For the financial year ended September 30,2005


2006


2007Germany


8



8



7Rest of
    Europe(1)


12



12



11North America


38



42



37Asia/Pacific


38



31



33Japan


4



7



12100
%


100
%


100
%     (1)
    
    The Rest of Europe region also includes other countries and
    territories in the rest of the world outside of the listed main
    geographic regions with aggregate sales representing no more
    than 2% of total sales in any period.        Competition
    
    Standard DRAMs for PC and workstation
    applications.  We compete in this market on
    the basis of price, delivery reliability and logistical support.
    We consider a strong reputation in delivery reliability to be
    vital for this market.
    DRAMs for infrastructure, graphics, mobile and consumer
    applications.  We compete in these markets on
    the basis of product quality, performance, reliability and
    engineering support. Logistical support is particularly
    important for infrastructure applications. Our engineering teams
    are able to design customer-specific products based on our DRAM
    trench technology, with high performance for uses such as in
    graphics 90




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##### Table of Contents



Principal Competitor

Areas of competition

Market shareSamsung Electronics

Standard, infrastructure, graphics, mobile and consumer DRAMs


29
%Hynix Semiconductor, Inc.

Standard, infrastructure, graphics, mobile and consumer DRAMs


17
%Micron Technology, Inc.

Standard, infrastructure, mobile and consumer DRAMs


11
%Elpida Memory, Inc.

Standard, infrastructure, mobile and consumer DRAMs


10
%Nanya Technology
    Corporation(1)

Standard DRAMs


6
%     (1)
    
    Nanya Technology Corporation is our joint venture partner in
    Inotera Memories, Inc.    Research
    and Development
      Product
    Development
   91




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##### Table of Contents



Process
    Technologies
         92




---



##### Table of Contents



Packaging
    Technology
    Cooperation
    with Infineon
    Locations
    Principal
    Research and Development Locations
  Location

Areas of competenceBurlington, Vermont

Low power and mobile and consumer DRAMsDresden,
    Germany(1)

DRAM technology, flash technology, emerging memory technology,
    package technology and photomask technology developmentMunich,
    Germany(2)

Computing and graphic DRAMs, as well as emerging memory
    research; flash product developmentPadua, Italy

Flash product development and designRaleigh, North Carolina

Product development for standard and specialty DRAMXian, China

Computing and consumer DRAMs     (1)
    
    Includes our own research and research conducted in conjunction
    with our development partner, Nanya ,our photomask related
    research and development conducted in conjunction with AMD and
    Toppan, our process and tool development in the Center for
    Nanoelectronic Technologies together with AMD and the Fraunhofer
    Society and our material research conducted in
    namlab in cooperation with the Technical University
    of Dresden.(2)
    
    Includes our own research and research conducted in conjunction
    with our development partner, Nanya.   93




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##### Table of Contents



Strategic
    Alliances and Agreements
    
    worldwide access to the expertise of other industry
    participants, including manufacturing competence in new
    locations and additional experienced R&D employees;
    sharing the risks inherent in the development and manufacture of
    new products;
    sharing costs, including the costs of R&D and production
    ramp-up; and
    efficiency gains, including reduced time-to-market of new
    generations of semiconductor devices and greater economies of
    scale.   94




---



##### Table of Contents



Principal
    Strategic Alliances
  Partner

Relationship

Principal Activity

LocationNanya

Joint venture participant in Inotera, in which we hold a 35.6%
    interest(1)

DRAM manufacturing at Inoteras new 300mm facility

Taoyuan, TaiwanNanya

Joint R&D activities

R&D in both product and technology development for 90nm,
    75nm and 58nm process technologies

Dresden and Munich, GermanyCSVC

Joint venture participant in Qimonda Suzhou in which we hold a
    72.5% economic
    interest(2)

Back-end assembly and test at the joint ventures new
    facility

Suzhou, ChinaSMIC

Foundry manufacturing

Manufacturing capacity at SMICs facilities

Shanghai and Beijing, ChinaWinbond

Foundry manufacturing

Manufacturing capacity at Winbonds facilities

Hsinchu, and Taichung, Taiwan     (1)
    
    Nanya holds slightly more Inotera shares than we do, and the
    public and employees of Inotera own the remainder.(2)
    
    We are obligated to inject additional equity of
    $86.5 million into the joint venture by July 2008 financial
    year. This would increase our ownership percentage accordingly.      Research
    and Development Alliances
   95




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##### Table of Contents



Manufacturing
    Alliances
  start-up
 96




---



##### Table of Contents



Inotera
    ramp-up
    
    an amount representing the front-end cost per wafer Inotera
    incurs, plus
    a fixed percentage of the notional total profit (or loss) the
    buyers realize when they sell the wafer.    
    the front-end cost per wafer Inotera incurred (including its
    cost of goods sold and research and development expenses,
    the back-end cost per wafer the buyers incurred (including the
    costs of back-end assembly and testing processes); and
    a fixed percentage of the average selling price per wafer we
    realize to cover overhead costs we incur, which is in line with
    other companies in the industry.    (lock-up)
 97




---



##### Table of Contents



CSVC
      SMIC
      Winbond
   98




---



##### Table of Contents



300mm-wafer
  300mm-wafer
  Facilities
    and Manufacturing
  Manufacturing
    Facilities
    Current
    and Planned Manufacturing Facilities
  Year productionline came or isexpected to come





Output to whichon-stream


Clean room
    m2


we are entitledFront-end facilities (wafer fabrication):Our Own Facilities300mm facility, Dresden, Germany


2001



10,177


All200mm facility, Richmond, Virginia


1998



16,771


All300mm facility, Richmond, Virginia


2005



12,218


All300mm facility,
    Singapore(1)


2009



20,000


AllJoint Venture Facilities300mm Inotera Memories facility, first module,
    Taiwan(2)


2004



N/A


Half300mm Inotera Memories facility, second module,
    Taiwan(2)


2006



N/A


HalfFoundry Capacity200mm Infineon facility, Dresden,
    Germany(3)


1996






Variable corridor200mm Winbond facility,
    Taiwan(4)


1999






up to 19,000 wspm300mm Winbond facility,
    Taiwan(4)


2006






up to 24,000 wspm200mm SMIC facility, Shanghai,
    China(4)


2003






up to 20,000 wspm300mm SMIC facility, Beijing,
    China(4)


2004






up to 15,000 wspmBack-end facilities (packaging, assembly and
    testing):(5)Dresden, Germany


1996



3,211


AllMalacca,
    Malaysia(6)


1973



12,163


AllPorto, Portugal


1997



17,697


AllSuzhou,
    China(7)


2004



14,124


AllJohor,
    Malaysia(8)


2008



25,000


All  99




---



##### Table of Contents



(1)
    
    On April 25, 2007, we announced plans to construct a
    fully-owned manufacturing facility in Singapore. Depending on
    the growth and development of the world semiconductor market, we
    plan to invest approximately 2 billion in the
    facility over the next five years.(2)
    
    Owned by Inotera Memories, Inc., our joint venture with Nanya in
    which we and Nanya each own minority shares. We own 35.6% of the
    shares as of September 30, 2007. Our share in the
    production of the joint venture is 50%. The 35.6% of the shares
    we own include 0.24% of the share capital that remained held by
    Infineon Technologies Investment B.V. at the time of the
    carve-out. These shares cannot be transferred to us because of
    Taiwanese legal restrictions, and Infineon Investments holds
    them in trust for us.(3)
    
    During our 2007 financial year, approximately 57% of this
    facilitys capacity was used for the production of our
    products. As described under Related Party Transactions
    and Relationships  with Infineon, we use
    capacity at Infineons 200mm manufacturing facility in
    Dresden pursuant to an agreement with Infineon, as amended in
    January 2007. Under this agreement we have agreed to share
    equally with Infineon any potential restructuring costs that
    might be incurred in connection with the ramp-down of
    production, if neither company can use that capacity.(4)
    
    We own no equity interest in this facility but have licensed
    technology to the third-party owner. We are contractually
    entitled to a stated amount of the facilitys DRAM output,
    which is manufactured using our technology. See
     Strategic Alliances and Agreements for
    more detail on these arrangements. We have recently phased out
    capacity utilization at the 200mm line at Winbond.(5)
    
    In addition, we have agreements with EEMS Italia SpA and UTAC,
    which provide additional back-end subcontracting services at
    their facilities in Italy and China and Singapore. We have also
    entered into a partnership with EEMS Italia SpA for the assembly
    and testing of memories in a dedicated facility in Suzhou, China.(6)
    
    Includes about
    2,000m2
    cleanroom and
    10,000m2
    not cleanroom classified production area.(7)
    
    We constructed this facility pursuant to our joint venture
    agreement with CSVC. See  Strategic Alliances
    and Agreements for more detail on these arrangements. We
    recently announced plans to construct a second manufacturing
    module with an additional cleanroom area of about
    10,000m2
    in calendar year 2007 for which we expect capital expenditures
    of 250 million over the next three years.(8)
    
    We recently announced plans to construct a new facility for
    module manufacturing in Johor, Malaysia for which we expect to
    invest 150 million over the next five years.    Process
    technology
     100




---



##### Table of Contents



Front-End
    Manufacturing
    Wafer
    Size Roadmap
  per-unit ramp-up per-unit
  ramp-up,
  Feature
    Size Roadmap
   101




---



##### Table of Contents



Back-End
    Manufacturing
        Fab
    Cluster System
    
    implement identical technology roadmaps at all sites where the
    equipment permits this;
    synchronize manufacturing processes and quality control at all
    sites; and
    quickly move best practices developed at one
    facility to all operations, which helps us to maximize quality
    and accelerate
    ramp-up
    times. For example, we continuously monitor yield at each of the
    sites in our fab cluster. Differences in yield lead to a
    comparison of practices and to an identification of each
    sites comparative strengths. This results in our ability
    to set best practices for the entire fab cluster.  ramp-up
 102




---



##### Table of Contents



back-end back-end
  Mask
    Manufacturing
    ISO
    Certification
      Intellectual
    Property
    Allocation
    of Existing Patents
      Cross-License
    Under Future Patents
     103




---



##### Table of Contents



Sublicense
    Rights
    
    the patents are used outside the memory products business;
    we receive a grant-back license from the spin-off or joint
    venture and its majority shareholder in the memory products
    business; and
    such majority shareholder has no pending patent law suit with us.    As
    long as we are a Majority-Owned Subsidiary of
    Infineon
      Patent
    Licensing Negotiations with Third Parties
    Cross-License
    Agreements with Third Parties
   104




---



##### Table of Contents



Protecting
    Our Intellectual Property
        Settlement
    Agreement with Rambus
   105




---



##### Table of Contents



Amendment
    and Partial Termination of Our License Agreement with
    Saifun
  ® ® ®
  Equipment
      Raw
    Materials
     106




---



##### Table of Contents



Employees
    As of September 302005


%


2006**


%


2007


%Function:Production


7,686



80
%


9,113



77
%


9,834



73
%Research & development


1,440



15
%


1,756



15
%


2,506



19
%Sales & marketing


264



3
%


320



3
%


391



3
%Administrative


216



2
%


613



5
%


750



5
%Total


9,606



100
%


11,802



100
%


13,481



100
%Region:Germany


4,058



42
%


4,684



40
%


5,072



38
%Other Europe


1,405



15
%


1,666



14
%


2,175



16
%North America


2,494



26
%


2,763



23
%


2,955



22
%Asia/Pacific (**)


1,622



17
%


2,651



23
%


3,220



24
%Japan**


27



*



38



*



59



*Other


0



0
%


0



0
%


0



0
%Total


9,606



100
%


11,802



100
%


13,481



100
%     *
    
    Less than 1% of total numbers.**
    
    Our operations in Japan and Korea were legally transferred from
    Infineon in our 2007 financial year.    lokale Betriebsräte Konzernbetriebsrat and/or Betriebsverfassungsgesetz Sprecherausschuss
  Arbeitgeberverband Rahmentarifvertrag Gehaltstarifvertrag
 107




---



##### Table of Contents



Backlog
    Legal
    Matters
          
    liabilities arising in connection with intellectual property
    infringement claims relating to memory products were fully
    allocated to us; and
    liabilities arising in connection with actual or alleged
    antitrust violations with respect to DRAM products were fully
    allocated to us. 108




---



##### Table of Contents



Antitrust
    Matters
  U.S.
    Department of Justice Investigation
    U.S.
    Civil Litigation
    Direct
    Purchaser Litigation
       109




---



##### Table of Contents



Indirect
    Purchaser Litigation
     110




---



##### Table of Contents



Foreign
    Purchaser Litigation
    State
    Investigations
   111




---



##### Table of Contents



European
    Commission Investigation
    Canadian
    Competition Bureau Investigation
    Canadian
    Civil Litigation
    Securities
    Class Actions
   112




---



##### Table of Contents



Patent
    Litigation
  Lin
    Packaging Technologies, Ltd.
    Accruals
    and the Potential Effect of these Lawsuits on Our
    Business
        Other
    Matters
   113




---



##### Table of Contents



Environmental
    Protection, Safety and Health
      2
      Relevant
    Environmental Laws and Regulations
       114




---



##### Table of Contents



115




---



##### Table of Contents



Real
    Property
    Approximate size




Owned or leasedLocation

Land


Building


Primary uses (in square meters)

Land

Building(in
    1,000m2)Burlington, Vermont


*



3


Research

*

LeasedDresden,
    Germany(1)


132



154


Research, Wafer fabrication, Assembly and Testing

Owned

Partly owned
    and leasedMalacca,
    Malaysia(2)


13



16


Assembly and Testing

Leased

Partly owned
    and leasedMunich,
    Germany(3)


*



48


Headquarters and Research

*

LeasedPadua, Italy


*



**


Research

*

LeasedPorto,
    Portugal(4)


220



57


Assembly and Testing

Owned

OwnedRaleigh, North Carolina


*



9


Research

*

LeasedRichmond,
    Virginia(5)


853



126


Wafer Fabrication

Owned

OwnedSuzhou, China


200



41


Assembly and Testing

Leased

OwnedXian, China


*



2


Research

*

Leased     *
    
    Not applicable for leased properties.**
    
    The premises in Padua, Italy, consists of
    450m2(1)
    
    Refers to our 300mm wafer fabrication, back-end manufacturing
    and research facility, including research conducted in
    conjunction with our development partner, Nanya. The building
    space is in two locations, of which
    20.000m2
    is leased.(2)
    
    Includes a
    13,000m2
    building owned by our company and
    3,000m2
    of space leased from Infineon.(3)
    
    Includes research and office space at our five locations in and
    around Munich.(4)
    
    Subject to limited exceptions, under the terms of the financing
    arrangements relating to the site, we must receive the consent
    of Portuguese authorities to sell, lease or assign this property.(5)
    
    We currently have five buildings on this property.  2
    2 2
 116




---



##### Table of Contents



MANAGEMENT
  Overview
    of Corporate Governance Structure
  Aktiengesetz
      Beherrschungsvertrag
       117




---



##### Table of Contents



Supervisory
    Board
  Gesetz über die Drittelbeteiligung
    der Arbeitnehmer im Aufsichtsrat
    leitende Angestellte
      
    to appoint our Management Board;
    to monitor our management;
    to approve matters in areas that the Supervisory Board has made
    generally subject to its, or one of its committees,
    approval; and
    to approve matters that the Supervisory Board decides on a case
    by case basis to make subject to its approval. 118




---



##### Table of Contents



Supervisory
    Board Members
    Name

Age

Function

Principal occupationPeter J. Fischl


61


Chairman

CFO and Member of the Management Board of Infineon Technologies
    AG.Richard Previte


72


Deputy
    Chairman

Former President, Advanced Micro Devices, Inc.Prof. Dr. Claus Weyrich


63


Member

Former Member of the Management Board of Siemens AGYoshio Nishi


67


Member

Professor, Stanford UniversityJohann Grundbacher


43


Member

Electrical Engineer, Qimonda AGDr. Lothar Armbrecht


54


Member

Member of Works Council   Entlastung
      Significant
    Differences between our Corporate Governance Practices and those
    of U.S. Companies Listed on the New York Stock
    Exchange
  http://www.qimonda.com/about/investorrelations/corporate_governance/significant_differences.html.
  Committees
    of the Supervisory Board
    Investment,
    Finance and Audit Committee
    
    preparing the decisions of the Supervisory Board concerning
    approval of our companys annual financial statements,
    including review of the financial statements, the management
    report, the proposed application of earnings and the reports of
    our registered public accounting firm;
    reviewing the (interim) financial statements of our company that
    are made public or otherwise filed with any securities
    regulatory authority; 119




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
    handling auditor independence issues, the proposal to the
    Supervisory Board with respect to the appointment of the
    independent auditor by the general shareholders meeting,
    mandating our auditor (including the fee arrangement and the
    determination of the focus of the audit) to audit our
    consolidated and unconsolidated annual financial statements,
    approving any consulting services by the auditor and supervising
    the auditor including the resolution of disputes between the
    Management Board and the auditor;
    approving decisions of our Management Board or one of its
    committees regarding increases of our companys capital
    through the issuance of new shares from our authorized capital,
    to the extent that we are not either issuing the shares to
    employees or using them for a share option plan (subject to
    contrary resolutions of the shareholders meeting);
    approving decisions of our Management Board in relation to any
    investment or disposition if its value exceeds 10% of the total
    financial years investment budget, in relation to the
    agreement of securities, guarantees and loans to or from third
    parties outside our group of companies which in each case
    exceeds 5% of our shareholders equity
    (Eigenkapital) on the latest audited consolidated balance
    sheet of our group of companies and in relation to the financial
    years budget (including finance, investment and personnel
    planning);
    handling risk management issues and supervising the risk
    management system;
    establishing procedures pursuant to which our employees can
    report to the Investment, Finance and Audit Committee, on an
    anonymous and confidential basis, complaints regarding our
    accounting and auditing practices, including internal accounting
    controls, and enacting rules pursuant to which such complaints
    received by us from third parties will be reported to the
    Investment, Finance and Audit Committee;
    discussing any flaws relating to our internal control systems,
    which come to the attention of the Investment, Finance and Audit
    Committee;
    examination of our bookkeeping, documents and assets;
    approval of Management Board resolutions on the utilization of
    the authorization granted by our shareholders to issue
    convertible bonds, including, in particular, the maximum amount
    of the issuance and the exclusion of shareholders
    preemptive rights.      Technology
    Committee
    Presidential
    Committee
   120




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Management
    Board
    Geschäftsverteilungsplan
  case-by-case
    
    preparation of the annual financial statements;
    calling shareholders meetings;
    matters for which the consent of the shareholders or of the
    Supervisory Board must be obtained; and
    matters involving basic organizational policy, business policy
    and investment and financial planning questions for our company.       121




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Management
    Board Members
    Principal businessactivities outsideTerm

Position

company (includingName

Age

expires

within company

principal directorships)Kin Wah Loh


53



2011


Chairman of the Management Board

Dr. Michael Majerus


46



2010


Member of the Management Board

Director, Inotera Memories, Inc.Thomas Seifert


44



2009


Member of the Management Board

Director, Inotera Memories, Inc.   Kin Wah Loh
  Dr. Michael Majerus
  Thomas Seifert
      Compensation
   122




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FixedremunerationPeter J. Fischl

$
Richard Previte


100,000Yoshio Nishi


100,000Prof. Claus Weyrich


4,861Michael v. Eickstedt


Dr. Lothar Armbrecht


50,000Johann Grundbacher


50,000Total

$
304,861        123




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Other


Yearly bonus dependent


TotalBase salary


compensation


on company performance


compensationLoh Kin Wah


1,050,000



63,832







1,113,832Dr. Michael Majerus


600,000



25,291







625,291Thomas Seifert


600,000



19,634







619,634Total


2,250,000



108,757







2,358,757   Employee
    Stock Option Program
         124




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125




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PRINCIPAL
    SHAREHOLDERS
    Shares and ADSs owned afterthe initial public offeringPercent


NumberInfineon Technologies Investment
    B.V.(1)


49.03
%


167,686,026Infineon Technologies
    AG(2)


28.44
%


97,293,975Public Shareholders


22.53
%


77,050,000All the members of our Supervisory and Management Boards as a
    group


0



0100
%


342,000,001     (1)
    
    On July 17, 2006, Infineon Technologies Holding B.V., a
    wholly-owned subsidiary of Infineon Technologies AG, transferred
    its Qimonda shares, representing approximately 55.9% of our
    total share capital at that time, to its wholly-owned subsidiary
    Infineon Technologies Investment B.V., a private limited
    liability company under Dutch law. On July 18, 2007, in
    connection with the transfer of ownership of Qimonda Japan K.K.
    from Infineon, a capital increase of Qimonda AG comprising a
    single share was registered with the Commercial Register. The
    current registered share capital of Qimonda AG amounts to
    684,000,002. On September 26, 2007, Infineon
    Technologies Investment B.V. placed bonds that are exchangeable
    for an aggregate of up to 20,515,267 of Qimonda ADSs
    (representing approximately 6% of our current share capital)
    currently held by Infineon Technologies Investment B.V at
    specified times until August 31, 2010.(2)
    
    On September 25, 2007, Infineon sold 28,750,000 Qimonda
    shares to the public from its shareholdings in a public
    secondary offering. Infineons holdings include 3,550,098
    Qimonda shares equal to 1.04% of the equity interests in Qimonda
    that Infineon loaned to an affiliate of J.P. Morgan
    Securities, Inc. in connection with Infineon Technologies
    Investment B.V.s placement of bonds exchangeable into
    shares of our company as described above. These shares must be
    returned no later than August 31, 2010 upon the termination
    of the loan. Infineon has advised us that J.P. Morgan has
    already returned some of these shares.      
    a resolution not to give effect to existing shareholders
    preemptive rights in a capital increase;
    any capital decrease, merger, consolidation, spin-off, sale or
    other transfer of all or substantially all of our assets;
    a change in the corporate form or business purpose of the
    company; or
    the dissolution of our company. 126




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RELATED
    PARTY TRANSACTIONS AND RELATIONSHIPS
  With
    Infineon
    Carve-out
    and Control
    Handelsregister Amtsgericht
       127




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Contribution
    Agreements
  Contribution
    Agreement between Infineon AG and Qimonda AG
    
    define the assets, liabilities and employees that were
    transferred to us;
    govern the intercompany licensing of intellectual
    property; and
    delineate the indemnification claims that Infineon will have
    against us in respect of legal matters and other liabilities and
    contingencies.  Namensaktien
  Contributed
    assets and liabilities
    
    fixed assets and current assets attributable to the Memory
    Products segment (not including trade accounts receivable for
    products and services provided to third parties and certain
    related parties, which are netted against trade accounts
    payable);
    intellectual property, including patents (as described in more
    detail in Our Business  Intellectual
    Property), trade marks, know-how, software and other
    intellectual property;
    contracts and offers relating exclusively to products and
    services provided by the Memory Products segment;
    rights and obligations arising under permits and other legal
    relationships with governmental entities (including those
    arising under subsidies), so long as they do not relate to
    individual persons;
    liabilities attributable exclusively to the Memory Products
    segment, including those contained in the carve-out balance
    sheet, those arising under contracts with third parties and
    employment relationships (including pension liabilities),
    contingencies (including those arising in the future on the
    basis of events that occurred prior to the carve-out date) and
    other liabilities attributable exclusively to the Memory
    Products segment and which have arisen by the carve-out date
    (not including trade accounts payable  see above);
    risks and liabilities arising out of financings, credit lines,
    leases and guarantees, which Infineon entered into for the
    benefit of the Memory Products segment; and
    ownership in certain equity investments, including in Inotera
    Memories, Inc., Infineon Technologies SC 300 GmbH &
    Co. OHG, Maskhouse Building Administration GmbH & Co.
    KG, Advanced Mask Technology Center GmbH & Co. KG
    (legal transfer is still pending) and Hwa-Keng Investment Inc.
    (meanwhile liquidated. Pursuant to the contribution agreement
    Infineon has transferred to us the assets it received upon the
    liquidation.)   128




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Arrangements
    relating to Inotera, Memory Products Japanese and Korean
    Operations, AMTC and BAC
    (lock-up)
      Employment
    Matters
    Arrangement
    concerning the Licensing of Intellectual Property
    Indemnification
   129




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Costs and
    taxes; future tax liabilities
    Contribution
    Agreement between Infineon Technologies Holding B.V. and Qimonda
    AG
  Handelsregister Amtsgericht
    Dresden
    200mm Fab
   130




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Ongoing
    Services Relationships
    General
    Support Services
  Framework
    Agreement on Standard Support Services
      General
    Support Services
    
    sales support in various countries, most significantly France,
    Hong Kong, Ireland, Switzerland, United Kingdom and the United
    States;
    logistics services, including call center services in Europe,
    logistics support services in the Asia-Pacific region and
    freight forwarding services in the United States;
    purchasing services at locations
    and/or with
    respect to areas of expertise where we do not have sufficient
    purchasing resources;
    human resources services, including recruiting, compensation and
    benefits, payroll, site health care and training; 131




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
    facility management, including office and manufacturing space
    leasing, security, storage and transportation management;
    patent support, including patent administration, external
    support and reverse engineering;
    finance, accounting, including risk management and back-office
    support, for as long as we have not reached full staffing levels
    in this area
    strategy services, including support relating to market
    research; and
    certain other services in which our staff still needs to develop
    expertise.    Other
    Services
  Framework
    Agreements on Information Technology Services
         132




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Framework
    Agreement on Research and Development Services
      Special
    Services
    case-by-case
  With
    Management
     133




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Relationship
    with Siemens
     134




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ARTICLES OF
    ASSOCIATION
    Share
    Capital
          Authorized
    Capital
  Handelsregister
        (i)
    to the extent that new shares must be granted to holders of
    subscription warrants or convertible bonds that we have issued,
    in accordance with the terms of issuance of such warrants or
    convertible bonds; 135




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(ii)
    if (1) the new shares represent 10% or less of the existing
    share capital when the authorized capital or issuance of the new
    shares is registered and (2) the issue price of the new
    shares is not considerably less than the stock exchange price of
    the shares in our company; or(iii)
    to the extent necessary to avoid balancing out fractional
    residual amounts.      Conditional
    Capital
          Preemptive
    Rights
    Shareholders
    Meetings and Voting Rights
    elektronischer Bundesanzeiger
   136




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
    the exclusion of preemptive rights in a capital increase;
    capital decreases;
    the creation of authorized capital or conditional capital;
    dissolution;
    a merger (Verschmelzung) with another company or another
    corporate transformation;
    a transfer of all or virtually all of the assets of our
    company; and
    the conclusion of any direct control, profit and loss pooling or
    similar intercompany agreements.  Dividend
    Rights
         137




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Liquidation
    Rights
    Repurchase
    of Our Own Shares
    Corporate
    Purpose of Our Company
    Registration
    of the Company with Commercial Register
   138




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ADDITIONAL
    INFORMATION
  Group
    Structure
    Significant
    Subsidiaries
  Proportion ofourCountry of



ownershipCorporate Name

Residence

Field of activity

interestQimonda Europe GmbH

Germany

Distribution, Sales & Marketing


100
%Qimonda Dresden GmbH & Co. oHG

Germany

Production


100
%Qimonda Holding B.V

The Netherlands

Holding


100
%Qimonda Investment B.V

The Netherlands

Holding


100
%Qimonda Portugal S.A.

Portugal

Production


100
%Qimonda Richmond, LLC

United States

Production


100
%Qimonda North America Corp.

United States

Distribution, Sales & Marketing, Research and Development


100
%Qimonda Asia Pacific Pte Ltd.

Singapore

Distribution


100
%Qimonda Malaysia Sdn. Bhd

Malaysia

Production


100
%Qimonda Module (Suzhou) Co. Ltd.

China

Production


100
%Qimonda Technologies (Suzhou) Co., Ltd.

China

Production


62.8
%Qimonda Japan
    K.K(1)

Japan

Sales and Marketing


100
%Inotera Memories
    Inc.(2)

Taiwan

Production


35.6
%     (1)
    
    At the time of our carve-out, our operations in Japan were held
    in trust for Qimondas benefit until the legal transfer to
    Qimonda in the 2007 financial year took place.(2)
    
    Because of Inoteras significance for us within the meaning
    of
    Rule 3-09
    of the SECs
    Regulation S-X,
    we have incorporated by reference in this annual report,
    Inoteras audited consolidated financial statements as of
    and for the years ended December 31, 2005 and 2006  Dividend
    Policy
    Aktiengesetz Bilanzgewinn Bilanzverlust
   139




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Significant
    Changes
  Form 20-F, Form 20-F.
  Market
    Information
  General
    Trading
    on the New York Stock Exchange
    Price per ADS inU.S. dollarsHigh


LowAugust 2006 (beginning August 9)


16.28



13.54September 2006


17.91



15.90October 2006


17.50



13.82November 2006


18.85



14.11December 2006


18.65



17.00January 2007


17.45



15.17February 2007


15.60



14.45March 2007


14.93



13.81April 2007


15.69



14.09May 2007


15.16



14.14June 2007


17.00



14.94July 2007


17.04



14.80August 2007


14.81



12.20September 2007


13.42



10.91October 2007


11.37



9.37November 2007 (through November 15)


9.64



8.63     Exchange
    Rates
   140




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##### Table of Contents



Average
    exchange rates of the U.S. dollar per euro
  Financial year

Average2002


0.92082003


1.09192004


1.21992005


1.27272006


1.23612007


1.3582     Recent
    high and low exchange rates of the U.S. dollar per
    euro
  High


LowAugust 2006


1.2914



1.2735September 2006


1.2833



1.2648October 2006


1.2773



1.2502November 2006


1.3261



1.2705December 2006


1.3327



1.3073January 2007


1.3286



1.2904February 2007


1.3246



1.2933March 2007


1.3374



1.3094April 2007


1.3660



1.3363May 2007


1.3616



1.3419June 2007


1.3526



1.3295July 2007


1.3831



1.3592August 2007


1.3808



1.3402September 2007


1.4219



1.3606October 2007


1.4468



1.4092November 15, 2007


1.4691



1.4435     Taxation
  German
    Taxation
   141




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##### Table of Contents



Taxation
    of the Company
          Taxation
    of Dividends
    Bundeszentralamt für
    Steuern
  Withholding
    Tax Refund for U.S. Shareholders
     142




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##### Table of Contents



Bundeszentralamt für Steuern 20007-1998. 19114-0447.
  Taxation
    of Capital Gains
          Inheritance
    and Gift Tax
           143




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##### Table of Contents



Other
    Taxes
    United
    States Taxation
    (i)
    is:  
    an individual U.S. citizen or resident;
    a corporation organized under the laws of the United States of
    America or any state thereof; or
    an entity otherwise subject to U.S. federal income taxation
    on a net basis with respect to the underlying shares or the ADSs;  (ii)
    is not also a resident of Germany for German tax purposes;(iii)
    is the beneficial owner of the ADSs (and the dividends paid with
    respect thereto);(iv)
    holds the ADSs as a capital asset for tax purposes;(v)
    does not hold the ADSs in connection with the conduct of
    business through a permanent establishment, or the performance
    of personal services through a fixed base, in Germany; and(vi)
    is not subject to an anti-treaty shopping provision in the
    Treaty that applies in limited circumstances.      Taxation
    of Dividends
     144




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Taxation
    of Sales or Other Taxable Dispositions
      Information
    Reporting and Backup Withholding
  U.S.-related non-U.S. status U.S.-related Form W-8BEN).
  Exchange
    Controls and Limitations Affecting Shareholders
   145




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##### Table of Contents



Documents
    on Display
  1-800-SEC-0330. http://www.sec.gov
  Controls
    and Procedures
  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Annual Report on Internal Control over Financial
    Reporting
  Rule 13a-15(f) 15d-15(f)
  
    pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of the assets of our company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that receipts and expenditures of our company are being made
    only in accordance with authorizations of management and board
    of our company; and 146




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##### Table of Contents




    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    companys assets that could have a material effect on our
    financial statements.      Changes
    in Internal Controls over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  Limitations
    Use
    of Proceeds
  No. 333-135913)
   147




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Audit
    Committee Financial Expert
  Form 20-F.
  Principal
    Accountant Fees and Services
  Audit Fees.
  Audit-Related Fees.
  Tax Fees.
  All Other Fees.
    Code
    of Ethics
  Form 20-F.
  Exemption
    from the Listing Standards for Audit Committee
  Rule 10A-3(b)(1)(iv)(C) rule 10A-3.
  Material
    Contracts
   148




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GLOSSARY
  ADSs
    
    American Depositary Shares. ADSs are securities issued by a
    depositary that represent ownership interests in underlying
    ordinary shares held by the depositarys custodian. ADSs
    may be evidenced by American Depositary Receipts (ADRs). Each
    Qimonda AG ADS represents one ordinary share.Advanced Memory Buffer (AMB)
    
    A logic chip that enables high speed communication between the
    memory controller and a fully buffered DIMM in a server system.back-end
    
    The packaging, assembly and testing stages of the semiconductor
    manufacturing process, which take place after electronic
    circuits are imprinted on silicon wafers in the front-end
    process.bit
    
    A unit of information; a computational quantity (binary pulse)
    that can take one of two values, such as true and false or 0 and
    1; also the smallest unit of storage sufficient to hold one bit.byte
    
    A unit of measurement equal to eight bits.Computer Aided Design (CAD)
    
    A designation of software tools used in the design of integrated
    circuits.capacitor
    
    An electronic device that stores electrical charges. Capacitors
    are used to store information in a DRAM chip.cell
    
    A primary unit that normally repeats many times in an integrated
    circuit. Cells represent individual functional design units or
    circuits that may be reused as blocks in designs. For example, a
    memory cell represents a storage unit in a memory array.chip
    
    Popular term describing a section of a wafer that contains a
    discrete component or an integrated circuit. Also called a
    die.circuit
    
    A combination of electrical or electronic components,
    interconnected to perform one or more functions.clean room
    
    An area within a fab in which the wafer fabrication takes place.
    The classification of a clean room relates to the maximum number
    of particles of contaminants per cubic foot within that room.
    For example, a class 100 clean room contains fewer than 100
    particles of contaminants per cubic foot.DDR SDRAM
    
    Double Data Rate SDRAM. A form of DRAM chip that activates
    output on both the rising and falling edge of the system clock
    rather than on just the rising edge, potentially doubling output.DDR2 SDRAM
    
    Double Data Rate 2 SDRAM is an enhanced form of DDR SDRAM that
    offers higher data transfer rates compared to its predecessor.DDR3 SDRAM
    
    Double Data Rate 3 SDRAM. Successor to DDR2 SDRAM currently in
    advanced stages of development.Die
    
    A chip.Dual Inline Memory Module (DIMM)
    
    A type of printed circuit board composed of DRAM chips mounted
    on a circuit board in a particular configuration. 149




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##### Table of Contents



Dynamic Random Access Memory (DRAM)
    
    The most common type of random access memory. Each bit of
    information is stored as an amount of electrical charge in a
    storage cell consisting of a capacitor and a transistor. The
    capacitor discharges gradually due to leakage and the memory
    cell loses the information stored. To preserve the information,
    the memory has to be refreshed periodically and is therefore
    referred to as dynamic. DRAM is the most widespread
    memory technology because of its high memory density and
    relatively low price.fab
    
    A semiconductor fabrication facility, in which the front-end
    manufacturing process takes place.feature size
    
    A measurement (generally in micron or nm) of the width of the
    smallest patterned feature or circuit on a semiconductor chip.flash memory
    
    A type of non-volatile memory that can be erased and
    reprogrammed.front-end
    
    The wafer processing stage of the semiconductor manufacturing
    process, in which electronic circuits are imprinted onto raw
    silicon wafers. This is followed by the packaging, assembly and
    testing stages, which comprise the back-end process.foundry
    
    A semiconductor manufacturer that makes chips for third parties.gigabit (Gb)
    
    Approximately one billion bits (1,073,741,824 bits). Generally
    used to indicate the storage capacity (or density) of memory
    chips.gigabyte (GB)
    
    Approximately one billion bytes (1,073,741,824 bytes). Generally
    used to indicate the storage capacity (or density) of memory
    modules.Integrated Circuit (IC)
    
    An electronic circuit in which all elements of the circuit are
    integrated on a single semiconductor device.ISO
    
    International Standards Organization. The international
    organization responsible for developing and maintaining
    worldwide standards for manufacturing, environmental protection,
    computers, data communications and many other fields.library
    
    The collection of representations required by various design
    tools. The representations, such as symbol, simulation model,
    layout abstract, and transistor schematic, are used by different
    tools in the design system to create or analyze some portion of
    an IC or otherwise aid in the design process. Creating a design
    library requires inserting the fabrication technologies in the
    design system in a form that allows designers to create circuits
    in the most efficient manner.logic
    
    One of the three major classes of integrated circuits (along
    with processors and memory). Logic ICs are used for data
    manipulation and control functions.mask
    
    A transparent glass or quartz plate covered with an array of
    patterns used in the IC manufacturing process to create
    circuitry patterns on a wafer. Each pattern consists of opaque
    and transparent areas that define the size and shape of all
    circuit and device elements. The mask is used to expose selected
    areas, and defines the areas to be processed. Masks may use
    emulsion, chrome, iron oxide, silicon or other material to
    produce the opaque areas. 150




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##### Table of Contents



megabit (Mb)
    
    Approximately one million bits (1,048,576 bits). Generally used
    to indicate the storage capacity (or density) of memory chips.megabyte (MB)
    
    Approximately one billion bytes (1,048,576 bytes). Generally
    used to indicate the storage capacity (or density) of memory
    modules.memory semiconductors
    
    Semiconductors that store data in digital form.NAND flash
    
    A type of flash memory commonly used for mass storage
    applications such as digital audio players and digital cameras.nanometer (nm)
    
    A metric unit of linear measure that equals one billionth of a
    meter (or 1/1,000th of a micron). This unit of measurement is
    commonly used to indicate the width of the smallest patterned
    feature or circuit on a semiconductor chip (the so-called
    feature size).non-volatile memory
    
    A type of semiconductor memory that retains data even when
    electrical power is shut off.NOR flash
    
    A type of flash memory commonly used for the storage of code
    data, such as the software instructions in a mobile phone.NROM Flash
    
    Nitrided Read Only Memory. A flash technology that can store two
    bits per cell. Charges are locally separated on both ends of the
    memory transistor cell. This compares with other non-volatile
    technologies like floating gate technology, which store one or
    two bits by different charge amounts spread over the whole
    transistor cell.OEM
    
    Original Equipment Manufacturer. A company that acquires a
    product or component and reuses or incorporates it into a new
    product with its own brand name.package
    
    The protective container of an electronic component or die, with
    external terminals to provide electrical access to the
    components inside.photolithography
    
    A step in the front-end process of semiconductor manufacturing
    in which a form of ultraviolet light is used to draw a pattern
    of an IC on a silicon wafer. The sophistication of this process
    and the related equipment determines the achievable feature
    sizes on memory chips, and therefore is a key determinant in the
    ability of manufacturers continuously to improve the capacity
    (or density) of memory ICs.process technology
    
    The procedures used in the front-end process to convert raw
    silicon wafers into finished wafers containing hundreds or
    thousands of chips.Random Access Memory (RAM)
    
    A type of digital memory that functions as the main workspace of
    a computer. The order of access to bits at different locations
    does not affect the speed of access (and is therefore
    random). This is in contrast to, for example, a
    magnetic or optical disk or magnetic tape, which are used for
    long-term storage of data on a computer, but which are too slow
    to be used for primary workspace.photoresist
    
    A photoactive chemical that is used in the photolithography
    process, in which the design of an integrated circuit is drawn
    on a silicon wafer.semiconductor
    
    Generic name for devices, such as transistors and integrated
    circuits that control the flow of electrical signals. More
    generally, a material, typically crystalline, that can be
    altered to allow electrical current to 151




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flow or not flow in a pattern. The most common semiconductor
    material for use in integrated circuits is silicon.server
    
    A computer that provides a service for other computers connected
    to it via a network. The most common example is a file server,
    which has a local disk and services requests from remote clients
    to read and write files on that disk.silicon
    
    A type of semiconducting material used to make a wafer. Silicon
    is widely used in the semiconductor industry as a base material.Static Random Access Memory (SRAM)
    
    A type of volatile memory product that is used in electronic
    systems to store data and program instructions. Unlike the more
    common DRAM, it does not need to be electronically refreshed
    (and is therefore static).Synchronous DRAM (SDRAM)
    
    A generic name for various kinds of DRAM that are synchronized
    with the clock speed for which the microprocessor is optimized.
    This tends to increase the number of instructions that the
    processor can perform in a given time.transistor
    
    An individual circuit that can amplify or switch electric
    current. This is the building block of all integrated circuits.volatile memory
    
    A type of semiconductor memory that loses stored information if
    the power source is removed.wafer
    
    A disk made of a semiconducting material such as silicon,
    currently usually either 200mm or 300mm in diameter, used to
    form the substrate of a chip. A finished wafer may contain
    several thousand chips.yield
    
    The percentage of usable dies produced on a silicon wafer in the
    front-end process.USB
    
    Universal Serial Bus. A protocol for transferring data to and
    from digital devices.USB drive
    
    A portable data storage device based on flash memory that uses
    USB interface protocol. 152




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##### Table of Contents



QIMONDA
    AG AND SUBSIDIARIES
 INDEX TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
  PageQimonda AG and SubsidiariesReport of Independent Registered Public
    Accounting Firm


F-2Combined and Consolidated Statements of
    Operations
    for the years ended September 30, 2005, 2006 and 2007


F-3Consolidated Balance Sheets as of
    September 30, 2006 and 2007


F-4Combined and Consolidated Statements of
    Business/Shareholders Equity
    for the years ended September 30, 2005, 2006 and 2007


F-5Combined and Consolidated Statements of Cash
    Flows
    for the years ended September 30, 2005, 2006 and 2007


F-6Notes to the Combined and Consolidated Financial
    Statements


F-7    Rule 3-09 Regulation S-X, Form 20-F/A
   
    Report of Independent Registered Public Accounting Firm.
    Consolidated Statements of Operations for the years ended
    December 31, 2005 and 2006.
    Consolidated Balance Sheets as of December 31, 2005 and
    2006.
    Consolidated Statements of Shareholders Equity for the
    years ended December 31, 2005 and 2006.
    Consolidated Statements of Cash Flows for the years ended
    December 31, 2005 and 2006.
    Notes to the Consolidated Financial Statements.   Form 20-F
   
    Report of Independent Registered Public Accounting Firm.
    Consolidated Statements of Operations for the years ended
    December 31, 2004 and 2005.
    Consolidated Balance Sheets as of December 31, 2004 and
    2005.
    Consolidated Statements of Shareholders Equity for the
    years ended December 31, 2004 and 2005.
    Consolidated Statements of Cash Flows for the years ended
    December 31, 2004 and 2005.
    Notes to the Consolidated Financial Statements.   F-1




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
                   F-2




---



##### Table of Contents



Qimonda
    AG and Subsidiaries
  Combined and Consolidated Statements of Operations
 for the years ended September 30, 2005, 2006 and 2007
 (in millions, except for share data)
  Notes


2005


2006


2007


2007()


()


()


($)(unaudited)Net sales:Third parties


5



2,821



3,798



3,608



5,130Related parties


27



4



17







Total net sales


32



2,825



3,815



3,608



5,130Cost of goods sold






(2,164
)


(3,048
)


(3,390
)


(4,820
)Gross profit






661



767



218



310Research and development expenses






(390
)


(433
)


(401
)


(570
)Selling, general and administrative expenses






(206
)


(215
)


(199
)


(283
)Restructuring charges


8



(1
)










Other operating (expenses) income, net


7



(13
)


(60
)


18



26Operating income (loss)






51



59



(364
)


(517
)Interest (expense) income, net






(7
)


(25
)


7



10Equity in earnings of associated companies


16



45



80



117



166Gain on associated company share issuance


16







72







Other non-operating income, net






13



8



7



10Minority interests






2



(6
)


(6
)


(9
)Income (loss) before income taxes






104



188



(239
)


(340
)Income tax expense


9



(86
)


(114
)


(10
)


(14
)Net income (loss)






18



74



(249
)


(354
)Basic and diluted earnings (loss) per share


10



0.06



0.24



(0.73
)


(1.03
)    F-3




---



##### Table of Contents



Qimonda
    AG and Subsidiaries
  Consolidated Balance Sheets
 September 30,
    2006 and 2007
  Notes


2006


2007


2007( millions)


( millions)


($ millions)(unaudited)Assets:Current assets:Cash and cash equivalents






932



746



1,061Marketable securities


11



138



265



377Trade accounts receivable, net


12



803



341



485Inventories


13



622



619



880Deferred income taxes


9



47



32



46Other current assets


14



265



254



361Total current assets






2,807



2,257



3,210Property, plant and equipment


15



2,080



2,186



3,107Long-term investments


16



636



628



893Deferred income taxes


9



160



147



209Other assets


17



178



163



232Total assets






5,861



5,381



7,651Liabilities and shareholders equity:Current liabilities:Short-term debt and current maturities


21



344



77



109Trade accounts payable


18



712



756



1,075Accrued liabilities


19



160



147



209Deferred income taxes


9



18



5



7Other current liabilities


20



245



259



368Total current liabilities






1,479



1,244



1,768Long-term debt


21



151



227



323Deferred income taxes


9



36



23



33Other liabilities


22



324



370



526Total liabilities






1,990



1,864



2,650Shareholders equity:Ordinary share capital


23



684



684



973Additional paid-in capital






3,097



3,117



4,432Retained earnings (accumulated deficit)






224



(25
)


(36
)Accumulated other comprehensive loss


25



(134
)


(259
)


(368
)Total shareholders equity






3,871



3,517



5,001Total liabilities and shareholders equity






5,861



5,381



7,651    F-4




---



##### Table of Contents



Qimonda
    AG and Subsidiaries
  Combined and Consolidated Statements of
    Business/Shareholders Equity
 for the years ended September 30, 2005, 2006 and 2007
  AccumulatedAdditional





Investments by


otherIssued Ordinary shares


Paid-In


Retained


and advances


comprehensiveNotes


Shares


Amount


Capital


earnings


from Infineon


(loss) income


Total(millions)


( millions)


( millions)


( millions)


( millions)


( millions)


( millions)Balance as of October 1, 2004






















2,890



(111
)


2,779Transfer of DD200 facility to Infineon


4



















(374
)






(374
)Net investments by and advances from Infineon






















500







500Net income






















18







18Other comprehensive income


25























44



44Balance as of September 30, 2005






















3,034



(67
)


2,967Transfer of development center to Infineon


26



















(10
)






(10
)Net investments by and advances from Infineon prior to
    May 1, 2006






















493







493Net loss prior to May 1, 2006






















(150
)






(150
)Contribution to capital and issuance of shares on initial
    formation as of May 1, 2006


1



300



600



2,772







(3,372
)






Transfer of net pension liability from Infineon


28











(9
)














(9
)Issuance of shares upon initial public offering, net of offering
    costs and tax benefit thereon


1



42



84



331















415Stock-based compensation


24











3







5







8Net income after May 1, 2006


















224











224Other comprehensive loss


25























(67
)


(67
)Balance as of September 30, 2006






342



684



3,097



224







(134
)


3,871Contribution by Infineon


1











14















14Net loss


















(249
)










(249
)Stock-based compensation


24











6















6Other comprehensive loss


25























(128
)


(128
)Adoption of SFAS No. 158, net of tax


25,28























3



3Balance as of September 30, 2007






342



684



3,117



(25
)






(259
)


3,517    F-5




---



##### Table of Contents



Qimonda
    AG and Subsidiaries
  Combined and Consolidated Statements of
    Cash Flows
 for the
    years ended September 30, 2005, 2006 and 2007
  Notes


2005


2006


2007


2007( millions)


( millions)


( millions)


($ millions)(unaudited)Net income (loss)






18



74



(249
)


(354
)Adjustments to reconcile net income (loss) to cash provided by
    operating activities:Depreciation and amortization


15/17



528



703



666



946Provision for (recovery of) doubtful accounts


12



4



3



(5
)


(7
)Gain on sales of business interests


16











(2
)


(3
)Gain on sales of long-term assets


15







(1
)


(3
)


(4
)Equity in earnings of associated companies


16



(45
)


(80
)


(117
)


(166
)Dividends received from associated companies


16



1



29



61



87Gain on associate company share issuance


16







(72
)






Stock-based compensation


24







8



6



9Minority interests






(2
)


6



6



9Impairment charges


7/16



6



9







Deferred income taxes


9



52



23



16



23Due to changes in operating assets and liabilities:Trade accounts receivable


12



45



(378
)


440



626Inventories


13



(172
)


(147
)


(17
)


(23
)Other current assets


14



7



(75
)


76



108Trade accounts payable


18



47



162



61



87Accrued liabilities


19



(58
)


68



(16
)


(24
)Other current liabilities


20



(35
)


63



3



4Other assets and liabilities






88



(69
)


54



77Net cash provided by operating activities






484



326



980



1,395Cash flows from investing activities:Purchases of marketable securities available for sale










(175
)


(149
)


(212
)Proceeds from sales of marketable securities available for sale






1



37



16



23Purchases of business interests


16



(83
)


(3
)


(1
)


(1
)Proceeds from disposal of business interests


16



14







27



38Purchases of intangible assets


17



(4
)


(42
)


(25
)


(36
)Purchases of property, plant and equipment


15



(926
)


(686
)


(879
)


(1,250
)Proceeds from sales of long-term assets


15



26



68



164



233Net cash used in investing activities






(972
)


(801
)


(847
)


(1,205
)Cash flows from financing activities:Increase (decrease) in short-term debt due Infineon


21



481



(163
)


(344
)


(489
)Increase in short-term debt due third parties


21











31



44Repayments of short-term debt due third parties


21



(18
)










Increase in financial payables due related parties


27



(7
)


(2
)


(6
)


(9
)Decrease in financial receivables from associated and related
    parties


27



3











Proceeds from issuance of long-term debt


21



80



44







Principal repayments of long-term debt


21



(522
)










Net proceeds from issuance of ordinary shares


1







415







Dividend payments to minority interest










(5
)


(6
)


(9
)Proceeds from issuance of shares to minority interest






21







4



6Investments by and advances from Infineon


26



500



484



14



20Net cash provided by financing activities






538



773



(307
)


(437
)Effect of foreign exchange rate changes on cash and cash
    equivalents






5



2



(12
)


(17
)Net increase (decrease) in cash and cash equivalents






55



300



(186
)


(264
)Cash and cash equivalents at beginning of year






577



632



932



1,325Cash and cash equivalents at end of year






632



932



746



1,061    F-6




---



##### Table of Contents



QIMONDA
    AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial Statements
   1.
    Description
    of Business, Formation and Basis of Presentation  Description
    of Business
    Formation
          Basis
    of Presentation
       F-7




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Handelsgesetzbuch
      Statements
    of Operations
             F-8




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
               Seven MonthsEnded2005


April 30, 2006Cost of goods sold


168



111Research and development expenses


27



17Selling, general and administrative expenses


109



75Restructuring charges


1



305



203       Balance
    Sheets
   F-9




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
       Trade
    Accounts Payable
    Other
    Current and Accrued Liabilities
    Pension
    Liabilities
    Investments
    by and Advances from Infineon
    Capital
    Structure
     F-10




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
                      Estimates
   F-11




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2.
    Summary
    of Significant Accounting Policies    Basis
    of Consolidation
  Consolidation of Variable Interest Entities
      Consolidated


Associated


RelatedSubsidiaries


Companies


Companies


TotalSeptember 30, 2006


22



5



5



32Additions


6











6Disposals






(2
)






(2
)September 30, 2007


28



3



5



36   Reporting
    and Foreign Currency
     F-12




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
       Exchange Rate


Annual AverageSeptember 30,


Exchange RateCurrency







2006


2007


2006


2007euro


euro


euro


euroU.S. dollar

1$




=



0.7899



0.7052



0.8117



0.7497New Taiwan dollar


100NTD



=



2.3866



2.1481



2.4823



2.2743Chinese Yuan Renminbi


100CNY



=



9.9934



9.3844



10.1172



9.7269   Revenue
    Recognition
  Sales
  Revenue Recognition case-by-case
  License
    Income
  00-21, Revenue Arrangements with Multiple
    Deliverables
  Grants
  Investitionszulage Investitionszuschüsse
 F-13




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Product-related
    Expenses
    Income
    Taxes
  Accounting
    for Income Taxes.
  Stock-based
    Compensation
  Share Based Payment Accounting for Stock Issued to
    Employees Accounting for Stock-Based
    Compensation Accounting for Stock-Based Compensation 
    Transition and Disclosure, an Amendment of FASB Statement
    No. 123.
    Issuance
    of shares by Subsidiaries or Associated Companies
  Accounting for Sales of Stock by a
    Subsidiary
  Cash
    and Cash Equivalents
    Marketable
    Securities
   F-14




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     Inventories
    Property,
    Plant and Equipment
    YearsBuildings


10-25Technical equipment and machinery


3-10Other plant and office equipment


1-10   Leases
  Accounting for Leases
  Intangible
    Assets
  Business Combinations.
  Goodwill and Other Intangible Assets
 F-15




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Impairment
    of Long-lived Assets
    Long-term
    Investments
    Financial
    Instruments
  Accounting for
    Derivative Instruments and Hedging Activities
  Pension
    Plans
  projected-unit-credit Employers Accounting for Pensions.
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    88, 106, and 132(R)
   F-16




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
         Recent
    Accounting Pronouncements
  Adopted
    in the year ended September 30, 2007
    Considering the Effects of Prior Year Misstatements
    when Quantifying Misstatements in Current Year Financial
    Statements
  Issued
    but principally applicable in future financial years
  Accounting for Uncertainty in Income Taxes 
    an interpretation of FASB Statement No. 109
 F-17




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Fair Value Measurements
    The Fair Value Option for Financial Assets and
    Financial Liabilities  including an amendment of FASB
    Statement No. 115 instrument-by-instrument
  3.
    Acquisitions  ® ®
 F-18




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005Acquisition Date


January 2005Cash


1Other current assets


16Property, plant and equipment


4Intangible assets  core technology


58Goodwill


7Other non-current assets


3Total assets acquired


89Current liabilities


(45
)Non-current liabilities (including debt)


(2
)Total liabilities assumed


(47
)Net assets acquired


42Cash paid (Purchase consideration)


     4.
    Divestitures      5.
    License
    Income   F-19




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
         6.
    Grants    2005


2006


2007Included in the combined and consolidated statements of
    operations:Research and development expenses


16



17



24Cost of goods sold


94



95



72Other operating income










4Total


110



112



100Construction grants deducted from the cost of fixed assets
    (note 26)






49



1Deferred government grants at September 30 (notes 20 and 22)


208



179



146Grants receivable at September 30 (note 14 and 17)


78



118



80  F-20




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   7.
    Other
    Operating (Expense) Income, net    2005


2006


2007Litigation settlement charges, net of recoveries (note 31)


(20
)


(54
)


9Impairment charges (note 3)






(9
)


Insurance claim










2Other, net


7



3



7Total


(13
)


(60
)


18     8.
    Restructuring        9.
    Income
    Taxes    2005


2006


2007Germany


41



22



(219
)Foreign


61



172



(14
)Total


102



194



(233
)  F-21




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005


2006


2007Continuing operations:Current taxes:Germany


27



63



(10
)Foreign


6



28



4Subtotal


33



91



(6
)Deferred taxes:Germany


46



21



48Foreign


7



2



(32
)Subtotal


53



23



16Income tax expense


86



114



10Other comprehensive (income) loss (note 25)


(1
)


(1
)


4         2005


2006


2007Expected expense (benefit) for income taxes


40



75



(91
)Decrease (increase) in available tax credits


11



2



(28
)Non-taxable investment income


(21
)


(50
)


(24
)Foreign tax rate differential


(8
)


(38
)


(43
)Non deductible expenses and other provisions


3



5



4Increase in valuation allowance


14



11



168Change in German tax rate










25Losses not available to Qimonda due to Formation


43



114



Other


4



(5
)


(1
)Actual expense for income taxes


86



114



10    F-22




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
       2006


2007Deferred tax assets:Trade accounts receivable


16



45Property, plant and equipment


71



63Intangible assets


79



49Remaining assets


7



22Accrued liabilities


31



18Deferred income


65



44Remaining liabilities


15



10Net operating loss and tax credit carry-forwards


32



187Gross deferred tax assets


316



438Valuation allowance


(70
)


(204
)Deferred tax assets


246



234Deferred tax liabilities:Trade accounts receivable


(12
)


(17
)Inventories


(3
)


Property, plant and equipment


(44
)


(41
)Long-term investments


(3
)


(3
)Accrued liabilities


(15
)


(3
)Remaining assets and liabilities


(16
)


(19
)Deferred tax liabilities


(93
)


(83
)Deferred tax assets, net


153



151     2006


2007Deferred tax assets:Current


47



32Non-current


160



147Deferred tax liabilities:Current


(18
)


(5
)Non-current


(36
)


(23
)Deferred tax assets, net


153



151    F-23




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
           2006


2007Balance, beginning of the year


59



70Increase applicable to continuing operations


11



168Decrease due to change in German tax rate






(34
)Balance, end of the year


70



204     10.
    Earnings
    (Loss) Per Share       F-24




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
       2005


2006


2007Numerator Income (loss) available to ordinary shareholders, basic and
    diluted


18



74



(249
)Denominator Weighted-average shares outstanding, basic and diluted


300,000,000



305,983,562



342,000,000Earnings (loss) per share (in euro):Basic and diluted


0.06



0.24



(0.73
)   11.
    Marketable
    Securities    2006


2007Fair


Unrealized


Unrealized





Fair


Unrealized


UnrealizedCost


Value


Gain


Loss


Cost


Value


Gain


LossForeign government
    securities


1



1











1



1







Other debt securities


2



3



1







137



135



1



(3
)Fixed term deposits


139



138







(1
)


138



134







(4
)Total debt securities


142



142



1



(1
)


276



270



1



(7
)Equity securities


















1



1







Total marketable securities


142



142



1



(1
)


277



271



1



(7
)Reflected as follows Current assets


139



138







(1
)


272



265







(7
)Non-current assets (note 17)


3



4



1







5



6



1



Total marketable securities


142



142



1



(1
)


277



271



1



(7
)       Cost


Fair ValueWithin 1 year






after 1 year through 5 years


129



125after 5 years through 10 years


10



10Securities with no stated maturity date


137



135Total


276



270    F-25




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   12.
    Trade
    Accounts Receivable, net    2006


2007Third party  trade


764



333Infineon group  trade (note 27)


61



11Associated and Related Companies  trade (note 27)






3Trade accounts receivable, gross


825



347Allowance for doubtful accounts


(22
)


(6
)Trade accounts receivable, net


803



341     2006


2007Allowance for doubtful accounts, beginning of year


(19
)


(22
)Provision for bad debt, net of recoveries


(3
)


16Allowance for doubtful accounts, end of year


(22
)


(6
)   13.
    Inventories    2006


2007Raw materials and supplies


54



63Work-in-process


432



311Finished goods


136



245Total inventories


622



619   14.
    Other
    Current Assets    2006


2007VAT and other tax receivables


97



87Grants receivable (note 6)


105



80Third party  financial and other receivables


24



34Financial instruments (note 29)


6



23Prepaid expenses


14



12License fees receivable


14



10Employee receivables (note 27)


2



3Associated and Related Companies  financial and other
    receivables (note 27)






2Other


3



3Total other current assets


265



254  F-26




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   15.
    Property,
    Plant and Equipment, net    Technical


Other PlantLand and


Equipment


and Office


ConstructionBuildings


and Machinery


Equipment


in Progress


TotalCostSeptember 30, 2006


805



3,795



821



82



5,503Additions


9



327



47



509



892Disposals


(1
)


(26
)


(58
)






(85
)Reclassifications


9



329



6



(344
)


Transfers from (to) Infineon, net






(7
)


1







(6
)Foreign currency effects


(53
)


(218
)


(18
)


(9
)


(298
)September 30, 2007


769



4,200



799



238



6,006Accumulated depreciationSeptember 30, 2006


(274
)


(2,430
)


(719
)






(3,423
)Depreciation


(69
)


(509
)


(71
)






(649
)Disposals






25



57







82Reclassifications






(4
)


4







Transfers to (from) Infineon, net






6











6Foreign currency effects


17



132



15







164September 30, 2007


(326
)


(2,780
)


(714
)






(3,820
)Book valueSeptember 30, 2006


531



1,365



102



82



2,080Book valueSeptember 30, 2007


443



1,420



85



238



2,186     TotalBook value


128Deferred gain


(77
)Book value, net of deferred gain


51  F-27




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   16.
    Long-term
    Investments    Investment in


Investment inAssociated


RelatedCompanies


Companies


TotalBalance at October 1, 2005


543



1



544Additions


3







3Dividends received


(29
)






(29
)Capitalized interest amortization


(1
)






(1
)Equity in earnings of associated companies


80







80Gain on associated company share issuance


72







72Reclassification


9







9Foreign currency effects


(42
)






(42
)Balance at September 30, 2006


635



1



636Additions






1



1Dividends received


(61
)






(61
)Capitalized interest amortization


(1
)






(1
)Equity in earnings of associated companies


117







117Reclassification


(12
)






(12
)Disposal


(25
)






(25
)Foreign currency effects


(27
)






(27
)Balance at September 30, 2007


626



2



628       Direct andIndirectName of the Associated Company

OwnershipInotera


35.6
%AMTC


33.3
%BAC


33.3
%    F-28




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
             lock-up
   F-29




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
                 2005


2006


2007Sales


475



909



1,129Gross profit


154



320



385Net income


90



224



277   2006


2007Current assets


1,123



714Non-current assets


1,823



2,805Current liabilities


(518
)


(661
)Non-current liabilities


(645
)


(1,130
)Shareholders equity


1,783



1,728  F-30




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   17.
    Other
    Assets    2006


2007Intangible assets, net


143



143Employee deferred compensation asset (note 27)


5



5Prepaid expenses


1



Marketable securities (note 11)


4



6Grants receivable (note 6)


13



License fees receivable


11



7Other


1



2Total


178



163     OtherGoodwill


Intangibles


TotalCostSeptember 30, 2005


88



77



165Additions






45



45Impairment charges (note 7)






(7
)


(7
)Disposals and reductions


(11
)


(26
)


(37
)Foreign currency effects


(5
)






(5
)September 30, 2006


72



89



161Additions






26



26Disposals and reductions






(1
)


(1
)Foreign currency effects


(8
)


(1
)


(9
)September 30, 2007


64



113



177Accumulated amortizationSeptember 30, 2005






(8
)


(8
)Amortization






(12
)


(12
)Disposals and reductions






5



5Foreign currency effects






(3
)


(3
)September 30, 2006






(18
)


(18
)Amortization






(17
)


(17
)Disposals and reductions






1



1Foreign currency effects










September 30, 2007






(34
)


(34
)Intangible assets, net as of September 30, 2006


72



71



143Intangible assets, net as of September 30, 2007


64



79



143    F-31




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
          F-32




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   18.
    Trade
    Accounts Payable    2006


2007Third party  trade


565



601Infineon group  trade (note 27)


71



56Associated and Related Companies  trade (note 27)


76



99Total


712



756   19.
    Accrued
    Liabilities    2006


2007Personnel costs


95



97Settlement for antitrust related matters (note 31)


53



38Warranties


1



3Other


11



9Total


160



147       2006


2007Balance beginning of year


1



1Accrued during the year, net


3



3Settled during the year


(3
)


(1
)Balance end of year


1



3  F-33




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   20.
    Other
    Current Liabilities    2006


2007Deferred income


20



88Deferred government grants (note 6)


74



49Payroll obligations to employees


31



35VAT and other taxes payable


72



26Settlement for anti-trust related matters  payable to
    Infineon (notes 19 and 31)


24



22Credit balances in trade accounts receivables






20Licenses payable


13



13Financial instruments (note 29)


2



4Pension liabilities (note 28)






1Infineon group  financial and other (note 27)


9



Other






1Total


245



259   21.
    Debt    2006


2007Short-term debt:Loans from Infineon (note 27)


344



Notes payable to banks, rate 6,09%






28Current portion of long term debt, rate 4,25%






21Capital lease obligation






28Total short-term debt


344



77Long-term debt:Unsecured term bank loan, rate 4,25%, due 2013


124



103Notes payable to governmental entity, rate 5,06%, due 2027


27



24Capital Lease obligation






100Total long-term debt


151



227          F-34




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
         Year Ending September 30,

Amount2008


772009


512010


542011


572012


21Thereafter


44Total debt


304   22.
    Other
    Liabilities    2006


2007Deferred government grants (note 6)


105



97Minority interest


79



83Deferred income


9



83Settlement for antitrust related matters  payable to
    Infineon (notes 19 and 31)


64



41Licenses payable


37



27Pension liabilities (note 28)


26



24Asset retirement obligation






10Other


4



5Total


324



370      F-35




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     23.
    Ordinary
    Share Capital          Namensaktien
  Authorized
    and Conditional Share Capital
  Aktiengesetz
     F-36




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
           Dividends
  Aktiengesetz Bilanzgewinn Bilanzverlust
  24.
    Stock-based
    Compensation  Infineon
    Stock Option Plans
    Fair
    value disclosures of Infineon Stock Option Plans
     F-37




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005


2006


2007Weighted-average assumptions:Risk-free interest rate


3.03
%


3.08
%


Expected volatility


58
%


43
%


Expected life in years


4.50



5.07



Weighted-average fair value per option at grant date in euro


4.06



3.19



   Qimonda
    Stock Option Plan
               F-38




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
         Weighted-averageNumber of


Weighted-


remaining


AggregatedOptions in


average


contractual life


intrinsicmillion


exercise price


(in years)


valueOutstanding at beginning of period














Granted


1.9


$
15.97



6.00


$
0.00Exercised














Forfeited and expired














Outstanding at end of period


1.9


$
15.97



5.16


$
0.00Vested during the period














Expected to ultimately vest at end of period


1.7


$
15.97



5.16


$
0.00Exercisable at end of period














     Weighted-Weighted


averageNumber of


average


remaining


AggregatedOptions in


grant date


contractual life


intrinsicmillion


fair value


(in years)


valueUnvested at beginning of period










Granted


1.9


$
4.23



6.00


$
0.00Vested














Forfeited














Unvested at end of period


1.9


$
4.23



5.16


$
0.00Unvested options expected to vest


1.7


$
4.23



5.16


$
0.00   Fair
    value disclosures of Qimonda Stock Option Plan
     F-39




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
       2005


2006


2007Weighted-average assumptions:Risk-free interest rate










4.62
%Expected volatility, underlying ADS










45
%Expected volatility, SOX Index










29
%Forfeiture rate, per year










3.40
%Dividend yield










0
%Expected life in years










4.62Weighted-average fair value per option at grant date









$
4.23   Stock-Based
    Compensation Expense
    2005


2006


2007Compensation expense recognized:Cost of sales






3



2Selling, general and administrative expenses






3



2Research and development expense






2



2Total stock-based compensation expense






8



6Related to:Infineon Stock Options:






8



4Qimonda Stock Options:










2      F-40




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Accounting for Stock-Based
    Compensation  Transition and Disclosure an amendment
    of SFAS No. 123
  2005Net (loss) income:As reported


18Less: Total stock-based employee compensation expense determined
    under fair
    value based method for all awards, net of related tax effects


(9
)Pro forma


9Basic and diluted earnings (loss) per share:As reported in euro


0.06Pro forma in euro


0.03   25.
    Accumulated
    Other Comprehensive Loss    2005


2006


2007Tax








Tax








TaxPretax


Effect


Net


Pretax


Effect


Net


Pretax


Effect


NetAccumulated other comprehensive (loss) income 
    beginning of year


(111
)






(111
)


(68
)


1



(67
)


(136
)


2



(134
)Other comprehensive (loss) income:* Unrealized losses on securities, net (note 11)


























(6
)






(6
)* Additional minimum pension liability


(2
)


1



(1
)


(2
)


1



(1
)


4



(2
)


2* Foreign currency translation adjustment


45







45



(66
)






(66
)


(124
)






(124
)Other comprehensive income (loss)


43



1



44



(68
)


1



(67
)


(126
)


(2
)


(128
)Adoption of SFAS No. 158 (note)* Pension net actuarial gain (loss)


























9



(3
)


6* Pension net prior service credit (cost)


























(4
)


1



(3
)Accumulated other comprehensive (loss) income  end of
    year


(68
)


1



(67
)


(136
)


2



(134
)


(257
)


(2
)


(259
)Thereof:* Unrealized losses on securities, net (note 11)


























(6
)






(6
)* Additional minimum pension liability


(2
)


1



(1
)


(4
)


2



(2
)










* Foreign currency translation adjustment


(66
)






(66
)


(132
)






(132
)


(256
)






(256
)* Pension net actuarial gain (loss)


























9



(3
)


6* Pension net prior service credit (cost)


























(4
)


1



(3
)  F-41




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005


2006


2007Net income (loss)


18



74



(249
)Other comprehensive income (loss)


44



(67
)


(128
)Total comprehensive income (loss)


62



7



(377
)   26.
    Supplemental
    Cash Flow Information  2005


2006


2007Cash paid for:Interest to Infineon






38



12Interest to third parties


22



5



7Income taxes


36



52



54Non-cash investing activities:Construction grants deducted from the cost of fixed assets
    (note 6)






49



1Non-cash financing activities:Distribution to Infineon


(374
)


(19
)


Deferred tax assets retained by Infineon (note 9)


(6
)






Capital lease obligation (note 21)










128             27.
    Related
    Parties  mark-up.
   F-42




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2006


2007Current:Infineon group  trade (note 12)


61



11Associated and Related Companies  trade (note 12)






3Associated and Related Companies  financial and other
    (note 14)






2Employee receivables (note 14)


2



3Total Related Party receivables


63



19       2006


2007Current:Infineon group  trade (note 18)


71



56Associated and Related Companies  trade (note 18)


76



99Infineon group  financial and other (note 20)


9



Total Related Party payables


156



155       2006


2007Short-term debt:Loans from Infineon (note 21)


344



Total Related Party debt


344



  F-43




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005


2006


2007Sales to Related Parties:Siemens group companies


3



17



Associated and Related Companies


1







4



17



Purchases from Related Parties:Siemens group companies


13



4



Infineon group companies


265



403



294Associated and Related Companies


247



438



546525



845



840     2005


2006


2007Interest income from (expense to) Infineon group companies:Interest income from Infineon group companies


40



15



Interest expense to Infineon group companies


(34
)


(38
)


(8
)6



(23
)


(8
)     Five months ended


Year endedSeptember 30, 2006


September 30, 2007Cost of goods sold


9



13Research and development expenses


10



28Selling, general and administrative expenses


14



1533



56      F-44




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     Major
    shareholders
          Dresden
    200mm Facility
     F-45




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
       28.
    Pension
    Plans         F-46




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005


2006


2007Domestic


Foreign


Domestic


Foreign


Domestic


ForeignPlans


Plans


Plans


Plans


Plans


PlansAccumulated benefit obligation end of year


(49
)


(4
)


(41
)


(3
)


(46
)


(3
)Change in projected benefit
    obligationProjected benefit obligations
    beginning of year


(39
)


(5
)


(59
)


(6
)


(53
)


(3
)Service cost


(3
)


(1
)


(6
)






(6
)


Interest cost


(2
)






(3
)






(2
)


Actuarial (losses) gains


(4
)






(2
)


2



15



Disposal of plan


7



















Plan transfer


(14
)






17







(1
)


Plan amendments


(4
)














(4
)


Curtailment gain














1







Projected benefit obligations end of year


(59
)


(6
)


(53
)


(3
)


(51
)


(3
)Change in fair value of plan assets Fair value at beginning
    of year


22



3



31



3



25



2Contributions and transfers


6



















Actual return on plan assets


3







2







2



Plan transfer










(8
)


(1
)






Fair value at end of year


31



3



25



2



27



2Funded status


(28
)


(3
)


(28
)


(1
)


(24
)


(1
)Unrecognized actuarial loss (gain)


4







8



(1
)


(8
)


(1
)Unrecognized prior service cost


















4



Net liability recognized before adopting SFAS No. 158


(24
)


(3
)


(20
)


(2
)


(28
)


(2
)Impact of adopting SFAS no. 158 before tax


















4



1Net liability recognized after adopting SFAS No. 158


















(24
)


(1
)  F-47




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Adoption
    of SFAS No. 158
    Domestic


ForeignPlans


Plans


TotalAccumulated other comprehensive income* actuarial gain (loss) before tax (note 25)


8



1



9* prior service credit (cost) before tax (note 25)


(4
)






(4
)Impact of adopting SFAS No. 158 before tax


4



1



5* Tax effect (note 25)


(2
)






(2
)Impact of adopting SFAS No. 158 after tax


2



1



3Deferred tax liability  non-current (note 9)


2







2Accrued pension liability  non-current (note 22)


4



1



5     2007


Expected 2008Domestic


Foreign


Domestic


ForeignPlans


Plans


Plans


PlansActuarial (gain) loss at beginning of year










(8
)


(1
)Arising during the year














Recognized as component of NPPC during the year










1



Impact of adopting SFAS No. 158 before tax


(8
)


(1
)






Actuarial (gain) loss at end of year


(8
)


(1
)


(7
)


(1
)Prior service cost at beginning of year










4



Arising during the year














Recognized as component of NPPC during the year














Impact of adopting SFAS No. 158 before tax


4











Prior service cost at end of year


4







4



Impact of adopting SFAS No. 158 before tax


(4
)


(1
)  F-48




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005


2006


2007Domestic


Foreign


Domestic


Foreign


Domestic


ForeignPlans


Plans


Plans


Plans


Plans


PlansAccumulated other comprehensive Income Additional Minimum Pension Liability


2







4











Accrued pension liabilities (note 20 and 22)/


(26
)


(3
)


(24
)


(2
)


(24
)


(1
)Net liability recognized


(24
)


(3
)


(20
)


(2
)


(24
)


(1
)     2005


2006


2007Domestic


Foreign


Domestic


Foreign


Domestic


ForeignPlans


Plans


Plans


Plans


Plans


PlansProjected benefit obligation


59



6



53



3



51



3Fair value of plan assets


31



3



25



2



27



2Accumulated benefit obligation


49



4



41



3



46



3Fair value of plan assets


31



3



25



2



27



2     2005


2006


2007Domestic


Foreign


Domestic


Foreign


Domestic


ForeignPlans


Plans


Plans


Plans


Plans


PlansDiscount rate


4.5
%


4.9
%


4.8
%


5.9
%


5.5
%


5.8
%Rate of compensation increase


2.5
%


3.6
%


2.5
%


3.6
%


2.5
%


0.4
%Projected future pension increases


1.3
%


1.7
%


1.8
%


2.3
%


1.8
%


2.2
%Expected return on plan assets


7.3
%


6.4
%


6.5
%


6.6
%


5.9
%


6.4
%     Investment
    strategies
   F-49




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Expected
    long-term rate of return on plan assets
      Plan
    asset allocation
    2006


2007


Targeted AllocationDomestic


Foreign


Domestic


Foreign


Domestic


ForeignPlans


Plans


Plans


Plans


Plans


PlansEquity securities






61
%


46
%


29
%


45
%


Debt securities






39
%


43
%


65
%


52
%


Cash


100
%






11
%






3
%


100
%Other














6
%






Total


100
%


100
%


100
%


100
%


100
%


100
%      F-50




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2005


2006


2007Domestic


Foreign


Domestic


Foreign


Domestic


ForeignPlans


Plans


Plans


Plans


Plans


PlansService cost


(3
)


(1
)


(6
)






(6
)


Interest cost


(2
)






(3
)






(2
)


Expected return on plan assets


2







2







2



Amortization of unrecognized actuarial gains (losses)


















(1
)


Curtailment gain recognized














1







NPPC


(3
)


(1
)


(7
)


1



(7
)


         Domestic


ForeignYears Ending September 30,

Plans


Plans2008


2



2009


1



2010


2



2011


2



2012


2



2013-2017


21



1   Other
    post-retirement benefits
      29.
    Financial
    Instruments   F-51




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     2006


2007Notional


Fair


Notional


FairAmount


Value


Amount


ValueForward contracts sold:U.S. dollar


168



(1
)


475



11Japanese yen


26







2Forward contracts purchased:U.S. dollar


17







72



(1
)Japanese yen


22







70



(2
)Singapore dollar


3







5



Malaysian ringgit


5







17



Other currencies










1



Other


94



5



108



11Fair value, net






4







19     2005


2006


2007Gains (losses) from foreign currency derivatives:Cost of sales


(1
)


(4
)


25Gains (losses) from foreign currency transactions:Cost of sales






(1
)


(35
)Other non-operating income (expense)


18



3



(4
)18



2



(39
)Net gains (losses) from foreign currency derivatives and
    transactions


17



(2
)


(14
)     30.
    Risks   F-52




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
                  F-53




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   31.
    Commitments
    and Contingencies  Contribution
    from Infineon
            
    liabilities arising in connection with intellectual property
    infringement claims relating to memory products are to be borne
    by the Company.
    liabilities arising in connection with actual or alleged
    antitrust violations with respect to DRAM products are to be
    borne by the Company.  Litigation
   F-54




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
              F-55




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
          F-56




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
            F-57




---



##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
         Accruals
    and the potential effect of these lawsuits
       F-58




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
     Contractual
    Commitments
  (1)(2)
  Payments Due to PeriodLess than














AfterTotal


1 Year


1-2 Years


2-3 Years


3-4 Years


4-5 Years


5 YearsContractual commitments:Operating lease
    payments(3)


95



27



25



17



9



8



9Unconditional purchase commitments


787



737



43



5



2







Other long-term commitments


70



64



2



2



1



1



Total Commitments


952



828



70



24



12



9



9     (1)
    Certain payments of obligations or expirations of commitments
    that are based on the achievement of milestones or other events
    that are not date-certain are included for purposes of this
    table based on estimates of the reasonably likely timing of
    payments or expirations in the particular case. Actual outcomes
    could differ from those estimates.(2)
    Product purchase commitments associated with continuing capacity
    reservation agreements are not included in this table, since the
    purchase prices are based, in part, on future market prices, and
    are therefore not accurately quantifiable at September 30,
    2007. Purchases under these arrangements aggregated
    approximately 1,131 for the year ended September 30,
    2007.(3)
    Operating lease payments include amounts paid to Infineon for
    lease payments. Premises currently occupied by the Company that
    are leased by Infineon are expected to be the subject of a
    sublease agreement between Infineon and the Company.       F-59




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
   Other
    Contingencies
  (1)
  Expirations by PeriodLess than














AfterTotal


1 year


1-2 Years


2-3 Years


3-4 Years


4-5 Years


5 YearsMaximum potential future payments:Guarantees


128



19



16



1



9



30



53Contingent government grants


406



107



22



45



166



26



40Total contingencies


534



126



38



46



175



56



93     (1)
    Certain expirations of contingencies that are based on the
    achievement of milestones or other events that are not
    date-certain are included for purposes of this table based on
    estimates of the reasonably likely timing of expirations in the
    particular case. Actual outcomes could differ from those
    estimates.        32.
    Operating
    Segment and Geographic Information  Disclosure about Segments of an Enterprise and Related
    Information.
   F-60




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
           2005


2006


2007Net sales:Germany


232



316



256Rest of Europe


333



482



399North America


1,067



1,591



1,323Asia/Pacific


1,091



1,174



1,182Japan


102



252



448Total


2,825



3,815



3,608   2005


2006


2007Property, plant and equipment:Germany


804



654



684Rest of Europe


175



144



193North America


1,082



1,100



1,093Asia/Pacific


155



182



216Total


2,216



2,080



2,186        F-61




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##### Table of Contents



QIMONDA AG AND SUBSIDIARIES
  Notes to the Combined and Consolidated Financial
    Statements  (Continued)
       2005


2006


2007Net (loss) income


18



74



(249
)Adjust: Income tax expense


86



114



10Interest
    expense, net


7



25



(7
)EBIT


111



213



(246
)     33.
    Subsequent
    Events           F-62




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##### Table of Contents



SIGNATURES
  Form 20-F
  Qimonda AG
  By:
    /s/  Kin
    Wah Loh      By:
    /s/  Dr. Michael
    Majerus




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNo.

Description1(i)


Articles of Association of Qimonda AG, as amended (English
    translation). (incorporated by reference to Exhibit 3(i) of
    Qimonda AGs Registration Statement on
    Form F-3,
    filed with the SEC on September 11, 2007)1(ii)(A)


Rules of Procedure for the Management Board of Qimonda AG, as
    amended (English translation).1(ii)(B)


Rules of Procedure for the Supervisory Board of Qimonda AG, as
    amended (English translation).2


The total amount of long-term debt securities of Qimonda AG
    authorized under any instrument does not exceed 10% of the total
    assets of the group on a consolidated basis. Qimonda AG hereby
    agrees to furnish to the SEC, upon its request, a copy of any
    instrument defining the rights of holders of long-term debt of
    Qimonda AG or of its subsidiaries for which consolidated or
    unconsolidated financial statements are required to be filed.4(i)(A)


Contribution Agreement (Einbringungsvertrag) between
    Infineon Technologies AG and Qimonda AG, dated as of
    April 25, 2006, and addendum thereto, dated as of
    June 2, 2006 (English translation). (incorporated by
    reference to Exhibit 10(i)(A) of Qimonda AGs
    Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006)4(i)(B)


Contribution Agreement (Einbringungsvertrag) between
    Infineon Holding B.V. and Qimonda AG, dated as of May 4,
    2006 (English translation). (incorporated by reference to
    Exhibit 10(i)(B) of Qimonda AGs Registration
    Statement on
    Form F-1,
    as amended, filed with the SEC on
    August 8, 2006)4(i)(C)


Contribution Agreement (Einbringungsvertrag) between
    Infineon Holding B.V. and Qimonda AG, dated as of June 25,
    2007 (English translation). (incorporated by reference to
    Exhibit 10(iii) of Qimonda AGs Registration Statement
    on
    Form F-3,
    filed with the SEC on September 11, 2007)4(i)(D)


Trust Agreement between Infineon Technologies AG and
    Qimonda AG, dated as of April 25, 2006, as amended (English
    translation). (incorporated by reference to Exhibit 4(i)(C)
    of Qimonda AGs
    Form 20-F,
    filed with the SEC on November 21, 2006)4(i)(E)


Master Loan Agreement between Qimonda AG and Infineon
    Technologies Holding B.V., dated April 28, 2006.
    (incorporated by reference to Exhibit 10(i)(D) of Qimonda
    AGs Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006)4(i)(F)


Global Services Agreement between Infineon Technologies AG and
    Qimonda AG, effective May 1, 2006. (incorporated by
    reference to Exhibit 10(i)(E) of Qimonda AGs
    Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006)4(i)(G)


Joint Venture Agreement between Infineon and Nanya Technology
    Corporation, executed on November 13, 2002. (incorporated
    by reference to Exhibit 10(i)(G) of Qimonda AGs
    Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(H)


Amendments No. 1, 2 and 3 to the Joint Venture Agreement
    between Infineon and Nanya Technology Corporation, executed on
    November 13, 2002. (incorporated by reference to
    Exhibit 10(i)(H) of Qimonda AGs Registration
    Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(I)


Amendment No. 4 to the Joint Venture Agreement between
    Infineon and Nanya Technology Corporation, executed on
    November 13, 2002. (incorporated by reference to
    Exhibit 10(i)(I) of Qimonda AGs Registration
    Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(J)


60nm Technical Cooperation Agreement between Nanya Technology
    Corporation and Infineon Technologies AG for DRAM Process
    Technology, dated September 29, 2005. (incorporated by
    reference to Exhibit 10(i)(J) of Qimonda AGs
    Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)




---



##### Table of Contents



ExhibitNo.

Description4(i)(K)


110nm License and 90/70nm Technical Cooperation Agreement
    between Nanya Technology Corporation and Infineon Technologies
    AG for DRAM Process Technology, dated November 13, 2002, as
    amended. (incorporated by reference to Exhibit 10(i)(K) of
    Qimonda AGs Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(L)


Product Purchase and Capacity Reservation Agreement by and
    between Hwa-Ya Semiconductor Inc. (Inotera), Nanya Technology
    Corporation and Infineon Technologies AG, dated July 15,
    2003, as amended. (incorporated by reference to
    Exhibit 10(i)(L) of Qimonda AGs Registration
    Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(M)


Product Purchase and Capacity Reservation Agreement by and
    between Semiconductor Manufacturing International Corporation,
    Semiconductor Manufacturing International (Shanghai) Corporation
    and Infineon Technologies AG, dated December 4, 2002, as
    amended. (incorporated by reference to Exhibit 10(i)(M) of
    Qimonda AGs Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(N)


Product Purchase and Capacity Reservation Agreement 300nm by and
    between Winbond Electronics Corporation and Infineon
    Technologies AG, dated August 6, 2004. (incorporated by
    reference to Exhibit 10(i)(N) of Qimonda AGs
    Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(O)


Cooperative Joint Venture Contract between Infineon Technologies
    China Co., Ltd. and China-Singapore Suzhou Industrial Park
    Ventures Co., Ltd., dated July 28, 2003, as amended.
    (incorporated by reference to Exhibit 10(i)(O) of Qimonda
    AGs Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(P)


Settlement and License Agreement by and among Rambus Inc.,
    Infineon, Infineon Technologies North America Corp. and Infineon
    Technologies Holding North America Inc., dated as of
    March 21, 2005. (incorporated by reference to
    Exhibit 10(i)(P) of Qimonda AGs Registration
    Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(Q)


Master IT Cost Sharing Agreement by and between Infineon
    Technologies AG and Qimonda AG, effective May 1, 2006.
    (incorporated by reference to Exhibit 10(i)(Q) of Qimonda
    AGs Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006)4(i)(R)


License Agreement between Tessera, Inc. and Qimonda AG, dated
    August 1, 2006. (incorporated by reference to
    Exhibit 10(i)(R) of Qimonda AGs Registration
    Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006, for
    portions of which confidential treatment has been granted)4(i)(S)


Eleventh Amendment to License and Technical Cooperation
    Agreement dated November 13, 2002 and First Amendment to
    60nm Technical Cooperation Agreement dated September 29,
    2005, both between Nanya Technology Corporation and Infineon
    Technologies AG. (incorporated by reference to
    Exhibit 10(i)(S) of Qimonda AGs Registration
    Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006)4(i)(T)


Twelfth Amendment to License and Technical Cooperation Agreement
    dated November 13, 2002 between Nanya Technology
    Corporation and Infineon Technologies AG. (incorporated by
    reference to Exhibit 4(i)(T) of Qimonda AGs
    Form 20-F,
    filed with the SEC on November 21, 2006, f for portions of
    which confidential treatment has been granted)4(i)(U)


Addenda No. 6 and 7 to Product Purchase and Capacity
    Reservation Agreement by and between Semiconductor Manufacturing
    International Corporation, Semiconductor Manufacturing
    International (Shanghai) Corporation and Infineon Technologies
    AG, dated December 4, 2002. (incorporated by reference to
    Exhibit 4(i)(U) of Qimonda AGs
    Form 20-F,
    filed with the SEC on November 21, 2006, for portions of
    which confidential treatment has been granted)




---



##### Table of Contents



ExhibitNo.

Description4(i)(V)


First Addendum to Product Purchase and Capacity Reservation
    Agreement 300mm by and between Winbond Electronics Corporation
    and Infineon Technologies AG, dated August 6, 2004.
    (incorporated by reference to Exhibit 4(i)(V) of Qimonda
    AGs
    Form 20-F,
    filed with the SEC on November 21, 2006, for portions of
    which confidential treatment has been granted)4(i)(W)


Addenda No. 2 and 3 to Contribution Agreement
    (Einbringungsvertrag) between Infineon Technologies AG
    and Qimonda AG, dated as of April 25, 2006 (English
    Translation). (incorporated by reference to Exhibit 4(i)(W)
    of Qimonda AGs
    Form 20-F,
    filed with the SEC on November 21, 2006)4(i)(X)


Second Addendum to the Product Purchase and Capacity Reservation
    Agreement 300nm by and between Winbond Electronics Corporation
    and Qimonda AG, dated June 27, 2007. (incorporated by
    reference to Exhibit 10(i) of Qimonda AGs
    Registration Statement on
    Form F-3,
    filed with the SEC on September 11, 2007 for portions of
    which confidential treatment has been granted)4(i)(Y)


Addendum No. 8 to Product Purchase and Capacity Reservation
    Agreement by and between Semiconductor Manufacturing
    International Corporation, Semiconductor Manufacturing
    International (Shanghai) Corporation and Qimonda AG, dated
    June 25, 2007. (incorporated by reference to
    Exhibit 10(ii) of Qimonda AGs Registration Statement
    on
    Form F-3,
    filed with the SEC on September 11, 2007 for portions of
    which confidential treatment has been granted)4(i)(Z)


Addendum No. 9 to Product Purchase and Capacity Reservation
    Agreement by and between Semiconductor Manufacturing
    International Corporation, Semiconductor Manufacturing
    International (Shanghai) Corporation and Qimonda AG, dated
    October 13, 2007 for portions of which confidential
    treatment has been requested.8


List of Significant Subsidiaries and Associated Companies of
    Qimonda AG as defined in
    Rule 1-02(w)
    of
    Regulation S-X:
    See Additional Information  Group
    Structure  Significant Subsidiaries.12(i)


Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act.12(ii)


Certification pursuant to Section 302 of the Sarbanes-Oxley
    Act.13


Certification pursuant to Section 906 of the Sarbanes-Oxley
    Act.14


Consent of KPMG Certified Public Accountant.15


Articles of Association of Inotera Memories, Inc., amended as of
    June, 7 2006 (incorporated by reference to Exhibit 99(A) of
    Qimonda AGs Registration Statement on
    Form F-1,
    as amended, filed with the SEC on August 8, 2006)99(i)


Financial statements for Inotera as of and for the years ended
    December 31, 2005 and 2006 and the years ended December 31,
    2004 and 2005, including the report of the independent
    registered public accounting firm KPMG Certified Public
    Accountants with respect thereto.