##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C. 20549
      FORM 20-F
  REGISTRATION STATEMENT PURSUANT
    TO SECTION 12(b) OR (g)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
    o
    OR
 ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
    x
 For the fiscal year ended
    September 30, 2008
 OR
 TRANSITION REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
 For the transition period from
    ­
    ­to
    ­
    ­.
    o
 OR
 SHELL COMPANY REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
    o
    Date of event requiring this shell company report
    ­
    ­.
  Commission file
    number: 1-15000
  Infineon Technologies
    AG
 (Exact name of Registrant as
    specified in its charter)
  Federal Republic of
    Germany
 (Jurisdiction of incorporation or
    organization)
  Am Campeon 1-12,
 D-85579 Neubiberg
 Federal Republic of
    Germany
 (Address of principal executive
    offices)
   (Name, Telephone, E-mail and/or
    Facsimile number and Address of Company Contact Person)
  Securities registered or to be
    registered pursuant to Section 12(b) of the Act:
 Name of each exchangeTitle of each class

on which registeredAmerican Depositary Shares, each representing 
    one ordinary share, notional value 2.00 per share 
    Ordinary shares, notional value 2.00 per share*

New York Stock Exchange 
    New York Stock Exchange  *
    Listed, not for trading or quotation purposes, but only in
    connection with the registration of American Depositary Shares
    pursuant to the requirements of the Securities and Exchange
    Commission                 x o
   o x
     x o
  Rule 12b-2
  Large
    accelerated filer
    x
    Accelerated
    filer
    o
    Non-accelerated
    filer
    o    x o o
    o x
  Rule 12b-2
  o x
      o o




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INFINEON
    TECHNOLOGIES AG
  ANNUAL REPORT ON
    FORM 20-F
 FOR THE FISCAL YEAR
    ENDED
 SEPTEMBER 30, 2008




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##### Table of Contents



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 Information:Selected Financial Data


1Exchange Rate Information


114Risk Factors


40Item 4:

Information on the Company:History and Development of the Company


52Business Overview


55Organizational Structure


111Property, Plant and Equipment


66, 83Item 4A:

Unresolved Staff Comments


noneItem 5:

Operating and Financial Review and Prospects


2Operating Results


10Liquidity and Capital Resources


21Research and Development; Patents and Licenses


71Trend Information


34Off-Balance Sheet Arrangements


24Contractual Obligations


24Item 6:

Directors, Senior Management and Employees:Directors and Senior Management


85, 88Compensation


99Board Practices


90Employees


87Share Ownership


100Item 7:

Major Shareholders and Related Party Transactions:Principal Shareholders


102Related Party Transactions


103Item 8:

Financial Information


F-1Litigation


80Dividend Policy


112Significant Changes


112Item 9:

The Offer and Listing:Price History of the Stock


116Markets


115Item 10:

Additional Information:Articles of Association


105Material Contracts


123Exchange Controls


120Taxation


115Documents on Display


121Subsidiary Information


114Item 11:

Quantitative and Qualitative Disclosure About Market Risk


32Item 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


noneItem 15:

Controls and Procedures


121Item 16A:

Audit Committee Financial Expert


122Item 16B:

Code of Ethics


122Item 16C:

Principal Accountant Fees and Services


122Item 16D:

Exemption from the Listing Standards for Audit Committees


123Item 16E:

Purchases of Equity Securities by the Issuer and Affiliated
    Purchasers


nonePART III:Item 18:

Financial Statements


F-1Item 19:

Exhibits (See Exhibit Index)


  i




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##### 



CONTENTS
  PageCross References to
    Form 20-F


iPresentation of Financial and Other
    Information


iiiSelected Consolidated Financial Data


1Operating and Financial Review


2Overview of the 2008 Fiscal Year


2Our Business


5The Semiconductor Industry and Factors that
    Impact Our Business


7Results of Operations


10Financial Condition


19Financial Ratios


20Liquidity


21Capital Requirements


24Employees


27Critical Accounting Policies


27Quantitative and Qualitative Disclosure About
    Market Risk


32Outlook


35Recent Developments Related to Qimonda


38Subsequent Events


38Risk Factors


40Business


55Overview


55Industry Background


57Strategy


57Products and Applications


59Customers, Sales and Marketing


64Competition


66Manufacturing


67Research and Development


71Intellectual Property


72Strategic Alliances and Other Collaborations


73Qimonda


75Acquisitions and Dispositions


82Employees


83Legal Matters


83Environmental Protection and Sustainable
    Management


84Real Estate


86Management


87Principal Shareholders


102Related Party Transactions and Relationships


103Articles of Association


105Additional Information


111Organizational Structure


111Dividend Policy


112Significant Changes


112Market Information


112Exchange Rates


114Taxation


115Exchange Controls and Limitations Affecting
    Shareholders


120Documents on Display


121Controls and Procedures


121Audit Committee Financial Expert


122Code of Ethics


122Principal Accountant Fees and Services


122Exemptions from the Listing Standard for Audit
    Committees


123Material Contracts


123Glossary


124Index to Consolidated Financial Statements


F-1Exhibit 1.1Exhibit 1.2Exhibit 1.3Exhibit 1.4Exhibit 12.1Exhibit 12.2Exhibit 13Exhibit 14.1   ii




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PRESENTATION OF
    FINANCIAL AND OTHER INFORMATION    
    our company are to Infineon Technologies AG and its
    subsidiaries; and
    we, us or Infineon are to
    Infineon Technologies AG and, unless the context otherwise
    requires, to its subsidiaries including Qimonda, and its
    predecessor, the former semiconductor group of Siemens
    AG; and
    Qimonda are to Qimonda AG and its subsidiaries, and
    its predecessor, the former memory products segment of Infineon.
    Infineon Logic are to the Company excluding Qimonda.        Forward-Looking
    Statements
    Use of
    Non-U.S.
    GAAP Financial Measures
  non-U.S. GAAP Non-U.S. GAAP non-U.S. GAAP
  Principal
    Business Address
   iii




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##### Table of Contents



SELECTED
    CONSOLIDATED FINANCIAL DATA  You should read the following selected consolidated financial
    data in conjunction with our consolidated financial statements,
    the related notes and Operating and Financial
    Review, all of which appear elsewhere in this annual
    report.
    For the years ended
    September 30,(1)(2)2004


2005


2006


2007


2008


2008(3)(4)(in millions, except per share data)Selected Consolidated Statement of Operations dataNet sales


4,187



3,934



4,114



4,074



4,321


$
6,084Cost of goods sold


2,608



2,745



2,805



2,702



2,823



3,975Gross profit


1,579



1,189



1,309



1,372



1,498



2,109Research and development expenses


871



903



816



768



755



1,063Selling, general and administrative expenses


486



449



520



500



569



801Restructuring
    charges(5)


15



77



23



45



181



255Other operating (income) expenses, net


62



79



36



(20
)


43



61Operating income (loss)


145



(319
)


(86
)


79



(50
)


(71
)Interest (expense) income, net


(11
)


3



(67
)


(40
)


(26
)


(37
)Equity in earnings (losses) of associated companies, net


2



12



(2
)






4



6Other non-operating income (expense), net


(54
)


13



(41
)


7



(16
)


(23
)Minority interests


1







(7
)


(14
)


14



20Income (loss) before income taxes, discontinued operations, and
    extraordinary loss


83



(291
)


(203
)


32



(74
)


(105
)Income tax (expense) benefit


57



(33
)


(47
)


(69
)


(61
)


(85
)Income (loss) from continuing operations


140



(324
)


(250
)


(37
)


(135
)


(190
)Income (loss) from discontinued operations, net of tax


(79
)


12



(18
)


(296
)


(2,987
)


(4,206
)Income (loss) before extraordinary loss


61



(312
)


(268
)


(333
)


(3,122
)


(4,396
)Extraordinary loss, net of tax














(35
)






Net income (loss)


61



(312
)


(268
)


(368
)


(3,122
)

$
(4,396
)Basic and diluted earnings (loss) per share:Earnings (loss) per share from continuing operations


0.19



(0.43
)


(0.34
)


(0.05
)


(0.18
)

$
(0.25
)Earnings (loss) per share from discontinued operations


(0.11
)


0.01



(0.02
)


(0.40
)


(3.98
)

$
(5.60
)Earnings (loss) per share from extraordinary loss, net of tax














(0.04
)






Basic and diluted earnings (loss) per share


0.08



(0.42
)


(0.36
)


(0.49
)


(4.16
)

$
(5.86
)Weighted average shares outstanding  basic (millions)


735



748



748



749



750



750Weighted average shares outstanding  diluted (millions)


737



748



748



749



750



750Selected Consolidated Balance Sheet dataCash and cash equivalents


31



516



1,108



1,073



749


$
1,055Marketable securities


1,936



858



477



210



143



201Working capital (deficit), excluding cash and cash equivalents,
    marketable securities and assets held for disposal


377



381



39



(16
)


105



150Assets held for disposal


4,750



4,861



5,861



5,653



2,224



3,131Total assets


10,976



10,853



11,693



10,753



7,083



9,974Short-term debt and current maturities


103



99



797



260



207



291Liabilities held for disposal


1,933



1,813



1,911



1,897



2,091



2,945Long-term debt, excluding current portion


1,400



1,458



1,058



1,149



1,051



1,480Shareholders equity


5,978



5,629



5,315



4,914



1,764



2,484Selected Consolidated Cash Flow dataNet cash provided by operating activities from continuing
    operations


1,164



607



677



227



535



753Net cash provided by (used in) investing activities from
    continuing operations


(761
)


682



(52
)


(20
)


(620
)


(873
)Net cash used in financing activities from continuing operations


(790
)


(804
)


(11
)


(214
)


(230
)


(324
)Depreciation and amortization expense from continuing operations


568



788



702



609



542


$
763   Notes:
  (1)
    Columns may not add up due to rounding.(2)
    During the 2008 fiscal year we committed to a plan to dispose of
    Qimonda. Accordingly, the results of Qimonda are reported as
    discontinued operations in the Selected Consolidated Statement
    of Operations data for all periods presented, and the assets and
    liabilities of Qimonda have been reclassified as held for
    disposal in the Selected Consolidated Balance Sheet data for all
    periods presented.(3)
    Unaudited.(4)
    Converted from Euro into U.S. dollars at an exchange rate of
    1 = $1.4081, which was the noon buying rate on
    September 30, 2008.(5)
    These charges relate to cost-reduction programs implemented to
    restructure our organization. 1




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##### Table of Contents



OPERATING AND
    FINANCIAL REVIEW FOR THE 2008 FISCAL YEAR  This discussion and analysis of our consolidated financial
    condition and results of operations should be read in
    conjunction with our audited consolidated financial statements
    and other financial information included elsewhere in this
    annual report. Our audited consolidated financial statements
    have been prepared on the basis of a number of assumptions more
    fully explained in Note 1 (Description of Business and
    Basis of Presentation) and Note 2 (Summary of Significant
    Accounting Policies) to our audited consolidated financial
    statements appearing elsewhere in this annual report.
 Overview of the
    2008 Fiscal Year      Financial
    Results
  
    Despite unfavorable currency exchange rates and pricing
    pressure, we were able to increase overall net sales in our
    logic segments during the 2008 fiscal year. Net sales in our
    Automotive, Industrial & Multimarket segment declined
    slightly. This resulted mainly from the deconsolidation of our
    high power bipolar business in the first quarter of the 2008
    fiscal year as a consequence of the formation of a joint venture
    with Siemens AG (Siemens) and the sale of our hard
    disk drive (HDD) business to LSI Corporation
    (LSI). Excluding these effects, and despite
    significant pricing pressure, this segment experienced slightly
    increased net sales in the 2008 fiscal year. Furthermore, during
    the 2008 fiscal year, net sales of our Communication Solutions
    segment increased strongly, driven mainly by the wireless
    business. Overall, net sales of our combined logic segments
    increased by 6 percent, from 4,074 million
    in the 2007 fiscal year to 4,321 million in the
    2008 fiscal year.
    During the quarter ended March 31, 2008, we committed to a
    plan to dispose of Qimonda. The results of Qimonda are reported
    as discontinued operations in our companys consolidated
    statements of operations for all periods presented, and the
    assets and liabilities of Qimonda have been reclassified as held
    for disposal in the consolidated balance sheets for all periods
    presented. Following this reclassification, Qimonda has been
    remeasured to its current fair value less costs to sell for each
    period thereafter, resulting in write-downs
    of 1,303 million, which have been recorded in
    Loss from discontinued operations, net of tax. With
    this reclassification, the individual line items in
    Infineons consolidated statements of operations, including
    Net sales, reflect Infineons continuing
    operations without Qimonda for all periods presented. All
    results relating to Qimonda are reported in the line item
    Loss from discontinued operations, net of tax for
    all periods presented. In addition, earnings per share and the
    statements of cash flows differentiate between
    continuing and discontinued operations
    for all periods presented.
    Earnings before interest and taxes (EBIT) in our
    Automotive, Industrial & Multimarket segment improved
    primarily as a result of the sale of 40 percent of our high
    power bipolar business to, and the formation of a joint venture
    with Siemens, as well as the disposal of the HDD business. EBIT
    of our Automotive, Industrial & Multimarket segment
    was negatively impacted by production equipment impairment
    charges. Excluding these effects, EBIT of this segment remained
    stable in the 2008 fiscal year. In our Communication Solutions
    segment, EBIT continued to improve mainly driven by the sales
    increase. EBIT for our combined logic segments in the 2008
    fiscal year was negative 48 million compared to
    positive 37 million in the 2007 fiscal year, and
    was negatively impacted by restructuring and impairment charges
    in particular, which were only partly offset by gains from the
    sale of businesses. 2




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##### Table of Contents




    The extreme pricing pressure experienced in the memory products
    industry during the last year resulted in Qimonda incurring
    significant losses, which are reflected in Loss from
    discontinued operations, net of tax in our consolidated
    statements of operations. These losses and the write-downs
    recorded during the 2008 fiscal year to re-measure Qimonda to
    its current fair value less costs to sell had a material
    negative impact on our results of operations. Our net loss
    increased from 368 million in the 2007 fiscal
    year to 3,122 million in the 2008 fiscal year.
    On December 21, 2008, we, the German Free State of Saxony,
    and Qimonda jointly announced a financing package for Qimonda.
    The package includes a 150 million loan from the
    German Free State of Saxony, a 100 million loan from
    a state bank in Portugal and a 75 million loan from
    us. In addition to this financing package, Qimonda has announced
    that it expects to receive guarantees totaling
    280 million from the Federal Government of Germany
    and the Free State of Saxony. Based on such guarantees, Qimonda
    has announced that it is already in advanced negotiations
    regarding the financing of 150 million. The
    availability of the total financing package is contingent upon
    successful completion of the relevant state, federal and
    European Commission approval procedures as well as final
    agreement on the detailed terms and conditions of the
    transaction. See  Recent Developments Related
    to Qimonda.
    Our cash flow provided by operating activities from continuing
    operations increased from 227 million in the 2007
    fiscal year to 535 million in our 2008 fiscal
    year. Cash flow used in operating activities from discontinued
    operations was 659 million in the 2008 fiscal
    year, compared to an inflow of 980 million in
    the prior year. This decrease of 1,639 million
    primarily reflects the loss incurred by Qimonda in the 2008
    fiscal year. The sum of our cash flows from operating activities
    (continuing and discontinued operations combined) decreased
    from 1,207 million provided in the 2007 fiscal
    year to 124 million used during the 2008 fiscal
    year.  Corporate
    Activities:
  
    To address rising risks in the current market environment,
    adverse currency trends and below benchmark margins, we
    implemented our cost-reduction program IFX10+ in the
    third quarter of the 2008 fiscal year. Subsequent to the end of
    the 2008 fiscal year, and in light of continuing adverse
    developments in general economic conditions and in our industry,
    we identified significant further costs savings in addition to
    those originally anticipated. We expect that this program will
    result in significant annualized cost savings in the next fiscal
    year, primarily through measures in the following areas:  
    Product portfolio management to eliminate unprofitable or
    insufficiently profitable product families and to increase
    efficiency in research and development (R&D);
    Reduction of manufacturing costs and optimization of the value
    chain;
    Improved efficiency of processes and tasks in the fields of
    general and administrative expenses, R&D and marketing and
    sales;
    Re-organization of our structure along our target markets.
    Starting October 1, 2008, our company is organized in five
    segments: Automotive, Industrial & Multimarket, Chip
    Card & Security, Wireless Solutions and Wireline
    Communications; and
    Reductions in workforce.    
    During the 2008 fiscal year, we completed the following two
    business acquisitions:  
    In October 2007, we acquired the mobility products business of
    LSI to further strengthen our activities in the field of
    communications. The acquired business develops semiconductors
    and software for mobile phone platform solutions.
    In April 2008, we acquired Primarion, Inc., Torrance, California
    (Primarion) in order to further strengthen our
    activities in the field of power management applications.
    Primarion is among the 3




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##### Table of Contents



leaders in designing, manufacturing and marketing digital power
    ICs for computing, graphics and communication applications.  
    During the 2008 fiscal year we completed the following three
    business disposals:   
    In November 2007, we entered into a joint venture agreement with
    Siemens, whereby we contributed all assets and liabilities of
    our high power bipolar business to a newly formed legal entity
    called Infineon Technologies Bipolar GmbH & Co. KG
    (Bipolar). Siemens subsequently acquired a
    40 percent interest in Bipolar. We realized a gain before
    tax of 27 million from this transaction.
    In April 2008, LSI acquired our HDD business, which designs,
    manufactures and markets semiconductors for HDD devices. We
    transferred our entire HDD activities, including customer
    relationships and know-how, to LSI, and we granted LSI a license
    for intellectual property (IP). We realized a gain
    before tax of 41 million from this sale.
    In August 2008, we sold our bulk acoustic wave filter business
    (BAW) to Avago Technologies Ltd (Avago)
    and entered into a supply agreement through December 2009 with
    Avago. The BAW business designs, manufactures and markets
    cellular duplexers for N-CDMA and W-CDMA applications and
    filters for GPS. We realized a gain before tax
    of 11 million and recorded a deferred gain
    of 6 million which will be realized over the
    term of the supply agreement.  
    During the third quarter of the 2008 fiscal year, we repurchased
    a notional amount of 100 million of our
    convertible subordinated notes due 2010. The repurchase was made
    out of available cash. These notes were subsequently cancelled.
    In August 2007, we and International Business Machines
    Corporation, New York, USA (IBM) signed an agreement
    in principle to divest our respective shares in ALTIS
    Semiconductor S.N.C., Essonnes, France (ALTIS) via a
    sale to Advanced Electronic Systems AG (AES). As of
    September 30, 2008, negotiations with AES have not
    progressed as previously anticipated and could not be completed.
    Despite the fact that negotiations are ongoing with additional
    parties, the outcome of these negotiations is uncertain. As a
    result, we reclassified related assets and liabilities
    previously classified as held for sale into held and used in the
    consolidated balance sheet as of September 30, 2008. The
    reclassification of the disposal group into held and used
    required an adjustment of 59 million to the
    carrying amount of the disposal group, which was recorded in
    income from continuing operations. The disposal group was
    measured at the lower of its carrying amount before being
    classified as held for sale, adjusted for any depreciation and
    amortization expense that would have been recognized had the
    disposal group been continuously classified as held and used, or
    the fair value at the date of the reclassification.
    As part of our ongoing efforts to improve our production
    processes, expand our production capabilities, and improve our
    cost position, we:  
    continued to invest in our front-end power fabrication facility
    located in Kulim Hi-Tech Park, Malaysia. The capacity upon
    completion will be approximately 100,000 wafer starts per month
    using 200-millimeter wafers. At the end of the 2008 fiscal year
    aggregate capital expenditures to date were
    approximately 450 million and production was
    running at 40,000 wafer starts per month. The facility produces
    power and logic chips used in industrial and automotive power
    applications;
    are currently qualifying products in 65-nanometer technology at
    several manufacturing partners and have begun to develop
    products based on 40-nanometer technology, which we currently
    plan to have manufactured by one of our manufacturing
    partners; and
    are proceeding with our development agreements with IBM and its
    development and manufacturing partners to develop 32-nanometer
    technology. This agreement builds on the success of earlier
    joint development and manufacturing agreements. 4




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##### Table of Contents



Product and
    Technology Developments
  
    We continued to invest heavily in research and development and
    achieved a number of significant milestones and product
    developments during the year:  Energy Efficiency
  
    the introduction of three new families of
    OptiMOStm

    3 N-channel MOSFETs with breakdown voltages of 40V, 60V and 80V,
    offering industry-leading performance in such key power
    conversion matrices as on-state resistance, which enables
    reductions of power losses of as much as 30 percent in
    power conversion and management applications, including switched
    mode power supplies, DC/DC converters and DC motor drives in
    computers, home appliances, industrial automation systems,
    telecommunications equipment and such consumer devices as power
    tools, electric lawnmowers and fans;
    the introduction of the worlds first 900V high voltage
    power MOSFETs using a charge compensation principle for switched
    mode power supplies (for example, PC silverboxes and server
    power supplies), industry (for example, building and
    streetlighting) and renewable energy applications (for example,
    photovoltaic converters);
    the introduction of our new
    MIPAQtm

    family of IGBT modules that offers a very high level of
    integration enabling highly efficient power inverter designs to
    be used in uninterruptible power supplies, industrial drives
    such as compressors, pumps and fans, solar power plants, and air
    conditioning systems;  Security
  
    our companys appointment to provide security
    microcontrollers for the largest contactless microcontroller
    transportation card project in China in 2008, known as the
    Shenzhen Tong microcontroller cards, which
    are multi-application cards that can be used as both a ticket in
    public transportation and for payment in stores;
    the introduction of a 32-bit high-security flash microcontroller
    designed to bring a significant layer of security and
    convenience to mobile applications based on NFC (Near Field
    Communications), which enables new services on mobile devices,
    such as ticketing, secure banking and loyalty programs, by
    holding a NFC-enabled mobile phone in front of a contactless
    terminal;
    the introduction of the new SLM 76 family of security
    microcontrollers targeting the growing market of
    machine-to-machine communication (M2M) for various applications,
    such as utility monitoring, remote alarm systems, car
    telematics, fleet management and vending machines (stock level
    checks);  Communications
  
    the start of volume production of our HSDPA mobile phone
    platform
    XMMtm6080

    to Samsung Electronics Co. Ltd., Seoul, Korea
    (Samsung) and another customer. We also introduced a
    new generation 3G platform family. The new XMM61xx platform
    family addresses all major 3G market segments from cost
    efficient HSDPA to high-end HSUPA phones;
    the sampling of our 65-nanometer GSM/GPRS single-chip solution
    X-GOLDtm113

    and EDGE single-chip solution
    X-GOLDtm213.

    Both chips integrate the baseband, RF transceiver, power
    management unit, and FM radio in a single die; and
    the introduction of
    XWAYtm

    ARX168, a single-chip ADSL2+ device with industry-first
    integrated Gigabit Ethernet support and advanced features to
    support Internet Protocol Television (IPTV) and wireless
    transmission rates of over 150 Mbps. Our
    Business   5




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##### Table of Contents




    Our Automotive, Industrial & Multimarket segment
    designs, develops, manufactures and markets semiconductors and
    complete system solutions primarily for use in automotive,
    industrial and security applications, and applications with
    customer-specific product requirements.
    Our Communication Solutions segment designs, develops,
    manufactures and markets a wide range of ICs, other
    semiconductors and complete system solutions for wireline and
    wireless communication applications.    
    The Automotive segment designs, develops, manufactures and
    markets semiconductors for use in automotive applications.
    Together with its product portfolio, Infineon offers
    corresponding system know-how and support to its customers.
    The Industrial & Multimarket segment designs,
    develops, manufactures and markets semiconductors and complete
    system solutions primarily for use in industrial applications
    and in applications with customer-specific product requirements.
    The Chip Card & Security segment designs, develops,
    manufactures and markets semiconductors and complete system
    solutions primarily for use in chip card and security
    applications.
    The Wireless Solutions segment designs, develops, manufactures
    and markets a wide range of ICs, other semiconductors and
    complete system solutions for wireless communication
    applications.
    The Wireline Communications segment designs, develops,
    manufactures and markets a wide range of ICs, other
    semiconductors and complete system solutions focused on wireline
    access applications.       6




---



##### Table of Contents



The Semiconductor
    Industry and Factors that Impact Our Business    Cyclicality
      Substantial
    Capital and R&D Expenditures
    per-unit
   7




---



##### Table of Contents



40-nanometer
    Technological
    Development and Competition
    per-unit
  Seasonality
   8




---



##### Table of Contents



Product
    Development Cycles
    Acquisition
    and Divestiture Strategy
    Intellectual
    Property
    Challenges
    that Lie Ahead
    Semiconductor
    Market Conditions in the 2008 Fiscal Year
   9




---



##### Table of Contents



Results of
    Operations  Results of
    Operations as a Percentage of Net Sales
    For the years ended September
    30,(1)2006


2007


2008Net sales


100.0
%


100.0
%


100.0
%Cost of goods sold


(68.2
)


(66.3
)


(65.3
)Gross profit


31.8



33.7



34.7Research and development expenses


(19.8
)


(18.9
)


(17.5
)Selling, general and administrative expenses


(12.6
)


(12.3
)


(13.2
)Restructuring charges


(0.6
)


(1.1
)


(4.2
)Other operating (expense) income, net


(0.9
)


0.5



(1.0
)Operating (loss) income


(2.1
)


1.9



(1.2
)Interest expense, net


(1.6
)


(1.0
)


(0.6
)Equity in (losses) earnings of associated companies, net


(0.1
)






0.1Other non-operating (expense) income, net


(1.0
)


0.2



(0.3
)Minority interests


(0.2
)


(0.3
)


0.3(Loss) income before income taxes, discontinued operations, and
    extraordinary loss


(5.0
)


0.8



(1.7
)Income tax expense


(1.1
)


(1.7
)


(1.4
)Loss from continuing operations


(6.1
)


(0.9
)


(3.1
)Loss from discontinued operations, net of tax


(0.4
)


(7.3
)


(69.1
)Loss before extraordinary loss


(6.5
)


(8.2
)


(72.2
)Extraordinary loss, net of tax






(0.8
)


Net loss


(6.5
)%


(9.0
)%


(72.2
)%   (1)

    Columns may not add up due to rounding.  Reorganization
    Disclosure about
    Segments of an Enterprise and Related Information
   10




---



##### Table of Contents



Net
    Sales
          
    The market prices for our products, including fluctuations in
    exchange rates that affect our prices;
    Our overall product mix and sales volumes;
    The stage of our products in their respective life cycles;
    The effects of competition and competitive pricing strategies;
    Governmental regulations influencing our markets (e.g., energy
    efficiency regulations); and
    The global and regional economic cycles.  For the years ended September 30,2006


2007


2008( in millions, except percentages)Net sales


4,114



4,074



4,321Changes
    year-on-year






(1
)%


6
%Of which:License income


21



20



54Percentage of net sales


1
%


0
%


1
%Effect of foreign exchange over prior year


142



(174
)


(271
)Percentage of net sales


3
%


(4
)%


(6
)%Impact of acquisitions over prior year


40



16



133Percentage of net sales


1
%


0
%


3
%    11




---



##### Table of Contents



Net Sales by
    Segment
  For the years ended September 30,2006


2007


2008( in millions, except percentages)Automotive, Industrial & Multimarket


2,839



69
%


3,017



74
%


2,963



69
%Communication
Solutions(1)


1,205



29



1,051



26



1,360



31Other
Operating
Segments(2)


310



8



219



5



100



2Corporate and
Eliminations(3)


(240
)


(6
)


(213
)


(5
)


(102
)


(2
)Total


4,114



100
%


4,074



100
%


4,321



100
%   (1)
    Includes sales of 0, 30 million and
    10 million for fiscal years ended September 30,
    2006, 2007, and 2008, respectively, from sales of wireless
    communication applications to Qimonda.(2)
    Includes sales of 256 million, 189 million
    and 79 million for fiscal years ended
    September 30, 2006, 2007 and 2008, respectively, from sales
    of wafers from Infineon Logics 200-millimeter facility in
    Dresden to Qimonda under a foundry agreement.(3)
    Includes the elimination of sales of 256 million,
    219 million and 89 million for fiscal
    years ended September 30, 2006, 2007 and 2008,
    respectively, since these sales are not expected to be part of
    the Qimonda disposal plan.  
    Automotive, Industrial & Multimarket Despite continued segment-wide pricing pressure,
    we were able to increase net sales in the 2007 fiscal year. The
    sales growth was mainly driven by continuing strong demand for
    high power products in industrial applications, an increase of
    sales for energy efficient devices in industrial and multimarket
    applications, and increasing demand for government ID
    applications. In the 2008 fiscal year, net sales of the segment
    slightly decreased due to the sale of an interest in the bipolar
    business and formation of a joint venture which is being
    consolidated under the equity method of accounting effective
    October 1, 2007, and the sale of the HDD business to LSI in
    the third quarter of the 2008 fiscal year. Net sales of the
    remaining businesses increased as higher sales volumes more than
    offset the continued pricing pressures caused by technological
    developments and competition. Growth in net sales was driven
    mainly by continued strong demand for industrial high power
    applications, an increase in sales of multimarket applications,
    and a continued growing demand for government ID applications.
    Communication Solutions In the 2007 fiscal
    year, net sales in the Communication Solutions segment declined
    primarily due to a continued decrease in net sales in the
    wireless business mainly driven by the insolvency of BenQs
    German subsidiary as well as ongoing pricing pressure that could
    not be fully offset by increased shipments of complete mobile
    phone platform solutions to leading customers such as LG,
    Panasonic, and ZTE. In addition, net sales in the wireline
    business declined mainly due to lower revenues for digital
    cordless products and the phase-out of our fiber optics business
    during the 2006 fiscal year. Net sales in the 2008 fiscal year
    increased strongly, primarily driven by the wireless business,
    resulting from a strong increase in mobile phone platform
    shipments and the consolidation of the mobility products
    business acquired from LSI. Net sales in the wireline business
    increased slightly as growth in broadband solutions 
    mainly driven by the consolidation of the CPE business acquired
    from TI  was partially offset by declining legacy
    revenues and negative currency effects.
    Other Operating Segments Net sales in the
    2006, 2007 and 2008 fiscal years comprised mainly inter-segment
    sales of wafers from Infineon Logics 200-millimeter
    facility in Dresden to Qimonda under a foundry agreement which
    are eliminated in the Corporate and Eliminations segment.
    Effective November 30, 2007, as part of its measure aimed
    at further focusing its production on
    300-millimeter
    capacities, Qimonda canceled the foundry agreement with Infineon
    Logic resulting in 12




---



##### Table of Contents



a significant decline in net sales during the 2008 fiscal year.
    The last wafers were delivered to Qimonda in May 2008.  Net Sales by
    Region and Customer
  For the years ended September 30,2006


2007


2008( in millions, except percentages)Germany


1,010



25
%


907



22
%


924



21
%Other Europe


933



23
%


888



22
%


818



19
%North America


535



13
%


564



14
%


503



12
%Asia/Pacific


1,324



32
%


1,450



36
%


1,800



42
%Japan


209



5
%


213



5
%


198



4
%Other


103



2
%


52



1
%


78



2
%Total


4,114



100
%


4,074



100
%


4,321



100
%     Asia/Pacific,
    Cost of Goods
    Sold and Gross Margin
    
    Direct materials, which consist principally of raw wafer costs;
    Labor costs;
    Overhead, including maintenance of production equipment,
    indirect materials, utilities and royalties;
    Depreciation and amortization;
    Subcontracted expenses for assembly and test services;
    Production support, including facilities, utilities, quality
    control, automated systems and management functions; and
    Foundry production costs.    
    Factory utilization rates and related idle capacity costs;
    Amortization of purchased intangible assets;
    Product warranty costs;
    Provisions for excess or obsolete inventories; and
    Government grants, which are recognized over the remaining
    useful life of the related manufacturing assets. 13




---



##### Table of Contents



For the years ended September 30,2006


2007


2008( in millions, except percentages)Cost of goods sold


2,805



2,702



2,823Changes
    year-on-year






(4
)%


4
%Percentage of net sales


68
%


66
%


65
%Gross margin


32
%


34
%


35
%     
    Automotive, Industrial &
    Multimarket The gross margin in the 2007
    fiscal year remained unchanged from the prior year, as pricing
    pressure and certain corporate overhead expenses that resulted
    from the Qimonda carve out were offset by increases in
    productivity. In the 2008 fiscal year, we were able to slightly
    increase gross margin by means of measures to increase
    productivity despite an increase in idle capacity cost.
    Communication Solutions In the 2006 fiscal
    year, gross margin was positively impacted by lower idle
    capacity costs and the successful implementation of measures to
    increase productivity, which more than offset the inventory
    write-downs resulting from the insolvency of BenQs German
    subsidiary. In the 2007 and 2008 fiscal years, the gross margin
    of this segment remained stable.  Research and
    Development Expenses
      For the years ended September 30,2006


2007



2008( in millions, except percentages)Research and development expenses


816



768




755Changes
    year-on-year






(6
)
%


(2
)
%Percentage of net sales


20
%


19

%


17

%Government subsidies


49



91




62Percentage of net sales


1
%


2

%


1

%     
    Automotive, Industrial & Multimarket In the 2007 fiscal year, R&D expenses
    remained stable as a percentage of net sales and slightly
    increased in absolute terms mainly driven by automotive and
    industrial applications. In the 2008 fiscal year, R&D
    expenses remained unchanged, both in terms of absolute figures
    and as a percentage of sales.
    Communication Solutions In the 2007 fiscal
    year, R&D expenses continued to decline in absolute terms
    and remained stable as a percentage of net sales, reflecting the
    implementation of cost reduction measures in response to the
    insolvency of BenQs German subsidiary. In the 2008 fiscal
    year, R&D expenses remained stable in absolute terms
    despite the consolidation effect of the acquired activities for
    DSL customer premises equipment and mobile phone ICs, as
    efficiency gains 14




---



##### Table of Contents



and cost reduction measures initiated during the 2007 fiscal
    year were taking effect for a full fiscal year. As a percentage
    of sales, R&D expenses in the Communication Solutions
    segment declined sharply, mainly driven by the revenue increase.  Selling,
    General and Administrative (SG&A) Expenses
      For the years ended September 30,2006



2007


2008( in millions, except percentages)Selling, general and administrative expenses


520




500



569Changes
    year-on-year







(4
)%


14

%Percentage of net sales


13

%


12
%


13

%   year-on-year
  Other Items
    Affecting Earnings
  For the years ended September 30,2006



2007



2008( in millions, except percentages)Restructuring charges


23




45




181Percentage of net sales


1

%


1

%


4

%Other operating expense (income), net


36




(20
)



43Percentage of net sales


(1
)
%


0

%


(1
)
%Equity in (losses) earnings of associated companies, net


(2
)








4Percentage of net sales


0

%


0

%


0

%Other non-operating (expense) income, net


(41
)



7




(16
)Percentage of net sales


(1
)
%


0

%


0

%Extraordinary loss, net of tax







(35
)



Percentage of net sales


0

%


(1
)
%


0

%   Restructuring Charges.
 15




---



##### Table of Contents



Other Operating (Expense) Income, net.
  Equity in (Losses) Earnings of Associated Companies,
    net.
  Other Non-Operating (Expense) Income,
    net.
  Extraordinary Loss, net of tax. Consolidation of
    Variable Interest Entities  an Interpretation of ARB
    No. 51
 16




---



##### Table of Contents



Earnings
    Before Interest and Taxes (EBIT)
    For the years ended September 30,2006


2007


2008( in millions)EBIT:Automotive, Industrial & Multimarket


240



291



315Communication Solutions


(234
)


(165
)


(73
)Other Operating Segments


4



(12
)


(3
)Corporate and Eliminations


(146
)


(77
)


(287
)Total


(136
)


37



(48
)Adjust: Interest expense, net


(67
)


(40
)


(26
)Extraordinary loss, net of tax






35



(Loss) income before income taxes, discontinued operations, and
    extraordinary loss


(203
)


32



(74
)     
    Automotive, Industrial & Multimarket In the 2007 fiscal year, EBIT improved due to an
    increase in net sales despite being negatively impacted by
    additional corporate expense allocations subsequent to the
    Qimonda carve out. In addition, a 17 million gain was
    realized from the sale of our POF business to Avago in June
    2007, which also had a positive impact on EBIT in the 2007
    fiscal year. In the 2008 fiscal year, EBIT improved mainly due
    to gains of 68 million realized from the sale of
    40 percent of our interest in Bipolar to Siemens and the
    sale of our HDD business to LSI. These gains were partly offset
    by impairment charges of 25 million. Furthermore, the
    negative impact from ongoing pricing pressure could be nearly
    offset by improvements primarily in the chip card business.
    Communication Solutions In the 2007 fiscal
    year, EBIT improved despite a decline in net sales, as no
    significant charges were recognized and further cost reduction
    measures were successfully implemented. The EBIT improvement in
    the 2008 fiscal year was mainly driven by the strong increase in
    revenue and despite the negative impact of currency fluctuations
    between the U.S. dollar and the Euro. Segment EBIT in the
    2008 fiscal year included a write-off of 14 million
    of acquired in-process R&D in connection with the
    acquisition of the mobility products business of LSI.
    Other Operating Segments  EBIT in the 2008
    fiscal year improved as a result of better gross margins.
    Corporate and Eliminations EBIT improved
    in the 2007 fiscal year mainly due to reduced unabsorbed idle
    production cost, lower stock option expense, and a revision to
    accrued personnel costs. EBIT in the 2008 fiscal year decreased
    significantly primarily as a result of restructuring costs
    incurred in connection with the IFX10+ program and charges
    resulting from the reclassification of the ALTIS disposal group
    into the held and used category.  Interest
    Expense, Net
    For the years ended September 30,2006



2007



2008( in millions, except percentages)Interest expense, net


(67
)



(40
)



(26
)Percentage of net sales


(2
)
%


(1
)
%


(1
)
%  17




---



##### Table of Contents



Income
    Taxes
  For the years ended September 30,2006


2007


2008( in millions, except percentages)Income tax expense


(47
)


(69
)


(61
)Percentage of net sales


(1
)%


(2
)%


(1
)
%Effective tax rate


(24
)%


149
%


(68
)
%     Loss from
    discontinued operations, net of tax
    For the years ended September 30,2006



2007



2008( in millions)Net sales


3,815




3,608




1,785Costs and expenses


(3,719
)



(3,894
)



(3,324
)Loss on measurement to fair value less costs to sell












(1,303
)Income (loss) from discontinued operations, before tax


96




(286
)



(2,842
)Income tax expense


(114
)



(10
)



(145
)Loss from discontinued operations, net of tax


(18
)



(296
)



(2,987
)      18




---



##### Table of Contents



Net
    Loss
   Financial
    Condition  As of September 30,Percentage Change2007


2008


year-on-year( in millions, except percentages)Current assets


8,491



4,773



(44
)
%thereof: assets held for disposal


5,653



2,224



(61
)
%Non-current assets


2,262



2,310



2

%Total assets


10,753



7,083



(34
)
%Current liabilities


3,468



3,643



5

%thereof: liabilities held for disposal


1,897



2,091



10

%Non-current liabilities


1,338



1,219



(9
)
%Total liabilities


4,806



4,862



1

%Minority Interests


1,033



457



(56
)
%Shareholders equity


4,914



1,764



(64
)
%      19




---



##### Table of Contents



Financial
    Ratios  As of September 30,2006



2007



2008Non-current
asset
intensity(1)


21

%


21

%


33

%Current asset
intensity(2)


79

%


79

%


67

%Degree of
wear of fixed
assets(3)


78

%


79

%


81

%Depreciation
rate of fixed
assets(4)


8

%


8

%


7

%Inventory
intensity(5)


5

%


6

%


9

%Inventory
turnover(6)


5.0




4.6




4.5Inventory
turnover in
days(7)


49




52




53Days sales
outstanding(8)


49




53




50Equity
ratio(9)


45

%


46

%


25

%Return on
equity(10)


(5
)
%


(7
)
%


(94
)
%Return on
assets(11)


(2
)
%


(3
)
%


(35
)
%Equity-to-fixed-assets
ratio(12)


316

%


336

%


135

%Debt-to-equity
ratio(13)


35

%


29

%


71

%     (1)
    
    Non-current asset intensity =
    non-current assets / total assets(2)
    
    Current asset intensity = current
    assets / total assets(3)
    
    Degree of wear of fixed assets =
    accumulated depreciation on fixed assets / historical costs of
    fixed assets at the end of the fiscal year(4)
    
    Depreciation rate of fixed assets =
    annual depreciation of fixed assets / historical costs of fixed
    assets at the end of the fiscal year(5)
    
    Inventory intensity = inventory /
    total assets(6)
    
    Inventory turnover = Cost of goods
    sold / average inventory(7)
    
    Inventory turnover in days =
    average inventory x 360 days / annual net sales(8)
    
    Days sales outstanding = average
    accounts receivable x 360 days / annual net sales(9)
    
    Equity ratio = equity / total assets(10)
    
    Return on equity = net income
    (loss) for the year / average equity(11)
    
    Return on assets = net income
    (loss) for the year / average total assets(12)
    
    Equity-to-fixed-assets
    ratio = equity / property, plant and equipment(13)
    
    Debt-to-equity
    ratio = (short-term debt + long-term debt) / equityThe average of a balance sheet
    position is calculated as the arithmetic average of the amount
    as of the balance sheet dates of the current and the prior years.   20




---



##### Table of Contents



equity-to-fixed
    debt-to-equity debt-to-equity
 Liquidity  Cash
    Flow
      For the years ended September 30,2006


2007


2008( in millions)Net cash provided by operating activities from continuing
    operations


677



227



535Net cash used
in investing activities from continuing
operations(1)


(52
)


(20
)


(620
)Net cash used in financing activities from continuing operations


(11
)


(214
)


(230
)Net increase (decrease) in cash and cash equivalents from
    discontinued operations


298



(174
)


(318
)Net increase (decrease) in cash and cash equivalents


912



(181
)


(633
)   (1)
    In the 2006 fiscal year the amount
    includes a 119 million cash increase as a result of
    the initial consolidation of ALTIS.       21




---



##### Table of Contents



Free Cash
    Flow
    For the years ended September 30,2006


2007


2008( in millions)Net cash provided by operating activities from continuing
    operations


677



227



535Net cash used
in investing activities from continuing
operations(1)


(52
)


(20
)


(620
)Sales of marketable securities, net


(376
)


(266
)


(27
)Free cash flow


249



(59
)


(112
)   (1)

    In the 2006 fiscal year, the amount includes a
    119 million cash increase as a result of the initial
    consolidation of ALTIS.   22




---



##### Table of Contents



Net Cash
    Position
    Payments due by periodLess than


1-2


2-3


3-4


4-5


AfterAs of September 30, 2008

Total


1 year


years


years


years


years


5 years( in millions)Cash and cash equivalents


749



749



















Marketable securities


143



143



















Gross cash position


892



892



















Less:Long-term debt


1,051







861



82



68



40



Short-term debt and current maturities


207



207



















Total financial debt


1,258



207



861



82



68



40



Net cash position


(366
)


685



(861
)


(82
)


(68
)


(40
)


              23




---



##### Table of Contents



Capital
    Requirements    
    Lend funds to Qimonda (see  Recent Developments
    Related to Qimonda);
    Finance our operations;
    Make scheduled debt payments;
    Settle contingencies if they occur; and
    Make planned capital expenditures.    
    Cash flows generated from operations;
    Cash on hand and securities we can sell; and
    Available credit facilities.      Commitments
    and Contingencies
  Payments Due/Expirations by PeriodLessthan


1-2


2-3


3-4


4-5


AfterAs of September 30,
    2008(1)

Total


1 year


years


years


years


years


5 years( in millions)Contractual commitments:Operating lease payments


776



75



63



59



58



56



465Unconditional purchase commitments


634



594



18



11



3



4



4Total commitments


1,410



669



81



70



61



60



469Other contingencies:Guarantees(2)


97



11







5



14



3



64Contingent
government
grants(3)


47



20



12



4



5



6



Total contingencies


144



31



12



9



19



9



64   (1)
    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 for purposes of 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.(2)
    Guarantees are mainly issued for the payment of import duties,
    rentals of buildings and contingent obligations related to
    government grants received.(3)
    Contingent government grants refer to amounts previously
    received, related to the construction and financing of certain
    production facilities, which are not guaranteed otherwise and
    could be refundable if the total project requirements are not
    met.   24




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    Capital
    Expenditures
  For the years ended September 30,2006


2007


2008( in millions)Continuing operations


640



498



312     Credit
    Facilities
    As of September 30, 2008Nature of financial



AggregateTerm

institution commitment

Purpose/intended use

facility


Drawn


Available( in millions)Short-term

firm commitment

general corporate purposes, working capital, guarantees


504



139



365Short-term

no firm commitment

working capital, cash management


176







176Long-
term(1)

firm commitment

project finance


307



307



Total






987



446



541   (1)

    Including current maturities.  five-year
     25




---



##### Table of Contents



Pension Plan
    Funding
            Financial
    Instruments
   26




---



##### Table of Contents



Employees    As of September 30,2006


2007


2008Function:Production


20,528



20,376



19,358Research & Development


5,989



5,833



6,273Sales & Marketing


1,781



1,832



1,905Administrative


1,551



1,557



1,583Infineon Logic


29,849



29,598



29,119Qimonda


11,802



13,481



12,224Total


41,651



43,079



41,343Region:Germany


11,052



10,151



10,053Europe


5,578



5,564



5,192North America


532



581



821Asia/Pacific


12,497



13,145



12,897Japan


149



157



156Other


41







Infineon Logic


29,849



29,598



29,119Qimonda


11,802



13,481



12,224Total


41,651



43,079



41,343      Critical
    Accounting Policies    Revenue
    Recognition
   27




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Revenue Recognition No. 00-21, Revenue Arrangements with Multiple Elements
  Recoverability
    of Long-Lived Assets
    Goodwill and Other Intangible Assets
      Valuation of
    Inventory
     28




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Recoverability
    of Long-Term Investments
    other-than-temporary. other-than-temporary,
      other-than-temporary, other-than-temporary
  Realization of
    Deferred Tax Assets
       29




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Purchase
    Accounting
      Pension Plan
    Accounting
  projected-unit-credit
  Employers Accounting for Pensions
  Employers Accounting for Defined Benefit Pension
    and Other Postretirement Plans  an amendment of FASB
    Statements No. 87, 88, 106, and 132(R)
  Consolidated Balance Sheets.
     30




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##### Table of Contents



Consolidated Statements of
    Operations.
        As of September 30,2007


2008( in millions)Accumulated other comprehensive income


42



33Less income tax effect


3



Accumulated other comprehensive income, net of income taxes


45



33Non-current pension assets


4



16Current pension liabilities






1Non-current pension liabilities


36



41   Consolidated Statements of Cash
    Flows.
   31




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##### Table of Contents



Pension benefits  Sensitivity
    Analysis.
  Effect on net periodic pension costsOne percentage


One percentageincrease


decrease( in millions)Discount rate


(1
)


4Rate of compensation increase


2



(2
)Rate of projected future pension increases


4



(2
)Expected return on plan assets


(4
)


3       Contingencies
      Transition to
    International Financial Reporting Standards
    (IFRS)
  Form 20-F.
 Quantitative and
    Qualitative Disclosure about Market Risk     32




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Commodity
    Price Risk
      Foreign
    Exchange and Interest Risk
   33




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Derivative
    Financial Instruments
  Averagecontractual


Fair valueContract amount


forward


September 30,buy/(sell)


exchange rate


2008( in millions)





( in millions)Foreign currency forward contracts:U.S. dollar


157



1.39498



(4
)U.S. dollar


(213
)


1.47112



(5
)Japanese yen


1



149.79970



Japanese yen


(5
)


153.12944



Singapore dollar


29



2.06060



Singapore dollar


(10
)


2.02664



Great Britain pound


9



0.79446



Malaysian ringgit


52



4.86630



Malaysian ringgit


(3
)


4.89110



Norwegian krone


2



8.03916



Currency Options sold


(177
)


1.4150



(5
)Currency Options purchased


(163
)


1.5310



1Interest rate swaps


500



n/a



(1
)Other


77



n/a



(1
)Fair value, net










(15
)     Accounting for Derivative
    Instruments and Hedging Activities
 34




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##### Table of Contents



Interest Rate
    Risk
     Outlook  Industry
    Environment and Outlook
      Outlook for
    Infineon Logic
  Significant planning assumptions:
 35




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Infineon Logics Revenues: year-over-year anticipated
 36




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##### Table of Contents



Infineon Logics Total Segment
    Profit:
  Fixed assets investment and depreciation for Infineon
    Logic
  Expenditures for research & development for
    Infineon Logic:
   37




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##### Table of Contents



system-on-a-chip
 Recent
    Developments Related to Qimonda     Subsequent
    Events  Various
    Matters
         38




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Qimonda
   39




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##### Table of Contents



RISK
    FACTORS  You should carefully consider the risks described below
    before making an investment decision. The occurrence of any of
    the following events could harm us. If these events occur, the
    trading price of our companys shares could decline, and
    you may lose all or part of your investment. Additional risks
    not currently known to us or that we now deem immaterial may
    also harm us and affect your investment.
  Risks related to
    the semiconductor industry
  Ongoing financial market volatility and further adverse
    developments in the global economic environment could have a
    significant adverse impact on our business, financial condition
    and operating results.
    
    significant declines in sales;
    significant reductions in selling prices;
    increased volatility and/or declines in our share price;
    increased volatility or adverse movements in foreign currency
    exchange rates;
    delays in, or curtailment of, purchasing decisions by our
    customers or potential customers either as a result of overall
    economic uncertainty or as a result of their inability to access
    the liquidity necessary to engage in purchasing initiatives or
    new product development;
    increased credit risk associated with our customers or potential
    customers, particularly those that may operate in industries
    most affected by the economic downturn, such as
    automotives; and
    impairment of goodwill or other assets.    The
    semiconductor industry is characterized by intense competition,
    which could reduce our sales or put continued pressure on our
    prices.
    We operate in
    a highly cyclical industry and our business could suffer from
    periodic downturns.
     40




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##### Table of Contents



Industry
    overcapacity could require us or Qimonda to lower our prices,
    particularly for Qimondas memory products.
      Our business
    could suffer as a result of volatility in different parts of the
    world.
    
    negative economic developments in foreign economies and
    instability of foreign governments, including the threat of war,
    terrorist attacks, epidemic or civil unrest;
    changes in laws and policies affecting trade and
    investment; and
    varying practices of the regulatory, tax, judicial and
    administrative bodies in the jurisdictions where we operate.      In difficult
    market conditions, our high fixed costs adversely impact our
    results.
    The
    competitive environment of the semiconductor industry has led to
    industry consolidation, and we may face even more intense
    competition from newly merged competitors or we may seek to
    acquire a competitor or become an acquisition
    target.
   41




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Risks related to
    our operations
  We intend to
    engage in acquisitions, joint ventures and other transactions
    that may complement or expand our business. We may not be able
    to complete these transactions, and even if executed, these
    transactions pose significant risks and could have a negative
    effect on our operations.
    
    the diversion of our managements attention from our
    existing business to integrate the operations and personnel of
    the acquired or combined business or joint venture;
    possible negative impacts on our operating results during the
    integration process; and
    our possible inability to achieve the intended objectives of the
    transaction.  We may be
    unable to successfully integrate businesses we acquire, and may
    be required to record charges related to the goodwill or other
    long-term assets associated with the acquired
    businesses.
      We may not be
    able to protect our proprietary intellectual property and may be
    accused of infringing the intellectual property rights of
    others.
   42




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Our results
    may suffer if we are not able to match our production capacity
    to demand.
        Our business
    could suffer due to decreases in the volume of demand of our
    customers.
      The loss of
    one or more of our key customers may adversely affect our
    business.
    Fluctuations
    in the mix of products sold may adversely affect our financial
    results.
   43




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##### Table of Contents



If we fail to
    successfully implement an optimum
    make-or-buy
    strategy, our business could suffer from higher
    costs.
    Our business
    could suffer from problems with manufacturing.
      If our outside
    foundry suppliers fail to meet our expectations, our results of
    operations and our ability to exploit growth opportunities could
    be adversely affected.
    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.
   44




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##### Table of Contents



We are subject
    to the risk of property loss and business
    interruption.
    Our business
    could suffer if we are not able to secure the development of new
    technologies or if we cannot keep pace with the technology
    development of our competition.
    We rely on our
    strategic partners and other third parties, and our business
    could be harmed if they fail to perform as expected or
    relationships with them were to be terminated.
  and/or
  
    reduced control over delivery schedules and product costs;
    manufacturing costs that are higher than anticipated;
    the inability of our manufacturing partners to develop
    manufacturing methods appropriate for our products and their
    unwillingness to devote adequate capacity to produce our
    products;
    a decline in product reliability;
    an inability to maintain continuing relationships with our
    suppliers; and
    limited ability to meet customer demand when faced with product
    shortages.   45




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##### Table of Contents



New business
    is often subject to a competitive selection process that can be
    lengthy and uncertain and that requires us to incur significant
    expenses in advance. Even if we win and begin a product design,
    a customer may decide to cancel or change its product plans,
    which could cause us to generate no sales from a product and
    adversely affect our results of operations.
      We rely on a
    limited number of suppliers of manufacturing equipment and
    materials, and we could suffer shortages if they were to
    interrupt supply or increase prices.
  just-in-time
  We may be
    adversely affected by rising raw material prices.
    Our business
    could suffer if we are unable to secure dependable power
    supplies at reasonable cost.
    Our operations
    rely on complex information technology systems and networks, and
    any disruptions in such systems or networks could have a
    material adverse impact on our business and results of
    operations.
   46




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If we are
    unsuccessful in implementing our strategic restructuring plans,
    our revenue and profitability may be adversely
    affected.
    We have
    recorded significant reorganization costs and asset impairment
    charges in the past and may do so again in the future, which
    could materially adversely affect our business.
    Our success
    depends on our ability to recruit and retain a sufficient number
    of qualified key personnel.
  and/or
  Our business
    could suffer if we do not have adequate access to
    capital.
       47




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##### Table of Contents



and/or
    Reductions in
    the amount of government subsidies we receive or demands for
    repayment could increase our reported expenses or limit our
    ability to fund our capital expenditures.
         48




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##### Table of Contents



Our operating
    results may fluctuate significantly from quarter to quarter, and
    as a result we may fail to meet the expectations of securities
    analysts and investors, which could cause our stock price to
    decline.
    
    the overall cyclicality of, and changing economic and market
    conditions in, the semiconductor industry, as well as
    seasonality in sales of consumer products in which our products
    are incorporated;
    our ability to scale our operations in response to changes in
    demand for our existing products and services or demand for new
    products requested by our customers;
    intellectual property disputes, customer indemnification claims
    and other types of litigation risks;
    the gain or loss of a key customer, design win or order;
    the timing, rescheduling or cancellation of significant customer
    orders and our ability, as well as the ability of our customers,
    to manage inventory;
    additional changes in accounting rules, such as the change
    requiring the recording of expenses for employee shares options
    and other stock-based compensation expense, which commenced in
    the 2006 fiscal year, and
    adverse developments with respect to Qimonda.  quarter-to-quarter
  Removal of our
    shares from the DAX 30 or the Philadelphia Stock Exchange
    Semiconductor Sector Index could cause the market price of our
    securities to drop significantly.
    Our results of
    operations and financial condition can be adversely impacted by
    changes in exchange rates.
    If we fail to
    maintain effective internal controls, we may not be able to
    report financial results accurately or on a timely basis, or to
    detect fraud, which could have a material adverse effect on our
    business or share price.
   49




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##### Table of Contents



Changes in tax
    regulations could result in lower earnings and cash
    flows.
    Environmental
    laws and regulations may expose us to liability and increase our
    costs.
      
    a directive that imposes a take-back obligation on
    manufacturers to finance the collection, recovery and disposal
    of electrical and electronic equipment. Because of unclear
    statutory definitions and interpretations in individual member
    states, we are unable at this time to determine in detail the
    consequences of this directive for us.
    an European legislation that restricts the use of lead and other
    hazardous substances in electrical and electronic equipment.
    Directive, that restricts the use of hazardous substances in
    automotive vehicles.
    a directive that describes ecodesign requirements for
    energy-using products, including information requirements for
    components and
    sub-assemblies.
    the European regulatory framework for chemicals, called REACH,
    which deals with the registration, evaluation, authorization and
    restriction of chemicals.
    a recent directive on environmental liability with regard to the
    prevention and remedying of environmental damage.        Our business
    and financial condition could be adversely affected by current
    or future litigation.
     50




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##### Table of Contents



We are a
    subject of investigations in several jurisdictions in connection
    with pricing practices in the DRAM industry, and are a defendant
    in civil antitrust claims in connection with these
    matters.
            Purported
    class action lawsuits have been filed against us alleging
    securities fraud.
   51




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##### Table of Contents



We are the
    subject of an investigation by the European Commission in
    connection with alleged violations of competition laws in the
    Chip Card & Security segment.
    We might be
    faced with product liability or warranty claims.
    Additional risks
    related to Qimonda
  As the
    majority shareholder in Qimonda, we will continue to be
    negatively impacted by any further adverse developments in the
    business of Qimonda.
  day-to-day
  Accounting for
    the Impairment or Disposal of Long-lived Assets
  30-day 12-month
 52




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##### Table of Contents



Qimonda may be
    unsuccessful in its ongoing strategic and operational efforts to
    improve its financial position. If Qimonda is unable to continue
    to meet its obligations as they come due, Infineon could be
    exposed to material liabilities related to the Qimonda business,
    and the operating results and financial condition of Infineon
    could be materially and adversely affected.
    Accounting
    for the Impairment or Disposal of Long-lived Assets
      Even if we are
    successful in reducing or eliminating our interest in Qimonda,
    we will continue to be affected by negative developments in
    Qimondas business.
   53




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##### Table of Contents



The memory
    products business is characterized by particularly intense
    competition and pricing pressure, which could reduce
    Qimondas sales or revenues.
      Qimondas
    business would continue to suffer if it does not have adequate
    access to capital.
   54




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##### Table of Contents



BUSINESS Overview            Corporate and
    Commercial Developments
  
    In December 2007, we announced an agreement with IBM to broaden
    the availability of our high-volume Embedded Flash process. We
    will license our 130-nanometer Embedded Flash technology to IBM
    for new chip designs manufactured by IBM in North America.
    Additionally, we will utilize IBM foundry services for future
    products based on this process.
    In January 2008, we and automotive system manufacturer Delphi
    Corporation announced a strategic technology collaboration for
    the development of a new generation of body control units based
    on the AUTOSAR (AUTomotive Open System ARchitecture) standard.
    Also in January 2008, we entered an agreement with Volkswagen to
    use an Infineon microcontroller in automotive body and
    convenience electronics. Volkswagen will use the microcontroller
    to provide greater gateway capabilities in automotive body and
    convenience electronics to support the increasing requirements
    for networking and communication between individual automotive
    subsystems.
    In February 2008, we signed an agreement with a tier 1
    handset company to supply our
    SMARTitmUE+

    chip for their HSxPA/ EDGE products. The
    SMARTitmUE+

    is the worlds first single chip Receive-diversity
    transceiver IC with a standard DigRF V3.09 interface. The single
    chip RF significantly improves the signal quality from base
    station to handset.
    In March 2008, we announced a collaboration with Intel
    Corporation to serve the TPM (Trusted Platform Module) market.
    Infineon was selected as an Intel Preferred Supplier of TPM 1.2
    Client Software for Intels Trusted Platform Module (Intel
    TPM) 1.2 Hardware Solution. 55




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##### Table of Contents




    Also in March 2008, we and LSI Corporation entered into an
    agreement under which LSI acquired our HDD (hard disk drive)
    business. By divesting our non-core HDD business, we furthered
    our strategic goal of focusing on our core markets. The
    transaction closed in April 2008.
    In April 2008, we signed a memorandum of understanding with the
    European Commission to advance the development of intelligent
    emergency call systems. The European emergency call system eCall
    is to be a standard feature in all new automobiles registered
    for road use in EU countries from September 2010.
    Also in April 2008, we and Samsung Electronics, Inc. entered
    into a collaboration for the use of Infineons HSDPA
    Platform
    XMMtm6080

    in Samsungs new family of HEDGE (HSDPA/EDGE) mobile
    handsets.
    Also in April 2008, we entered into an agreement to buy
    Primarion Corporation. Primarion produces digital power
    integrated circuits (ICs) for power management in computing,
    graphics and communication markets. With this acquisition, we
    strive to broaden our product portfolio in the area of digital
    power management ICs and to become a leader in this fast growing
    market.
    In August 2008, we announced that we are the sole supplier for
    security chip cards for one of Chinas largest contactless
    transportation cards  the Shenzhen Tong
    microcontroller card. The Shenzhen Tong card
    utilizes contactless microcontrollers from our SLE 66PE product
    family. More than three million of these microcontroller cards
    are expected to be issued by the end of the 2008 calendar year.  Technical and
    Product Developments
  
    We introduced a new family of radar system ICs
    (RASICtm)

    which could bring long- and medium-range automotive radar to
    mid-range cars as soon as mid 2010. Infineons RXN7740 is a
    highly integrated front-end chip for the
    76-77 GHz
    frequency range which includes function blocks for the
    oscillator, the power amplifier and four mixers for multiple
    antennas.
    We introduced our new family of 16-bit real-time signal
    controllers that feature fast interrupt response time and
    context switching specifically targeting industrial drive
    applications. The new XE166 family of Real-Time Signal
    Controllers (RTSC) can control up to four individual motors
    simultaneously.
    We announced a 32-bit high-security flash microcontroller
    designed to bring a significant layer of security and
    convenience to mobile applications based on NFC (Near Field
    Communication). In addition to its extensive hardware security
    capability, the new NFC-enabled SIM card microcontroller
    combines a Single Wire Protocol (SWP) interface with contactless
    Mifaretm

    technology.
    We unveiled a new TVS (transient voltage suppression) protection
    diode, which is the smallest in the world. With a footprint of
    just 0.6 x 0.3 square millimeter and a mere
    0.3 millimeter high, the ESD series diode is designed to
    protect the latest electronic communication and consumer devices
    against electrostatic overvoltages. The TVS diode can reliably
    absorb electrostatic discharges as high as 20kV and a response
    time of less than 0.5 nanoseconds.
    We launched a new microcontroller family for automotive
    powertrain and chassis applications. The new Infineon AUDO
    FUTURE family of 32-bit microcontrollers uses the TriCore core
    that combines microcontroller functions with digital signal
    processing and the industrys highest density flash memory.
    The family also includes the first FlexRay communications block
    that has been approved by the TÜV Nord Groups
    Institute for Vehicle Technology and Mobility, combined with
    industry-proven AUTOSAR software and a peripheral control
    processor that offers additional system performance.
    We introduced the CoolMOS 900 V power MOSFET family, intended
    for high-efficiency SMPS (switched-mode power supply),
    industrial and renewable energy applications.
    We announced three new families of power semiconductors, the
    OptiMOS 3 40V, 60V and 80V families, which reduce power losses
    by as much as 30 percent in a given standard TO (Transistor
    Outline) package. 56




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##### Table of Contents




    We introduced the SmartLEWIS MCU PMA71xx family for wireless
    control applications. With the SmartLEWIS MCU family, remote
    control units can use radio frequency (RF) technology instead of
    todays infrared transmission, overcoming the disadvantage
    of
    line-of-sight
    communication.
    We presented the worlds first single chip CAT-iq/DECT
    wireless engine for basestations, dubbed the COSIC (Cordless
    Single Chip)-Modem. The COSIC-Modem integrates the baseband
    processor, transceiver and power amplifier in a monolithic CMOS
    single chip for high quality cordless IP telephony.
    We introduced the X-GOLD 113 and the X-GOLD 213 which enable
    advanced mobile phone features such as camera, mobile Internet
    and audio-entertainment to be accessible in low-cost markets.
    The integration of these features allows customers to reduce the
    production cost of core mobile functions by up to
    40 percent compared with more traditional solutions.
    We announced two new LDMOS RF power transistors targeting
    wireless infrastructure applications, such as WiMAX, in the
    2.5 GHz-to-2.7 GHz frequency band. The high peak power
    performance of the new LDMOS RF power transistors will enable
    designers to simplify their RF power amplifier designs.
    We introduced a new generation 3G platform family. This new
    platform family addresses all major 3G market segments and
    includes a high performance HSPA modem solution, a feature phone
    solution enriched with high multimedia capabilities and a
    cost-efficient 3G solution.
    We announced the worlds first DSL CPE (customer premise
    equipment) solution optimizing support for such applications as
    IPTV (Internet Protocol Television) and providing the best
    possible quality of service across a wide range of deployment
    conditions. Our IPTV over DSL feature package includes
    innovative features such as predictive error decoding (Erasure
    Decoding) and Gamma Layer Retransmission for xDSL CPE solutions. Industry
    Background     Strategy    
    Build on our leadership position in key markets, in
    particular by helping to improve energy
    efficiency.  We believe that our success to
    date has been based on a deep understanding of a wide range of
    applications for the automotive and industrial sectors as well
    as for personal computers and other consumer devices. Our
    leading position in these areas is built on high- 57




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##### Table of Contents



performance products, superior process technologies and
    optimized in-house manufacturing capabilities. We see
    significant growth potential for our power business, in
    particular, driven by high energy costs and the need for ever
    longer battery lifetimes in mobile devices.  
    Provide the technology to be connected every
    day & everywhere  from home, in the office
    or on the way.  We seek to continue to profit
    from our key strengths in areas such as RF and mixed signal
    technologies employed in particular in our communications
    businesses. In order to benefit from the ever-increasing need
    for mobility and communication in all aspects of
    day-to-day
    life, we intend to broaden our customer base and to focus on the
    most promising solutions for future profitable growth, such as
    cellular phone platforms and broadband customer premises
    equipment.
    Strengthen our leadership position in security
    solutions.  We intend to leverage our know-how
    to address applications in new areas, and believe we are well
    positioned to benefit from future trends like the transition to
    e-passports
    and the implementation of digital rights management in consumer
    devices. We believe that the ever-increasing digitalization and
    increasing mobility in daily life will continue to be a key
    driver for our security business.
    Manage carefully the mix of make-versus-buy in
    manufacturing and process technology
    development.  We intend to continue to invest
    in those process technologies that provide Infineon with a
    competitive differentiator. This is the case in particular in
    our power process technologies and in manufacturing capacity
    that can meet the very high quality requirements of automotive
    customers. At the same time, in standard CMOS below
    90-nanometer, we will continue to share risks and expand our
    access to leading-edge technology through long-term strategic
    partnerships with other leading industry participants. We do not
    intend to invest in in-house capacity for standard CMOS
    processes below the 90-nanometer node, and we will make use of
    manufacturing at silicon foundries instead.
    Seek to improve our margin in the 2009 fiscal year and
    beyond and to secure our long-term competitiveness, including
    through our IFX 10+ program.  In
    order to improve our margin and maximize the overall efficiency
    of our operations, we have introduced our IFX 10+ cost reduction
    program, with the goal of identifying and executing structural
    improvements leading to significant ongoing cost savings. In
    particular, through this program we seek to improve our
    portfolio management, further reduce manufacturing and
    administrative costs, and boost the efficiency of our R&D
    efforts and our overall organization. 58




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##### Table of Contents



Products and
    Applications    Principal
    Products, Applications and Customers
  Four LargestCustomers in the 2008Segment

Principal Products

Principal Applications

Fiscal YearAutomotive, Industrial & Multimarket

Power semiconductors (discretes, ICs and modules), sensors and
    microcontrollers (8-bit, 16-bit, 32-bit) with and without
    embedded memory, silicon discretes, chip card and security ICs,
    ASIC design solutions including secure ASICs, Trusted Platform
    Modules

Automotive: Powertrain (engine control, transmission control,
    hybrid), body and convenience (comfort electronics, air
    conditioning), safety and vehicle dynamics (ABS, airbag,
    stability control), connectivity (wireless communication,
    telematics/navigation)

Avnet, Bosch, Continental, SiemensIndustrial & Multimarket: Power management & supplies,
    lighting, drives, renewable energy, power generation and
    distribution, industrial control, discrete commodity products
    (e.g., handsets)Security & ASICs: Chip card and security ICs (e.g., for
    mobile communication, identification, finance), platform
    security for computers and in networks (i.e., Trusted Platform
    Modules), game consoles, hearing aids, computer peripheralsCommunication Solutions

Baseband ICs, RF transceivers, power management ICs, single chip
    ICs integrating these components, mobile phone platform
    solutions including software, DECT chipsets, tuner ICs, RF-power
    transistors, ICs for voice access and core access (e.g., CODECs,
    SLICs, ISDN, T/E), broadband access ICs for xDSL CO/CPE, VoIP,
    Ethernet switch and PHY, system solutions for DSL-modems,
    home-gateways

Mobile telephone systems for major standards (GSM, GPRS, EDGE,
    UMTS), cordless telephone systems for major standards (WDCT,
    DECT), RF connectivity solutions (e.g., Bluetooth, GPS),
    cellular base stations, voice access and core access, broadband
    access solutions for central office, broadband customer premises
    equipment

Hon Hai Precision, LG Electronics, Nokia, Samsung   Automotive,
    Industrial & Multimarket
   59




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##### Table of Contents



Automotive
      
    Semiconductors for power train applications, which perform
    functions such as engine and transmission control and hybrid
    power trains;
    Semiconductors for safety management, which manage tasks such as
    the operation of airbags, anti-lock braking systems, electronic
    stability systems, power steering systems and tire pressure
    monitoring systems;
    Semiconductors for body and convenience systems, which include
    light modules, heating, ventilation and air conditioning
    systems, door modules (power windows, door locks, mirror
    control) and electrical power distribution systems; and
    Semiconductors for connectivity, such as those used for wireless
    communication and navigation/telematics.            Industrial &
    Multimarket
   60




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##### Table of Contents




    Power supplies (AC/DC), divided into two main categories:
    uninterruptible power supplies, such as power backbones for
    Internet servers; and switched-mode power supplies for PCs,
    servers and consumer electronics such as televisions and gaming
    consoles, as well as battery chargers for mobile phones,
    notebook computers and other handheld devices;
    DC/DC power converters for computing and communication
    applications such as motherboards, telecommunications equipment
    and graphic cards;
    Lighting (electronic lamp ballast and control);
    Drives for machine tools, motor controls, pumps, fans and
    heating, ventilation, consumer appliances (such as washing
    machines), air-conditioning systems and transportation as well
    as power supplies for additional consumer appliances such as
    inductive cooking;
    Industrial automation, meters and sensors;
    Power generation, especially in the fields of renewable energy
    and power distribution systems; and
    Other industrial applications such as medical equipment.    
    AF (audio frequency) discretes (general purpose diodes and
    transistors, switching diodes, digital transistors);
    RF (radio frequency) discretes (diodes, transistors, Small Scale
    Integrated Circuits (SSICs), Monolithic ICs);
    HIPAC (High Performance Active and Passive Integration) devices
    offering ESD/EMI (Electro Static Discharge/Electro Magnetic
    Interference) protection and high integration in advanced
    applications (e.g., in mobile communication devices); and
    SMM (Silicon MEMS Microphone): acoustical sensors based on MEMS
    (Micro-Electro-Mechanical System) semiconductor technology (for
    use in mobile phone applications, for example).  Security &
    ASICs
   61




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
    Systems on Chip (SoC) for HDD applications;
    Products for computer and gaming peripherals (e.g., in wireless
    control pads or memory sticks);
    Secure ASICs, taking advantage of our security know-how (e.g.,
    for authentication or copy protection);
    Trusted Platform Module (TPM) products
    (hardware-based security for trusted computing); and
    Customer designs manufactured by us on a foundry basis.    Communication
    Solutions
    Wireless
    Communications
       62




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
    GSM, or Global System for Mobile Communication, which is the de
    facto wireless telephone standard in Europe and available in
    more than 120 countries. GSM is a wireless mobile
    telecommunication standard that includes General Packet Radio
    Service (GPRS), Enhanced Data rate for GSM Evolution
    (EDGE), and Universal Mobile Telecommunications
    System (UMTS). We offer products and solutions such
    as baseband ICs, RF transceivers, power management ICs,
    single-chip ICs integrating these components, mobile software,
    and reference designs addressing all of these wireless
    communication standards;
    UMTS, a GSM-based standard for third-generation (3G)
    broadband, packet-based transmission of text, digitized voice,
    video, and multimedia at data rates up to 2 megabits per second
    (Mbps). We offer complete multimedia mobile phone
    platforms, RF transceivers and mobile software for UMTS and also
    for the HSDPA standard (High-Speed Downlink Packet Access) that
    supports data rates of up to 7.2 Mbps;
    DVB (Digital Video Broadcasting), covering a number of generally
    accepted protocol standards for digital television. DVB-T
    (Digital Video Broadcasting  Terrestrial) and DVB-H
    (Digital Video Broadcasting  Handhelds) are
    television protocol standards that enable digital transmission
    of digital content for moving reception devices, such as mobile
    phones and PDAs (Personal Digital Assistants). We offer tuner
    ICs for stationary, portable and mobile television receivers for
    the analog (PAL, NTSC) and digital (DVB-C/T, ISDB, ATSC, DAB,
    DVB-H, T-DMB, ISDB-T) TV standards;
    The Global Positioning System (GPS), a location
    system based on a network of satellites. GPS is widely used in
    automotive, wireless, mobile computing and consumer
    applications. Together with a development partner (which was
    subsequently acquired by Broadcom), we have introduced the
    Hammerhead product family, a single-chip Assisted Global
    Positioning System (A-GPS) receiver for mobile
    telephones, smart phones and PDAs; and
    Bluetooth, a computing and telecommunications industry
    specification that allows mobile phones, computers and PDAs to
    connect with each other and with home and business phones and
    computers using a short-range wireless connection. We offer
    BlueMoon UniCellular, a fast and energy-efficient Bluetooth-chip
    which supports the Bluetooth enhanced data rate
    (EDR) protocol.    Wireline
    Communications
    IP-based
   63




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
    broadband CPE equipment such as xDSL-modems and home-gateways;
    broadband access solutions for the central office, such as xDSL
    line cards; and
    voice access, core access and enterprise applications, e.g.,
    analog line cards, ISDN, T/E, ATM and PBX.   Customers, Sales
    and Marketing  Customers
                Automotive,
    Industrial & Multimarket
  Automotive
   64




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Industrial &
    Multimarket
    Security &
    ASICs
      Communication
    Solutions
  Wireless
    Communications
    Wireline
    Communications
      Sales and
    Marketing
       65




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Backlog
  Standard
    Products
    Non-Standard
    Products
   Competition   66




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##### Table of Contents



Key Competitors
    by Segment
  Automotive, Industrial & Multimarket

Atmel, Freescale, International Rectifier, Mitsubishi, NXP,
    Renesas, Samsung, STMicroelectronics, Texas InstrumentsCommunication Solutions

Broadcom, Conexant, Freescale, ST-NXP Wireless, Qualcomm, Texas
    Instruments       
    successful and timely development of new products, services and
    manufacturing processes;
    product performance and quality;
    manufacturing costs, yields and product availability;
    pricing;
    our ability to meet changes in our customers demands by
    altering production at our facilities;
    our ability to provide solutions that meet our customers
    specific needs;
    the competence and agility of our sales, technical support and
    marketing organizations; and
    the resilience of our supply chain for services that we
    outsource and the delivery of products, raw materials and
    services by third-party providers needed for our manufacturing
    capabilities. Manufacturing    Front-end
    65-nanometer
 67




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Back-end
     68




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##### Table of Contents



Manufacturing
    Facilities
    Manufacturing
    Logic Facilities in 2008
  Year ofcommencementof firstproduction line


Principal products or functionsFront-end facilities  wafer fabrication plantsDresden, Germany


1996


ASICs with embedded flash memory, logic ICsEssonnes,
France(1)


1963
(2)

Logic ICs and ASICs with embedded flash memoryHorten, Norway


1985


MEMSKulim, Malaysia


2006


Power, smart power, ASICs with embedded flash memoryRegensburg, Germany


1986


Power, smart power, sensors, mixed signalVillach, Austria


1979


Power, smart power and discretesWarstein, Germany


1965
(2)

High powerBack-end facilities  assembly and final testing
    plantsBatam, Indonesia


1996


Leaded power and non-power ICsCegléd, Hungary


1997


High powerMorgan Hill, California


2002


RF-powerRegensburg, Germany


2000


Chip card modules, sensors and pilot linesSingapore


1970


Leadless and leaded non-power ICs, wafer testSkoppum, Norway


1991


SensorsWarstein, Germany


1965
(2)

High powerWuxi, China


1996


Discretes, chip card modulesMalacca, Malaysia


1973


Discretes, power packages, sensors, logic ICs, leaded power   (1)
    ALTIS, our joint venture with IBM.(2)
    The current main production line began operations in 1991.    Front-end
     69




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##### Table of Contents



ramp-up
  Back-end
    Wafer-Level Ball
    Manufacturing
    joint venture
   70




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##### Table of Contents



Research and
    Development    Research and
    Development Expenditures
  For the years ended September 30,2006


2007


2008( in millions, except percentages)Expenditures (net of subsidies received)


816



768



755As a percentage of net sales


20
%


19
%


17
%   system-on-chip IP-blocks,
  system-on-chip
     71




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Locations
    Principal
    Research and Development Locations
  Location

Areas of CompetenceAllentown, Pennsylvania, USA

IC, software and system development for wireless productsBangalore, India

IC, software and system development for wireless, wireline,
    automotive and industrial products, CAD flow and library
    developmentBucharest, Romania

Power mixed-signal semiconductors, chip card ICs, RF IC
    development for wireless productsDresden, Germany

Advanced technology developmentDuisburg, Germany

IC and system development for wireless products, RF IC
    development, customer support for wireline productsGraz, Austria

Contactless systems, automotive power systems, sensor productsLinz, Austria

RF IC and software development for wireless and sensor productsMorgan Hill, California, USA

RF IC development for high power applicationsMunich, Germany

Main product development site
    Technology integration, CAD flow, library development, IC,
    software and system development for wireline products,
    microcontrollers, ASICs with embedded DRAM, chip card ICs,
    automotive power and industrial products, process technology
    developmentNuremberg, Germany

Software and system development for wireless productsRegensburg, Germany

Package development, process technology developmentShanghai, China

System development for wireless productsSingapore

IC, software and system development for wireline, wireless and
    industrial products, package developmentSophia Antipolis, France

IC development for wireless products, library development, CAD
    flowVillach, Austria

IC development for power semiconductor products, mixed signal IC
    development for automotive and communication productsXian, China

IC development for automotive and communication products    Intellectual
    Property   72




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Strategic
    Alliances and Other Collaborations    multi-party
   73




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New
    collaborations announced in the 2008 fiscal year
    
    To complement our cooperation on wafer technologies, we entered
    into a development alliance with STMicroelectronics and
    STATSChipPAC on next-generation embedded wafer level ball grid
    array technology. This packaging technology enables small form
    factor, heterogeneous integration of subsystems and systems in
    single packages. The cooperation is designed to pave the way to
    widespread adoption of this technology by printed circuit board
    manufacturers and assembly houses.
    With respect to our core competence in the security and chip
    card business, we entered into new collaborations with Intel.
    One agreement concerns the development of optimized chip
    solutions for high-density SIM cards in the 4- to 64-megabit
    memory capacity range, for which we are contributing our
    expertise in security hardware. Pursuant to a second agreement,
    we are providing our Trusted Platform Module professional
    package software to fully support Intels TPM1.2 hardware
    solutions. This package, fully compliant with TCGs Trusted
    Software Stack Work Group Specifications, will enable PC
    designers to take advantage of a cost effective, flexible and
    reliable security solution for Intel vPro technology, Intel
    Centrino processor technology and other fundamental business
    platforms.
    We also entered into a collaboration agreement with PGP
    Corporation to increase and enhance security options. Together,
    we will initially provide a combined solution towards Trusted
    Platform Module provisioning and management in conjunction with
    PGP Whole Disk Encryption.
    We signed a license agreement for Differential Power Analysis
    Contermeasures with Cryptography Research.
    Based on our background in confidential data storage, smart
    cards and security controllers, we expanded our cooperation with
    the German Federal Ministry of the Interior on certification and
    identity documents.
    In the USA we entered a cooperation with IBM on the technology
    and manufacturing of security solutions for the USA government,
    specifically USA passports.
    We expanded our cooperation with IMEC on innovative design -
    technology interfaces in future technology nodes.
    We signed a memorandum of understanding with the European
    Commission on its automotive safety initiative. This move adds
    momentum to eCall, an integrated, automatic accident alert
    system for automobiles. The system collects data from key safety
    components and transmits this data to an emergency call center
    along with location information supplied by a GPS navigation
    module.
    Our subsidiary Comneon and Sonus Networks joined forces in
    developing, testing and provisioning advanced consumer-ready
    mobile services, including
    IP-voice for
    mobile networks and Voice Call Continuity (VCC), a service that
    allows seamless roaming between operator controlled mobile and
    open WiFi networks. 74




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
    In order to strengthen our MEMS based business, we entered a
    cooperation with Hosiden on the development of silicon-based
    microphones. Hosiden is contributing its competence in
    electro-mechanics
    and acoustics as well as its market expertise, while we are
    providing our rugged microphone MEMS technology.
    With respect to our CPE business, we entered into a cooperation
    with Jungo Ltd. to deliver production-ready carrier-grade
    reference designs for the multi-service residential gateway
    market. The partnership, currently based upon our ADSL2/2+ and
    VDSL solutions, enables customers to offer complete solutions
    for operator-specific products based on a pre-integrated,
    carrier-ready software platform from Jungo. Qimonda          Four LargestCustomers in thePrincipal Products

Principal Applications

2008 Fiscal YearStandard DRAM components (DDR, DDR2, DDR3)

Memory modules, components-on-mainboards, consumer devices
    (digital TV, set-top boxes, DVD recorders)

HP, Kingston,
    Microsoft, SonyPersonal system DRAM modules (Unbuffered DIMMs with and without
    ECC, SO-DIMMs, Micro-DIMMs)

Desktop computers, workstations, entry-level servers, notebook
    computers, sub-notebooks, ultra-mobile PCsInfrastructure DRAM modules (Registered DIMMs, FB-DIMMs,
    VLP-DIMMs)

Servers, Workstations, blade serversNetworking, storage and industrial DRAM products

Networking, telecom and industrial equipment, storageGraphics (DDR2, GDDR3, GDDR5)

Graphic cards in desktop and notebook computers, game consolesConsumer (DDR1, DDR2)

Digital TV, set-top boxes, digital cameras, dvd recorders    75




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year-over-year price-per-bit
  Calendar Year

2002


2003


2004


2005


2006


2007DRAM market in billion

$
15



17



27



26



34



31DRAM market in billion megabits


563



785



1,260



1,902



2,809



5,069Year-over-year change average price per bit


(3
)%


(23
)%


3
%


(37
)%


(11
)%


(51
)%     DRAMs for
    Infrastructure, Graphics and Consumer Applications
    Infrastructure
    Applications.
  Graphics Applications.
  Consumer Applications.
 76




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##### Table of Contents



Mobile Applications.
  Standard DRAMs
    for PC, Notebook and Workstation Applications
      Other
    Products
      systems-on-a-chip
  Sales
        Customers
   77




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Competition
    Manufacturing
    Qimonda
    Manufacturing Facilities in 2008
  Year ofcommencement offirst productionline


Principal products or functionsFront-end facilities  wafer fabrication plantsDresden 300-millimeter, Germany


2001


DRAMRichmond
200-millimeter,
Virginia(1)


1998


DRAMRichmond 300-millimeter, Virginia


2005


DRAMBack-end facilities  assembly and final
    testing plantsDresden,
Germany(2)


1996


DRAM components and modulesMalacca,
Malaysia(3)


1973


DRAM components and modulesJohor, Malaysia


2008


DRAM modulesPorto, Portugal


1997


DRAM components and modulesSuzhou,
China(4)


2004


DRAM components and modules   (1)
    On October 13, 2008, Qimonda announced plans to reposition
    itself in light of the severe downturn in the DRAM industry. As
    part of the related restructuring plan, it decided to ramp down
    manufacturing at the 200-millimeter facility in Richmond,
    Virginia by the end of the second quarter of the 2009 fiscal
    year.(2)
    As part of the repositioning of Qimonda, it was decided to close
    the back-end manufacturing at Dresden by March 2009.(3)
    Module production was terminated in Malacca in October 2008 with
    production being transferred to Johor. The facility in Malacca
    has been sold and transferred to Infineon in November 2008.(4)
    Qimonda Technologies Suzhou Co. Ltd., Qimondas joint
    venture with CSVC.  Front-end
  46-nanometers.
 78




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##### Table of Contents



300-millimeter 46-nanometer per-unit
    Back-end
    Qimonda
    Fab Cluster System
    Qimonda Joint
    Ventures and Partnerships
  CSVC.
 79




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##### Table of Contents



SMIC. 300-millimeter
  Winbond.
    75-nanometer
    Inotera.
   80




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##### Table of Contents



Qimonda
    Research and Development
        Locations
    Principal Qimonda
    Research and Development Locations
  Location

Areas of CompetenceDresden, Germany

DRAM technology developmentMunich, Germany

Computing and graphic DRAMs, emerging memory researchXian, China

Infrastructure DRAMs   Qimonda
    Strategic Alliances
  start-up
  300-millimeter
 81




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##### Table of Contents



Acquisitions and
    Dispositions    Acquisition of
    Mobility Products Business of LSI
    Sale of
    40 percent of High Power Bipolar business
    Sale of Hard
    Disk Drive (HDD) IC Business
    Acquisition of
    Primarion, Inc.
   82




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##### Table of Contents



Sale of Bulk
    Acoustic Wave (BAW) Filter Business
   Employees    Betriebsverfassungsgesetz Sprecherausschuss
       Legal
    Matters  Pending
    Matters
     83




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Accruals and
    the Potential Effect of these Lawsuits on Our
    Business
       Environmental
    Protection and Sustainable Management      2
 84




---



##### Table of Contents



2
                 85




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##### Table of Contents



Real
    Estate         86




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##### Table of Contents



MANAGEMENT  Supervisory Board
    Members
    Membership of other SupervisoryBoards and comparable governingbodies of domestic and foreignTerm




companies during the fiscal year endedName

Age


expires


Occupation

September 30, 2008Max Dietrich KleyChairman


68



2010


Lawyer

Chairman of the Supervisory Board of:
    SGL Carbon AG, WiesbadenMember of the Supervisory Board of:
    BASF SE, Ludwigshafen
    HeidelbergCement AG, Heidelberg
    Schott AG, MainzMember of the Board of Directors of:
    UniCredit S.p.A., Milan, ItalyGerd
    Schmidt(1)Deputy Chairman


54



2009


Chairman of the Infineon Central Works CouncilChairman of the Infineon Works Council, RegensburgWigand
    Cramer(1)


55



2009


Labor union clerk IG Metall, BerlinAlfred
    Eibl(1)


59



2009


Chairman of the Infineon Works Council, Munich-CampeonProf. Johannes
    Feldmayer(2)


51



2010


Management ConsultantJakob
    Hauser(1)


56



2009


Chairman of the Works Council, Qimonda AG, MunichGerhard
    Hobbach(1)


46



2009


Deputy Chairman of the Infineon Works Council, Munich-CampeonProf. Dr. Renate Köcher


56



2010


Managing Director of Institut für Demoskopie Allensbach
    GmbH, Allensbach

Member of the Supervisory Board of:
    Allianz SE, Munich 
    BASF SE, Ludwigshafen (until January 14, 2008)MAN AG, Munich
    BMW AG, Munich (since May 8, 2008)Dr. Siegfried Luther


64



2010


Managing Director of Reinhard Mohn Verwaltungs GmbH,
    Gütersloh

Member of the Supervisory Board of:
    WestLB AG, Duesseldorf/Muenster
    Wintershall Holding AG, Kassel
    EVONIK Industries AG, Essen
      (since December 3, 2007)Chairman of the Board of Administration of:
    RTL Group S.A., LuxembourgMember of the Board of Administration of:
    Compagnie Nationale à
      Portefeuille S.A., Loverval, BelgiumMichael
    Ruth(1)Representative of Senior Management


48



2009


Corporate Vice President Reporting and Planning, Infineon
    Technologies AGProf. Dr. rer. nat. Doris
    Schmitt-Landsiedel


55



2010


Professor at the Munich Technical University, Munich 87




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Membership of other SupervisoryBoards and comparable governingbodies of domestic and foreignTerm




companies during the fiscal year endedName

Age


expires


Occupation

September 30, 2008Kerstin
    Schulzendorf(1)


46



2009


Member of the Works Council, Infineon-DresdenDr. Eckart Sünner


64



2010


President Legal, Taxes & Insurance BASF SE, Ludwigshafen
    (until December 31, 2007)

Member of the Supervisory Board of:
    K+S AG, KasselPresident, Chief Compliance Officer BASF SE, Ludwigshafen
    (since January 1, 2008)Alexander
    Trüby(1)


38



2009


Member of the Works Council Infineon DresdenProf. Dr. rer. nat. Martin Winterkorn


61



2010


Chairman of the Management Board
    Volkswagen AG, Wolfsburg

Chairman of the Supervisory Board of:   Audi AG, Ingolstadt Member of the Supervisory Board of:  Salzgitter AG, Salzgitter   FC Bayern München AG, Munich  TÜV Süddeutschland Holding AG, MunichMember of the Board of Administration of:
    SEAT S.A., Barcelona, SpainChairman of the Board of Directors of:
    Scania AB, Södertälje, Sweden(since May 3, 2007)Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus Wucherer


64



2010


Member of the Corporate Executive Committee (until December
    31, 2007)Management Consultant (since January 1, 2008) Siemens
    AG, Munich

Member of the Supervisory Board of:  Deutsche Messe AG, Hanover  BSH Bosch und Siemens Hausgeräte GmbH,  Munich        (until April 30, 2008)  Leoni AG, Nuremberg  SAP AG, Walldorf  Chairman of the Board of Administration of:  Siemens Ltd., Beijing, Peoples Republic of China       (until May 19, 2008)  Siemens S.A., Lisbon, Portugal (until April 28, 2008)  Siemens Ltd., Mumbai, India (until March 31, 2008)   Siemens Ltd., Seoul, Korea (since May 1, 2007)   (1)
    Employee representative.(2)
    Prof. Johannes Feldmayer was recently convicted by a state court
    in Germany for breach of confidence and tax evasion for actions
    taken while he was an executive of Siemens AG. 88




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Committee

MembersExecutive Committee

Max Dietrich Kley
    Gerd Schmidt
    Prof. Dr. rer. nat. Martin WinterkornInvestment, Finance and Audit Committee

Max Dietrich Kley
    Dr. Siegfried Luther
    Gerd SchmidtMediation Committee

Max Dietrich Kley
    Gerd Schmidt
    Alexander Trüby
    Prof. Dr. rer. nat. Martin WinterkornNomination Committee

Max Dietrich Kley
    Prof. Johannes Feldmayer
    Prof. Dr. Renate Köcher
    Dr. Siegfried Luther
    Prof. Dr. rer. nat. Doris Schmitt-Landsiedel
    Dr. Eckart Sünner
    Prof. Dr. rer. nat. Martin Winterkorn
    Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus WuchererStrategy and Technology Committee

Alfred Eibl
    Jakob Hauser
    Alexander Trüby
    Prof. Dr. rer. nat. Doris Schmitt-Landsiedel
    Prof. Dr. rer. nat. Martin Winterkorn
    Prof. Dr.-Ing. Dr.-Ing. E.h. Klaus WuchererQimonda Committee

Alfred Eibl
    Prof. Johannes Feldmayer
    Dr. Siegfried Luther
    Gerd Schmidt      89




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Management Board
    Members
    Memberships of Supervisory Boardsand comparable governingbodies of domestic and foreignTerm



companies during the fiscal yearName

Age

expires

Position

ended September 30, 2008Peter Bauer

48

September 30, 2011

Spokesman of the Management Board, Chief Executive Officer
    (since June 1, 2008)

Member of the Board of Directors of:
    Infineon Technologies China Co., Ltd., 
      Shanghai,  Peoples Republic of China
    
         (since  June 1,
    2008)Infineon Technologies Asia Pacific Pte., 
      Ltd.,  Singapore (since June 1,
    2008) 
    Infineon Technologies North America Corp.,
      Wilmington, Delaware, USA (since June
    1,  2008)Infineon Technologies Japan K.K., Tokyo, Japan
    (since June 12, 2008)Prof. Dr. Hermann Eul

49

August 31, 2012

Member of the Management Board and Executive Vice President

Member of the Supervisory Board of:
    7 Layers AG, RatingenDr. Reinhard Ploss

52

May 31, 2012

Member of the Management Board and Executive Vice President

Chairman of the Supervisory Board of:  Infineon Technologies Austria AG, Villach, AustriaMember of the Board of Directors of:   Infineon Technologies (Kulim) Sdn. Bhd., Kulim,       MalaysiaMember of the Supervisory Board of:   Qimonda AG, Munich (since August 19, 2008)Dr. Marco Schröter (since April 1, 2008)

45

March 31, 2013

Member of the Management Board, Executive Vice President and
    Chief Financial Officer

Member of the Supervisory Board of:
    Infineon Technologies Austria AG, Villach, Austria
        (since May 5, 2008)Member of the Board of Directors of (each since 
      April 1, 2008):
    Infineon Technologies Asia Pacific Pte., 
      Ltd.,  Singapore
    Infineon Technologies China Co., Ltd.,  Shanghai, 
      Peoples Republic of China
    Infineon Technologies North America 
      Corp.,  Wilmington, Delaware, USAResigned Members of the Management BoardDr. Wolfgang Ziebart (resigned as of May 31,
    2008)

58



Chairman of the Management Board, President and Chief Executive
    Officer

Member of the Board of Directors of (each until May 31,
    2008):
    Infineon Technologies China Co., Ltd., 
      Shanghai,  Peoples Republic of
    China
    Infineon Technologies Asia Pacific Pte., 
      Ltd.,  Singapore
    Infineon Technologies Japan K.K., Tokyo, Japan
    Infineon Technologies North America 
      Corp.,  Wilmington, Delaware, USA 90




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Memberships of Supervisory Boardsand comparable governingbodies of domestic and foreignTerm



companies during the fiscal yearName

Age

expires

Position

ended September 30, 2008Peter J. Fischl (retired as of March 31, 2008)

62



Member of the Management Board, Executive Vice President and
    Chief Financial Officer

Chairman of the Supervisory Board of:
    Qimonda AG, Munich
    Infineon Technologies Austria AG, Villach, 
      Austria  (since December 5, 2007 until
    March 31, 
      2008)Member of the Board of Directors of (each until March 31,
    2008):
    Infineon Technologies Asia Pacific Pte., Ltd.,
      Singapore
    Infineon Technologies China Co., Ltd.,
      Shanghai,  Peoples Republic of China
    Infineon Technologies North America Corp.,
      Wilmington, Delaware, USA   Peter Bauer
  Dr. Marco Schröter
  Prof. Dr. Hermann Eul
  Dr. Reinhard Ploss
     91




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Overview of
    Corporate Governance Structure
  (Aktiengesetz)
        Supervisory
    Board
  Leitende Angestellte
   92




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##### Table of Contents




    to monitor our management;
    to appoint our Management Board;
    to approve decisions of our Management Board in relation to the
    following:  
    financial and investment planning, including both budgets and
    the establishment of limits for financial indebtedness;
    any investment or disposition that exceeds 10 percent of
    our total investment budget; and
    the taking of any financial risk vis-à-vis third parties in
    an amount exceeding 5 percent of our share capital.  
    to approve matters in areas that the Supervisory Board has made
    generally subject to its approval; and
    to approve matters that the Supervisory Board decides on a
    case-by-case
    basis to make subject to its approval.    
    preparing the decisions of the Supervisory Board regarding
    approval of our companys annual financial statements,
    including review of the financial statements, our annual
    reports, the proposed application of earnings and the reports of
    our auditors;
    reviewing the interim financial statements of our company that
    are made public or otherwise filed with any securities
    regulatory authority;
    issuing to our auditors terms of reference for their audit of
    our annual financial statements;
    examining our compliance, internal control, internal audit and
    risk management systems; and
    approving decisions of our Management Board or a committee
    thereof regarding increases of our companys capital
    through the issuance of new shares out of authorized or
    conditional capital, to the extent they are not issued to
    employees as part of a share option plan.       93




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##### Table of Contents



Management
    Board
        
    Decisions relating to financial and investment planning,
    including both budgets and the establishment of limits for
    financial indebtedness;
    Decisions relating to any investment or disposition that exceeds
    10 percent of our total investment budget; and
    Decisions relating to the taking of any financial risk
    vis-à-vis third parties in an amount exceeding
    5 percent of our share capital.  case-by-case
    
    the annual financial statements;
    the calling of the shareholders general meeting;
    matters for which the consent of the shareholders general
    meeting or of the Supervisory Board must be obtained; and
    matters involving basic organizational, business policy and
    investment and financial planning questions for our company.       94




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Significant
    Differences between our Corporate Governance Practices and those
    of U.S. Companies Listed on the New York Stock
    Exchange
    Compensation
    Compensation
    of the Management Board
  Compensation
    structure
      
    Fixed annual base salary.  The
    non-performance-related annual base salary is contractually
    fixed. It is partly paid in 12 equal monthly installments, and
    partly paid as a lump sum at the end of each fiscal year
    (referred to below as the Annual Lump Sum).
    Performance-related compensation.  The
    annual bonus is dependent on the return on assets, which we
    define as earnings before interest and taxes (EBIT) adjusted for
    exceptional effects, in proportion to capital employed. This
    ensures that a bonus is earned only if the business develops
    positively. The annual bonus is determined by the Executive
    Committee in a two-phase process. In a first step, a target
    bonus amount is determined from a table agreed in the service
    agreements on the basis of the return on assets. The Executive
    Committee subsequently evaluates the personal performance of
    each individual board member over the past fiscal year, and then
    determines the actual bonus amount. In addition to the bonus
    dependent on the return on assets, Management Board contracts
    provide for a possible special bonus awarded in recognition of
    special business achievements.
    Infineon Technologies AG stock
    options.  Management Board members are
    eligible to receive stock options under the 2006 Stock Option
    Plan approved by the Infineon Technologies AG Shareholders
    Annual General Meeting on February 16, 2006, as a variable
    compensation element with a long-term incentive effect and a
    risk character. Each stock option guarantees the right to
    acquire one share at a fixed exercise price. The options are
    valid for six years and may be exercised only after an initial
    waiting period of three years and not during specified black-out
    periods. The exercise price at which a share may be acquired
    upon exercise of an option is equal to 120 percent of the
    average Infineon opening prices on the Frankfurt Stock Exchange
    in the XETRA 95




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##### Table of Contents



trading system over the five trading days preceding the date
    that the option is granted. The exercise of the options is
    dependent on the attainment of absolute and relative performance
    targets. The precondition for the exercise of the option rights
    is that the Infineon share price on the Frankfurt Stock Exchange
    in the XETRA trading system equals or exceeds the exercise price
    on at least one trading day during the option life. Furthermore,
    the options can only be exercised if the Infineon share price
    exceeds the performance of the comparative index Philadelphia
    Semiconductor Index for three consecutive days on at least one
    occasion during the life of the option. These absolute and
    relative performance targets serve to ensure that the options
    are only exercised if the value of the Company significantly
    increases. The Supervisory Board is responsible for all
    decisions on granting options to members of the Management
    Board. In the 2008 fiscal year, no options were granted to
    members of the Management Board. The main provisions of our 2006
    stock option plan are described in note 27 to our
    consolidated financial statements for the year ended
    September 30, 2008, and are available in full text on the
    Internet at www.infineon.com.  Compensation
    of the Management Board in the 2008 fiscal year
    (1)
  Overview of
    the total compensation
  Cash

Stock-based

Totalcompensation

compensation

compensationManagement Board member

Fiscal year

in 

in 

in
    (2)Peter Bauer (CEO)


2008



1,089,614







1,089,6142007



920,146



203,000



1,123,146Prof. Dr. Hermann Eul


2008



914,457







914,4572007



729,815



203,000



932,815Peter J. Fischl


2008



515,933







515,933(until March 31, 2008)


2007



1,027,130



304,500



1,331,630Dr. Reinhard Ploss


2008



720,859







720,8592007



235,659







235,659Dr. Marco Schröter


2008



584,757







584,757(as of April 1, 2008)


2007











Dr. Wolfgang Ziebart


2008



1,094,386







1,094,386(until May 31, 2008)


2007



1,636,828



406,000



2,042,828Total


2008



4,920,006







4,920,0062007



4,549,578



1,116,500



5,666,078   (1)
    Each in accordance with the duration of membership on the
    Management Board during the respective fiscal year.(2)
    This amount includes the fair value of the stock options granted
    in the respective fiscal year. 96




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Cash
    compensation
    Non-performance-related compensationAnnual Base
    Salary(1)Amount paid inmonthly

Annual lump



Total cashManagement Board member

Fiscal year

installments

sum

Other(2)

compensationPeter Bauer (CEO)


2008



533,333



533,333



22,948



1,089,6142007



367,500



532,500



20,146



920,146Prof. Dr. Hermann Eul


2008



450,000



450,000



14,457



914,4572007



358,333



358,333



13,149



729,815Peter J. Fischl


2008



200,000



300,000



15,933



515,933(until March 31, 2008)


2007



400,000



600,000



27,130



1,027,130Dr. Reinhard Ploss


2008



350,000



350,000



20,859



720,8592007



116,667



116,667



2,325



235,659Dr. Marco Schröter


2008



250,000



250,000



84,757



584,757(as of April 1, 2008)


2007















Dr. Wolfgang Ziebart


2008



533,333



533,333



27,720



1,094,386(until May 31, 2008)


2007



800,000



800,000



36,828



1,636,828Total


2008



2,316,666



2,416,666



186,674



4,920,0062007



2,042,500



2,407,500



99,578



4,549,578   (1)
    Each in accordance with the duration of membership on the
    Management Board during the respective fiscal year.(2)
    The compensation included under Other comprises
    primarily the monetary value of the provision of a company car
    and insurance contributions, and, in the case of
    Dr. Schröter, the reimbursement of expenses for the
    maintenance of double residence.  Stock-based
    compensation
    Commitments to
    the Management Board upon termination of
    employment
  Allowances and
    pension entitlements in the 2008 fiscal year
   97




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Pensionentitlements





Transfer to pension(annual) as of





reserves inbeginning of


Maximum


fiscal year 2008Management Board member

pension period in 


amount in 


(US-GAAP) in Peter Bauer (CEO)


280,000
(1)


400,000



226,778Prof. Dr. Hermann Eul


200,000



270,000



175,369Peter J. Fischl


350,000



350,000



475,576Dr. Reinhard Ploss


170,000



210,000



169,488Dr. Marco Schröter


250,000



350,000



Dr. Wolfgang Ziebart


560,000



560,000



2,089,871Total


1,810,000







3,137,082   (1)

    Mr. Bauers pension entitlement was increased
    effective October 1, 2008 to 280,000.    Early
    termination of employment
  Wertpapiererwerbs- und
    Übernahmegesetz
    Fringe
    benefits and other awards in the 2008 fiscal year
  
    The members of the Management Board received no fringe benefits
    besides the elements listed under Other in the
    compensation table.
    We do not provide loans to the members of the Management Board. 98




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##### Table of Contents




    The members of the Management Board received no compensation or
    promise of compensation with regard to their activities on the
    Management Board from third parties in the 2008 fiscal year.
    We maintain directors and officers group liability
    insurance (D&O insurance). The insurance policy covers the
    personal liability risk in the event of claims made against
    members of the Management Board for indemnification of losses
    incurred in the exercise of their duties. Each member of the
    Management Board has agreed to an adequate deductible (which
    constitutes a deductible as defined by the German Corporate
    Governance Code, clause 3.8, paragraph 2).  Payments to
    former members of the Management Board in the 2008 fiscal
    year
      Compensation
    of the Supervisory Board
  Compensation
    structure
    
    fixed compensationof 25,000 per year and
    a variable elementin the form of 1,500 share
    appreciation rights per annum, which are granted and may be
    exercised on the same terms as provided for by the Infineon
    Stock Option Plan 2006 approved by the Shareholders Annual
    General Meeting, which is valid in the fiscal year in which
    these rights are granted. These share appreciation rights,
    however, do not entitle the holder to purchase shares but only
    to a settlement in cash. The share appreciation rights expire
    six years from the date of grant, and can be exercised only
    following a waiting period of three years. The exercise price
    per share appreciation right amounts to 120 percent of the
    average Infineon opening price on the Frankfurt Stock Exchange
    in the XETRA trading system over the five trading days preceding
    the date the respective share appreciation right is granted. The
    exercise of share appreciation rights is dependent on the
    attainment of absolute and relative performance targets as
    stipulated in the 2006 Stock Option Plan. The basic principles
    of our 2006 Stock Option Plan are described in note 27 to
    the consolidated financial statements for the year ended
    September 30, 2008 and are available in full text on the
    Internet at www.infineon.com.     99




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Compensation
    of the Supervisory Board in the 2008 fiscal year
    Additionalcompensation forBase compensation

special functions

Total paymentSupervisory Board member

in 

in 

in Max Dietrich Kley


25,000



25,000



50,000Wigand Cramer


25,000







25,000Alfred Eibl


25,000



12,500



37,500Prof. Johannes Feldmayer


25,000







25,000Jakob Hauser


25,000



12,500



37,500Gerhard Hobbach


25,000







25,000Prof. Dr. Renate Köcher


25,000







25,000Dr. Siegfried Luther


25,000



12,500



37,500Michael Ruth


25,000







25,000Gerd Schmidt


25,000



12,500



37,500Prof. Dr. Doris
    Schmitt-Landsiedel


25,000



12,500



37,500Kerstin Schulzendorf


25,000







25,000Dr. Eckart Sünner


25,000







25,000Alexander Trüby


25,000



12,500



37,500Prof. Dr. Martin Winterkorn


25,000



12,500



37,500Prof. Dr.-Ing. Klaus Wucherer


25,000



12,500



37,500Total


400,000



125,000



525,000   Other
      Long-Term
    Incentive Plans
  2006 Stock Option Plan.
 100




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2001 International Long-Term Incentive
    Plan.
      1999 Stock Option Plan.
   101




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PRINCIPAL
    SHAREHOLDERS    Shares ownedNumber


%Dodge &
Cox Investment
Managers(1)


75,227,800



10.0Merrill Lynch
International(2)


39,347,562



5.3Templeton
Global Advisors
Limited(3)


38,674,360



5.2AXA
S.A.(4)


37,960,797



5.1Members of
the Management Board as a
group(5)


*



*Members of
the Supervisory Board as a
group(5)


*



*   (1)
    The business address of Dodge & Cox Investment
    Managers is 555 California Street, 40th Floor,
    San Francisco, California 94104, USA. Based solely on a
    notification to Infineon by the shareholder on March 11,
    2008 pursuant to the requirements of the German Securities
    Trading Act.(2)
    The business address of Merrill Lynch International is Merrill
    Lynch Financial Centre, 2 King Edward Street, London ECA1HQ,
    United Kingdom. Based solely on a notification to Infineon by
    the shareholder on February 15, 2008 pursuant to the
    requirements of the German Securities Trading Act.(3)
    The business address of Templeton Global Advisors Limited is
    Templeton Building, Lyford Cay, PO Box N7759, Nassau,
    Bahamas. Based solely on a notification to Infineon by the
    shareholder on February 23, 2007 pursuant to the
    requirements of the German Securities Trading Act. On
    February 7, 2008, Templeton Global Advisors Limited,
    Franklin Resources, Inc., Charles B. Johnson and Rupert H.
    Johnson jointly filed a Schedule 13G with the US Securities and
    Exchange Commission reporting a beneficial holding of
    116,664,804 ordinary shares as of December 31, 2007,
    representing 15.6 percent of our outstanding shares as of such
    date. On December 17, 2008, Templeton Global Advisors
    Limited notified Infineon that its shareholding had fallen below
    3 percent.(4)
    The business address of AXA S.A. is 25, Avenue Matignon, 75008
    Paris, France. Based solely on a notification to Infineon by the
    shareholder on September 11, 2008 pursuant to the
    requirements of the German Securities Trading Act. On
    December 12, 2008, AXA S.A. notified Infineon that its
    shareholding had fallen below 3 percent.(5)
    Represents less than 1 percent of our outstanding share
    capital.  (Wertpapierhandelsgesetz)
       102




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RELATED PARTY
    TRANSACTIONS AND RELATIONSHIPS  Qimonda
      Carve-out and
    Control
        Arrangements
    relating to AMTC and BAC
    Arrangement
    concerning the Licensing of Intellectual Property
    Indemnification
   103




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Ongoing Services
    Relationships
    Form 20-F no. 001-32972).
 104




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ARTICLES OF
    ASSOCIATION    Equity
    
    At our formation, our share capital consisted of
    400,000,000, represented by 200,000,000 shares.
    On January 26, 2000, we increased our share capital from
    400,000,000 to 800,000,000 by issuing
    200,000,000 shares for a 400,000,000 transfer of
    corporate funds to capital. The new shares were issued to
    Siemens and Siemens Nederland N.V. in proportion to their
    respective ownership interests in our company at that time.
    On February 14, 2000, we increased our share capital from
    800,000,000 to 1,200,000,000 by issuing
    200,000,000 shares for a 400,000,000 transfer of
    corporate funds to capital. The new shares were issued to
    Siemens and Siemens Nederland N.V. in proportion to their
    respective ownership interests in our company at that time.
    On March 8, 2000, we increased our share capital by
    33,400,000 to 1,233,400,000 for cash contributions
    by issuing 16,700,000 shares with full dividend entitlement
    for the 2000 fiscal year. The shares were sold in our initial
    public offering.
    On April 28, 2000, we increased our share capital by
    15,184,860 by issuing to Intel Corporation
    7,592,430 shares with full dividend entitlement for the
    2000 fiscal year. After the execution of the capital increase,
    our share capital consisted of 1,248,584,860.
    On June 28, 2000, we increased our share capital by
    2,418,154 against a contribution in kind by issuing
    1,209,077 shares with full dividend entitlement for the
    2000 fiscal year to Savan Communications Ltd. After execution of
    the capital increase our share capital consisted of
    1,251,003,014.
    On March 16, 2001, we increased our share capital by
    886,976 against a contribution in kind by issuing
    443,488 shares with full dividend entitlement for the 2001
    fiscal year in connection with our investment in Ramtron
    International Corporation. After execution of the capital
    increase our share capital consisted of 1,251,889,990.
    On April 11, 2001, we increased our share capital by
    1,413,428 against a contribution in kind by issuing
    706,714 shares with full dividend entitlement for the 2001
    fiscal year in connection with our acquisition of Ardent
    Technologies Incorporated. After the execution of the capital
    increase our share capital consisted of 1,253,303,418.
    In July 2001, we increased our share capital by
    120,000,000 by issuing 60,000,000 shares (with full
    dividend entitlement for the 2001 fiscal year) in our secondary
    public offering. After the execution of the capital increase our
    share capital consisted of 1,373,303,418.
    On July 25, 2001, we increased our share capital by
    12,746,870 against a contribution in kind by issuing
    6,373,435 shares with full dividend entitlement for the
    2001 fiscal year in connection with our acquisition of Catamaran
    Communications Incorporated. After the execution of the capital
    increase, our share capital consisted of 1,386,050,288. 105




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
    On November 29, 2001, we increased our share capital by
    24,000 by issuing 12,000 shares with full dividend
    entitlement for the 2002 fiscal year to group employees in
    connection with our 2001 employee share purchase program.
    After the execution of the capital increase, our share capital
    consisted of 1,386,074,288.
    On July 24, 2002, we increased our share capital by
    686,920 by issuing 343,460 shares with full dividend
    entitlement for the 2002 fiscal year to group employees in
    connection with our 2002 employee share purchase program.
    After the execution of the capital increase, our share capital
    consisted of 1,386,761,208.
    On August 30, 2002, we increased our share capital by
    55,000,000 against a contribution in kind by issuing
    27,500,000 shares with full dividend entitlement for the
    2002 fiscal year in connection with our acquisition of Ericsson
    Microelectronics AB, Stockholm, Sweden. After the execution of
    the capital increase, our share capital consisted of
    1,441,761,208.
    On March 23, 2004, we increased our share capital by
    53,358,510 against a contribution in kind by issuing
    26,679,255 shares with full dividend entitlement for the
    2004 fiscal year in connection with the acquisition of the
    remaining interest in Infineon Technologies SC300
    GmbH & Co. KG, Dresden. After the execution of the
    capital increase our share capital consisted of
    1,495,119,718.
    During the 2005 fiscal year, our share capital increased by
    19,000 as a result of the exercise of 9,500 employee
    stock options. After these exercises our share capital consisted
    of 1,495,138,718.
    During the 2006 fiscal year, our share capital increased by
    79,870 as a result of the exercise of 39,935 employee
    stock options. After these exercises our share capital consisted
    of 1,495,218,588.
    During the 2007 fiscal year, our share capital increased by
    4,238,682 as a result of the exercise of
    2,119,341 employee stock options. After these exercises our
    share capital consisted of 1,499,457,270.
    During the 2008 fiscal year, our share capital increased by
    26,900 as a result of the exercise of 13,450 employee
    stock options. After these exercises our share capital consisted
    of 1,499,484,170.    Authorized
    Capital
      
    in an aggregate nominal amount of up to 30 million to
    issue shares to employees of the Infineon group companies (in
    which case preemptive rights of the existing shareholders are
    excluded) until January 19, 2009 (Authorized Capital
    II/2004); and
    in an aggregate nominal amount of up to 224 million
    to issue shares for cash (in which case preemptive rights of
    existing shareholders may be excluded under certain
    circumstances by the Management Board with the consent of the
    Supervisory Board) or in exchange for contributions in kind (in
    which case preemptive rights of the existing shareholders may be
    excluded by the 106




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##### Table of Contents



Management Board with the consent of the Supervisory Board)
    until February 14, 2012 (Authorized Capital 2007).  Conditional
    Capital
    
    Conditional Capital I in an aggregate nominal amount of
    91.6 million that may be used to issue up to
    45.8 million new registered shares in connection with our
    1999 and our 2001 long-term incentive plans;
    Conditional Capital III in an aggregate nominal amount of
    29 million that may be used to issue up to
    14.5 million new registered shares in connection with our
    2001 and 2006 long-term incentive plan;
    Conditional Capital IV/2006 in an aggregate nominal amount of
    24.5 million that may be used to issue up to
    12.25 million new registered shares in connection with our
    2006 long-term incentive plan;
    Conditional Capital 2002 in an aggregate nominal amount of
    152 million that may be used to issue up to
    76 million new registered shares upon conversion of debt
    securities issued in June 2003; and
    Conditional Capital 2007 in an aggregate nominal amount of
    248 million that may be used to issue up to
    124 million new registered shares upon conversion of debt
    securities, which we may issue at any time prior to
    February 14, 2012.
    Conditional Capital 2008 in an aggregate nominal amount of
    149.9 million that may be used to issue up to
    74.95 million new registered shares upon conversion of debt
    securities, which we may issue at any time prior to
    February 13, 2013.    Preemptive
    Rights
      Shareholders
    Meetings and Voting Rights
   107




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##### Table of Contents



(elektronischer Bundesanzeiger)
            
    the exclusion of preemptive rights in a capital increase or the
    issue of convertible bonds or bonds with warrants;
    capital decreases;
    a creation of authorized capital or conditional capital;
    a dissolution; 108




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##### Table of Contents




    a merger or a consolidation with another stock corporation 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 inter-company agreements.  Dividend
    Rights
            Liquidation
    Rights
    Shareholders
    Other Rights and Obligations
    Disclosure
    Requirement
   109




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Repurchase of
    Our Own Shares
    Corporate
    Purpose of Our Company
    Registration
    of Our Company with the Commercial Register
   110




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##### Table of Contents



ADDITIONAL
    INFORMATION Organizational
    Structure    Principal
    Subsidiaries as of September 30, 2008
  Corporate name

Registered office

Principal activityInfineon Group:ALTIS Semiconductor
    S.N.C(1)

Essonnes, France

ProductionInfineon Technologies Asia Pacific Pte. Ltd.

Singapore

Production, distributionInfineon Technologies Austria AG

Villach, Austria

ProductionInfineon Technologies Bipolar GmbH & Co.
    KG(2)

Warstein, Germany

Production and developmentInfineon Technologies China Co. Ltd.

Shanghai, China

HoldingInfineon Technologies Dresden GmbH & Co. OHG

Dresden, Germany

ProductionInfineon Technologies Finance GmbH

Neubiberg, Germany

Financial servicesInfineon Technologies France S.A.S.

Saint Denis, France

DistributionInfineon Technologies Holding B.V.

Rotterdam, The Netherlands

HoldingInfineon Technologies Investment B.V.

Rotterdam, The Netherlands

HoldingInfineon Technologies Japan K.K.

Tokyo, Japan

DistributionInfineon Technologies North America Corp.

Delaware, USA

Research, development and distributionInfineon Technologies SensoNor AS

Horten, Norway

ProductionInfineon Technologies (Advanced Logic) Sdn. Bhd.

Malacca, Malaysia

ProductionInfineon Technologies (Kulim) Sdn. Bhd.

Kulim, Malaysia

ProductionInfineon Technologies (Malaysia) Sdn. Bhd.

Malacca, Malaysia

ProductionPrimarion Inc.

Torrance, California

Research and developmentQimonda Group:Inotera Memories
    Inc.(3)

Taoyuan, Taiwan

ProductionQimonda
    AG(4)

Munich, Germany

Research, development, production and distribution of
    semiconductor memory products and related servicesQimonda Asia Pacific Pte. Ltd.

Singapore

DistributionQimonda Dresden GmbH & Co. OHG

Dresden, Germany

ProductionQimonda Europe GmbH

Munich, Germany

Distribution, sales and marketingQimonda Holding B.V.

Rotterdam, The Netherlands

HoldingQimonda Japan K.K.

Tokyo, Japan

Sales and marketingQimonda Investment B.V.

Rotterdam, The Netherlands

HoldingQimonda Malaysia Sdn. Bhd.

Malacca, Malaysia

ProductionQimonda Module (Suzhou) Co. Ltd.

Suzhou, China

ProductionQimonda North America Corp.

Delaware, USA

Distribution, sales and marketing, research and developmentQimonda Portugal S.A.

Vila do Conde, Portugal

ProductionQimonda Richmond, LLC

Delaware, USA

ProductionQimonda Technologies (Suzhou) Co.
    Ltd.(5)

Suzhou, China

Production   (1)
    50 percent interest plus one share held by Infineon. In
    August 2007, Infineon, IBM and Advanced Electronic Systems AG
    (AES) entered into an agreement, under which AES is
    to acquire the interests in ALTIS from Infineon and IBM. As of
    September 30, 2008, negotiations with AES have not
    progressed as previously anticipated and could not be completed.
    Despite the fact that negotiations are ongoing with additional
    parties, the outcome of these negotiations is uncertain.(2)
    60 percent held by Infineon.(3)
    35.6 percent ownership interest held by Qimonda. On
    October 13, 2008, Qimonda announced that they entered into
    a share purchase agreement to sell its 35.6 percent stake
    in Inotera Memories, Inc, to Micron Technology, Inc,
    for cash proceeds of US$400 million. The sale of the
    Inotera stake occurred in two equal tranches, on
    October 20, 2008 and November 26, 2008, respectively.(4)
    77.5 percent held by Infineon.(5)
    62.8 percent interest held by Qimonda. 111




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Dividend
    Policy  Aktiengesetz Bilanzgewinn Bilanzverlust
 Significant
    Changes  Form 20-F, Form 20-F.
 Market
    Information  General
   112




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Trading on the
    Frankfurt Stock Exchange
    Price per share in EuroHigh


LowFiscal year ended September 30, 2004


13.65



7.80Fiscal year ended September 30, 2005


9.00



6.43Fiscal year ended September 30, 2006


9.95



7.60Fiscal year ended September 30, 2007


13.44



9.25Fiscal year ended September 30, 2008


11.95



3.66October 2006 through December 2006


10.68



9.25January 2007 through March 2007


12.27



10.66April 2007 through June 2007


12.81



10.88July 2007 through September 30, 2007


13.44



10.70October 2007 through December 2007


11.95



7.62January 2008 through March 2008


8.13



4.08April 2008 through June 2008


7.11



4.57July 2008 through September 30, 2008


6.25



3.66June 2008


6.67



5.53July 2008


5.32



4.37August 2008


6.12



4.80September 2008


6.25



3.66October 2008


4.12



2.05November 2008


3.06



1.72December
    2008(1)


1.69



0.65   (1)

    Up to and including
    December 22, 2008.   113




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##### Table of Contents



Trading on the
    New York Stock Exchange
    Price per ADS inU.S. dollarsHigh


LowFiscal year ended September 30, 2004


15.87



9.39Fiscal year ended September 30, 2005


11.74



8.40Fiscal year ended September 30, 2006


12.68



8.95Fiscal year ended September 30, 2007


18.68



11.77Fiscal year ended September 30, 2008


17.13



5.24October 2006 through December 2006


14.03



11.77January 2007 through March 2007


16.26



13.94April 2007 through June 2007


17.28



14.75July 2007 through September 30, 2007


18.68



14.36October 2007 through December 2007


17.13



11.29January 2008 through March 2008


11.87



6.34April 2008 through June 2008


10.96



7.20July 2008 through September 30, 2008


8.99



5.24June 2008


10.30



8.53July 2008


8.39



6.96August 2008


8.97



7.40September 2008


8.99



5.24October 2008


5.74



2.57November 2008


3.97



2.02December
    2008(1)


2.07



0.88   (1)

    Up to and including
    December 22, 2008.   Exchange
    Rates    Annual average
    exchange rates of the U.S. dollar per Euro
  Fiscal year ended September 30,

Average2004


1.21992005


1.27272006


1.23642007


1.34152008


1.5067  114




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##### Table of Contents



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


LowApril 2008


1.6010



1.5568May 2008


1.5784



1.5370June 2008


1.5749



1.5368July 2008


1.5923



1.5559August 2008


1.5569



1.4660September 2008


1.4737



1.3939    Taxation  German
    Taxation
    Taxation of
    the Company
         115




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##### Table of Contents



Inter
    alia
  Taxation of
    Dividends
    Bundeszentralamt für Steuern,
  Withholding
    Tax Refund for U.S. Shareholders
      Bundeszentralamt für Steuern 20007-1998. PA 19101-2530.
 116




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##### Table of Contents



Taxation of
    Capital Gains
        Inheritance
    and Gift Tax
    (a)
    the donor or transferor or the heir, donee or other beneficiary
    is resident in Germany at the time of the transfer, or, if a
    German citizen, was not continuously outside of Germany and
    without German residence for more than five years; or(b)
    at the time of the transfer, the shares or ADSs are held by the
    decedent or donor as assets of a business for which a permanent
    establishment is maintained or a permanent representative is
    appointed in Germany; or  (c)
    the decedent or donor has held, alone or together with related
    persons, directly or indirectly, 10 percent or more of a
    companys registered share capital at the time of the
    transfer.    Other
    Taxes
    United States
    Taxation
   117




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##### Table of Contents




    an individual who is a citizen or resident of the United States;
    a corporation, or other entity taxable as a corporation, formed
    under the laws of the United States or any state thereof or the
    District of Columbia; or
    an estate or trust, the income of which is subject to United
    States federal income taxation regardless of its source.    mark-to-market
        Taxation of
    Dividends
   118




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##### Table of Contents



non-United non-United non-United non-United
      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).
 119




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##### Table of Contents



United States
    Gift and Estate Taxes
   Exchange Controls
    and Limitations Affecting Shareholders    http://www.bundesbank.de/finanzsanktionen/finanzsanktionen
      Change of Control
    Provisions
         120




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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
    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.   121




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##### Table of Contents



page F-2 Form 20-F.
  Changes in
    Internal Controls Over Financial Reporting
    Limitations
   Audit Committee
    Financial Expert  Rule 10A-3
 Code of
    Ethics  Form 20-F.
 Principal
    Accountant Fees and Services  Audit Fees.
  Audit-Related Fees.
  Tax Fees.
 122




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##### Table of Contents



All Other Fees.
   Exemptions from
    the Listing Standards for Audit Committees   Material
    Contracts  Form 20-F. Form 20-F
  Commercial
    Agreements
    Related Party
    Transactions
   123




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##### Table of Contents



GLOSSARY  200-millimeter manufacturing, 300-millimeter manufacturing
    
    The size refers to the diameter of the wafers being processed in
    a front-end fab.3G
    
    See UMTS.x-nanometer technology
    
    The size refers to the structure size of the manufacturing
    process used in a front-end fab.A-GPS
    
    Assisted Global Positioning System. GPS uses a network of
    satellites to triangulate a receivers position and provide
    latitude and longitude coordinates. Assisted GPS, or A-GPS, is a
    technology that uses an assistance server to cut down the time
    needed to find the location.ADSL, ADSL2, ADSL2+
    
    Asymmetric Digital Subscriber Line. A form of Digital Subscriber
    Line (see xDSL) in which the bandwidth available for
    downloading data is significantly larger than for uploading
    data. This technology is well suited for web browsing and client
    server applications as well as for emerging applications such as
    video on demand. There are different ADSL standards deployed
    differing in the downstream and upstream rates.analog
    
    A continuous representation of phenomena in terms of points
    along a scale, each point merging imperceptibly into the next.
    Analog signals vary continuously over a range of values. Real
    world phenomena, such as heat and pressure, are analog. See also
    digital.ASIC
    
    Application Specific Integrated Circuit. A logic or mixed-signal
    circuit designed for a specific use and for a specific customer.ASSP
    
    Application Specific Standard Product. A logic or mixed-signal
    circuit designed for a specific application market, and sold to
    more than one customer, and thus, standard.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.Baseband IC
    
    The baseband IC is an essential part of a cell phone. It
    includes a digital signal processor, a microcontroller, some
    on-chip memory, interfaces to several external devices, and
    mixed-signal functionality like coder/decoder for speaker and
    microphone.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.Broadband
    
    Any network technology that combines and sorts multiple,
    independent network frequencies onto a single cable. Commonly
    used to refer to high-bandwidth copper or fiber cables with a
    bandwidth of 1 Mbit per second and above.CAT-iq
    
    Cordless Advanced Technology  internet and quality.
    CAT-iq was created by DECT forum, and allows to the standard
    cordless DECT phones to be used for VoIP. It is a technology
    made to bring together broadband internet and telephony. This
    convergence is also part of the fixed mobile
    convergence. 124




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##### Table of Contents



Chip cards
    
    Cards that contain an IC. Frequently used for telephone cards,
    debit cards, SIM cards, social cards, identification cards and
    PayTV cards.CMOS
    
    Complementary Metal Oxide Substrate technology. A process
    technology that uses complementary MOS transistors (NMOS and
    PMOS) to make a chip that will consume relatively low power and
    permit a high level of integration.CO
    
    Central Office. A common carrier switching office in which
    users lines terminate. The nerve center of a telephone
    system.Contactless chip card
    
    In contrast to contact-based chip cards, contactless chip cards
    communicate with the card reader through induction technology.
    Contactless cards require only close proximity to an antenna to
    complete transaction.CODEC
    
    Coder/Decoder. Hardware used to code and decode digital signals.CPE
    
    Customer Premises Equipment. CPE is telephone or other service
    provider equipment, that is located on the customers
    premises (physical location) rather than on the providers
    premises or in between.DDR2
    
    A memory device with a DDR2 interface and clocked with a
    400 MHz clock.DECT
    
    Digital Enhanced Cordless Telecommunications. A standard used
    for pan-European digital cordless telephones.Digital
    
    The representation of data by a series of bits or discrete
    values such as 0 and 1. See also analog.DIMM
    
    Dual In-line Memory Module. A memory module with contact rows on
    both sides.There are different standards which differ in form
    factor and interface specification.FB-DIMM: Fully Buffered DIMM. Often used in servers and
    workstations.SO-DIMM: Small outline DIMM. Often used in notebooks.Micro-DIMM: Memory module with a small form factor. Often used
    in
    sub-notebooks.VLP-DIMM: Very low-profile DIMM. Often used in server racks.Registered DIMM: Using a register (also called buffer) between
    the memory module and the memory controller. Often used in
    servers and workstations.Discrete semiconductors
    
    Semiconductor devices that involve only a single device like a
    transistor or a diode.DigRF
    
    A digital interface intended for the cellular market. The DigRF
    standard specifies a digital serial interface between the RF
    transceiver and the baseband chip, which replaces the analog
    interface in previous generation mobile handset architectures.DRAM
    
    Dynamic Random Access Memory. The most common type of solid
    state 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 125




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##### Table of Contents



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 a
    widespread memory technology because of its high packing density
    and consequently low price.DSL
    
    See xDSL.DVB-C, DVB-H, DVB-S, DVB-T
    
    Digital Video Broadcasting. There are different standards
    available:
    DVB-C = Digital Video Broadcasting  Cable;
    DVB-H = Digital Video Broadcasting  Handheld;
    DVB-S = Digital Video Broadcasting  Satellite;
    DVB-T = Digital Video Broadcasting  Terrestrial.ECC
    
    Error Correction code. An error-correcting code is an algorithm
    for expressing a sequence of numbers such that any errors which
    are introduced can be detected and corrected (within certain
    limitations) based on the remaining numbers. ECC is used in
    computer systems for data transfer between the CPU and the
    memory as well as in almost any kind of telecommunication
    systems.EDGE
    
    Enhanced Data rate for GSM Evolution. Also referred to as 2.75G,
    where GSM is 2G, GPRS is 2.5G and UMTS is 3G.Embedded DRAM, Embedded flash
    
    A process technology that combines DRAM or flash, respectively,
    and logic functions on a single chip.Ethernet
    
    A protocol for high speed communications, principally used for
    LAN networks.Fab
    
    A semiconductor fabrication facility, in which the front-end
    manufacturing process takes place. (see also
    Front-end.)Flash memory
    
    A type of non-volatile memory that can be erased and
    reprogrammed. See NAND.FlexRay
    
    FlexRay is a new automotive network communications protocol. It
    is positioned above CAN (controller area network) and MOST
    (media oriented systems transport) in terms of both performance
    and price.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.GDDR3, GDDR5
    
    Graphic Double Data Rate. Third or fifth generation,
    respectively.Gigabit (Gbit)
    
    Approximately one billion bits; precisely 2 to the power of 30
    bits.GPRS
    
    General Packet Radio Services. A packet based wireless
    communication service that promises data rates from 56 up to
    114 Kbps and continuous connection to the Internet for
    mobile phone and computer users. GPRS is based on GSM
    communication.GSM
    
    Global System for Mobile communication. A digital mobile
    telephone system that is the de facto wireless telephone
    standard in Europe and widely used in other parts of the world.
    GSM digitizes and compresses data, then sends it down a channel
    with two other streams of user 126




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##### Table of Contents



data, each in its own time slot. It operates at either the
    900 MHz or 1800 MHz frequency band.HSDPA, HSUPA, HSPA, HSxPA
    
    High-Speed Downlink Packet Access, High-Speed Uplink Packet
    Access. HSDPA and HSUPA are 3G (third generation) mobile
    telephony communications protocols in the High-Speed Packet
    Access (HSPA; sometimes referred to as HSxPA) family, which
    allows networks based on Universal Mobile Telecommunications
    System (see also UMTS) to have higher data transfer
    speeds and capacity. Current HSDPA deployments support down-link
    speeds of 1.8 Mbit/s, 3.6 Mbit/s, 7.2 Mbit/s and 14.4
    Mbit/s. HSUPA deployments support up-link speeds of up to 5.76
    Mbit/s.IC
    
    Integrated Circuit. A semiconductor device consisting of many
    interconnected transistors and other components like resistors,
    capacitors and diodes.ISDN
    
    Integrated Services Digital Network. A type of online connection
    that speeds up data transmission by handling information in a
    digital form. Traditional modem communications translate a
    computers digital data into an analog wave form and send
    the signal, which then must be converted back to an analog
    signal. ISDN can be thought of as a direct digital connection.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.LDMOS
    
    Laterally Diffused MOS transistor. LDMOS transistors are widely
    used in RF/microwave power amplifiers for base-stations where
    the requirement is for high output power.MCU
    
    Microcontroller Unit. An MCU is a single chip that contains a
    processor, RAM, ROM, clock and I/O control unit. Hundreds of
    millions of MCUs are used in myriad devices ranging from
    automobiles, industrial applications to consumer electronics.Megabit (Mbit)
    
    Approximately one million bits; precisely 2 to the power of 20
    bits.Memory
    
    Any device that can store data in machine-readable format.Microcontroller
    
    A microprocessor combined with memory and interfaces integrated
    on a single circuit and intended to operate as an embedded
    system.Micron (m)
    
    A metric unit of linear measure which equals one millionth of a
    meter. A human hair is about 100 microns in diameter. There are
    1000 microns in 1 millimeter.Mixed-signal IC
    
    An integrated circuit that includes both analog and digital
    signal processing circuitry on a single semiconductor die.
    Typically, mixed-signal chips perform some whole function of
    sub-function
    in a larger assembly such as the radio subsystem of a cell
    phone. They often contain an entire
    system-on-a-chip.MOSFET
    
    Metal-Oxide-Substrate Field Effect Transistor. A traditional
    metal  oxide  substrate (MOS) structure is
    obtained by depositing a layer of silicon dioxide
    (SiO2;
    referred to as oxide) and a layer of metal 127




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##### Table of Contents



(polycrystalline silicon is commonly used instead of metal) on
    top of the wafer base material (referred to as substrate).The
    MOSFET is a device used to amplify or switch electronic signals.
    It is by far the most common field-effect transistor in both
    digital and analog circuits.NAND
    
    NAND flash architecture is one of two flash technologies (the
    other being NOR) used in memory cards. It is also used in USB
    flash drives, MP3 players, and provides the image storage for
    digital cameras. NAND is best suited to flash devices requiring
    high capacity data storage.Nanometer (nm)
    
    A metric unit of linear measure which equals one billionth of a
    meter. There are 1000 nanometers in 1 micron.Non-volatile memory
    
    A memory storage device whose contents are preserved when its
    power is off. Most common types are NAND flash and NOR flash.ODM
    
    Original Device Manufacturer. A company which manufactures a
    product which ultimately will be branded by another firm for
    sale.OHSAS
    
    Occupational Health and Safety Assessment Series. The discipline
    concerned with protecting the safety, health and welfare of
    employees, organizations, and others affected by the work they
    undertake (such as customers, suppliers, and members of the
    public).PBX
    
    Private Branch eXchange. A telephone exchange that is owned by a
    private business, as opposed to one owned by a common carrier or
    by a telephone company.PDA
    
    Personal Digital Assistant. A term used to refer to any small
    mobile hand-held device that provides computing and information
    storage and retrieval capabilities for personal or business use,
    often for keeping schedule calendars and address book
    information handy.PFC
    
    Perfluorinated Compounds. Compounds derived from hydrocarbons by
    replacement of hydrogen atoms by fluorine atoms.PHY
    
    Physical Layer. A part of the electrical or mechanical interface
    to the physical medium. For example, the PHY determines how to
    put a stream of bits from the upper (data link) layer on to the
    pins for a parallel printer interface or network line card.RAM
    
    Random access memory. A type of data storage device for which
    the order of access to different locations does not affect the
    speed of access. This is in contrast to, for example, a magnetic
    disk or magnetic tape where it is much quicker to access data
    sequentially because accessing a non sequential location
    requires physical movement of the storage medium rather than
    electronic switching.REACH
    
    Registration, Evaluation and Authorization of Chemicals. A
    framework for regulation of chemicals in the European Union.RF transceiver
    
    Radio-frequency transceiver. A high-frequency used in mobile
    telecommunications. The term radio frequency refers to
    electromagnetic waves having characteristics such that, if the
    current is input to an antenna, an electromagnetic field is
    generated suitable for wireless broadcasting and/or
    communications. 128




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RFID
    
    Radio frequency identification. Systems that read or write data
    to RF tags that are present in a radio frequency field projected
    from RF reading/writing equipment. Data may be contained in one
    or more bits for the purpose of providing identification and
    other information relevant to the object to which the tag is
    attached. It incorporates the use of electromagnetic, or
    electrostatic coupling in the radio frequency portion of the
    spectrum to communicate to or from a tag through a variety of
    modulation schemes.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 flow or not flow in a pattern.
    The most common semiconductor material for use in integrated
    circuits is silicon.Server
    
    A computer that provides some 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 the most widely used semiconductor material in the
    semiconductor industry (other than Germanium) as a base material.SIM card
    
    Subscriber identification module card. Used in mobile handsets
    for subscriber authentication.SLIC
    
    Subscriber line interface circuit. A circuit in a telephone
    company switch to which a customers telephone line is
    connected.SO-DIMM
    
    Small-Outline Dual In-line Memory Module. See also
    DIMM.SoC
    
    System-on-a-chip.
    The packaging of all the necessary electronic circuit and parts
    for a system (such as a cell phone or digital
    camera) on a single IC.SRAM
    
    Static RAM. A type of memory that is more expensive and much
    faster than DRAM but has much lower power consumption than DRAM.
    SRAM are used in cell phones because of low power consumption
    and in PCs as a fast first-level memory buffer.Structure size
    
    A measurement (generally in micron or nanometer) of the width of
    the smallest patterned feature on a semiconductor chip.T/E
    
    T1/E1, T3/E3. A data transmission technology based on copper
    wires. Various speed classes are available: T1: 1,544 Mbit/s;
    E1:
    2,048 Mbit/s;
    T3: 44,736 Mbit/s; E3: 34,368 Mbit/s. The T standards are
    prevalent in NAFTA. The E standards are European standards.Telematics
    
    The combination of telecommunications and data processing.UMTS
    
    Universal Mobile Telecommunications Service. A so-called
    third-generation (3G),
    broadband, packet based transmission of text, digitized voice,
    video, and multimedia at data rates up to two megabits per
    second (Mbps), that is based on the GSM communication standard.
    UMTS aims to offer a consistent set of services to mobile
    computer and phone users no matter where they are located in the
    world. 129




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##### Table of Contents



VDSL
    
    Very high bit-rate Digital Subscriber Line. A form of digital
    subscriber line similar to ADSL but providing higher speeds at
    reduced distances. See also xDSL.VoIP
    
    Voice Over Internet Protocol. The routing of voice conversations
    over the Internet or any other
    IP-based
    network.Wafer
    
    A disk made of a semiconducting material such as silicon,
    currently usually either 150-millimeters or 200-millimeters or
    300-millimeters in diameter, used to form the substrate of a
    chip. A finished wafer may contain several thousand chips.WDCT
    
    Worldwide Digital Cordless Telecommunications.xDSL
    
    Digital Subscriber Line (where x represents the type
    of technology, e.g. ADSL, VDSL, SHDSL). A family of digital
    telecommunications protocols designed to allow high speed data
    communication over existing copper telephone lines between
    end-users and the telephone company. See also ADSL
    and VDSL.Yield
    
    When used in connection with manufacturing, the ratio of the
    number of usable products to the total number of produced
    products. 130




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##### Table of Contents



INFINEON
    TECHNOLOGIES AG AND SUBSIDIARIES
    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Prepared in accordance with US.
    GAAP PageReport of Independent Registered Public Accounting Firm


F-2Consolidated Statements of Operations for the years ended 
    September 30, 2006, 2007 and 2008


F-3Consolidated Balance Sheets as of September 30, 2007 and
    2008


F-4Consolidated Statements of Shareholders Equity for the
    years ended
    September 30, 2006, 2007 and 2008


F-5Consolidated Statements of Cash Flows for the years ended
    September 30, 2006, 2007 and 2008


F-6Notes to the Consolidated Financial Statements


F-7  F-1




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM    Internal ControlIntegrated Framework
      Internal ControlIntegrated Framework
  
   
 F-2




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
    Consolidated Statements of Operations
    For the years ended September 30, 2006, 2007 and 2008
    (in millions, except for share data)  September 30,


September 30,


September 30,


September 30,Notes


2006


2007


2008


2008( millions)


( millions)


( millions)


($ millions)(unaudited)Net sales






4,114



4,074



4,321



6,084Cost of goods sold


7



2,805



2,702



2,823



3,975Gross profit






1,309



1,372



1,498



2,109Research and development expenses






816



768



755



1,063Selling, general and administrative expenses






520



500



569



801Restructuring charges


8



23



45



181



255Other operating expense (income), net


7



36



(20
)


43



61Operating (loss) income






(86
)


79



(50
)


(71
)Interest expense, net






(67
)


(40
)


(26
)


(37
)Equity in earnings (losses) of associated companies, net


16



(2
)






4



6Other non-operating (expense) income, net






(41
)


7



(16
)


(23
)Minority interests


25



(7
)


(14
)


14



20(Loss) income before income taxes, discontinued operations, and
    extraordinary loss






(203
)


32



(74
)


(105
)Income tax expense


9



(47
)


(69
)


(61
)


(85
)Loss from continuing operations






(250
)


(37
)


(135
)


(190
)Loss from discontinued operations, net of tax


4



(18
)


(296
)


(2,987
)


(4,206
)Loss before extraordinay loss






(268
)


(333
)


(3,122
)


(4,396
)Extraordinary loss, net of tax


3







(35
)






Net loss






(268
)


(368
)


(3,122
)


(4,396
)Basic and diluted loss per share from continuing operations


10



(0.34
)


(0.05
)


(0.18
)


(0.25
)Basic and diluted loss per share from discontinued operations,
    net of tax


10



(0.02
)


(0.40
)


(3.98
)


(5.60
)Basic and diluted loss per share for extraordinary loss, net of
    tax










(0.04
)






Basic and diluted loss per share






(0.36
)


(0.49
)


(4.16
)


(5.86
)     F-3




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
    Consolidated Balance Sheets
    September 30, 2007 and 2008  September 30,


September 30,


September 30,Notes


2007


2008


2008( millions)


( millions)


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






1,073



749



1,055Marketable securities


11



210



143



201Trade accounts receivable, net


12



620



589



829Inventories


13



598



663



934Deferred income taxes


9



34



26



37Other current assets


14



303



379



534Assets held for disposal


4



5,653



2,224



3,131Total current assets






8,491



4,773



6,721Property, plant and equipment, net


15



1,462



1,311



1,846Intangible assets, net


18



89



362



510Long-term investments


16



24



33



46Restricted cash






77



77



108Deferred income taxes


9



446



402



566Pension assets


31



4



16



23Other assets


17



160



109



154Total assets






10,753



7,083



9,974Liabilities and shareholders equity:Current liabilities:Short-term debt and current maturities


22



260



207



291Trade accounts payable


19



596



488



687Accrued liabilities


20



379



410



577Deferred income taxes


9



10



12



17Other current liabilities


21



326



435



612Liabilities held for disposal






1,897



2,091



2,945Total current liabilities






3,468



3,643



5,129Long-term debt


22



1,149



1,051



1,480Pension liabilities


31



36



41



58Deferred income taxes


9



23



3



4Long-term accrued liabilities


23



22



24



34Other liabilities


24



108



100



141Total liabilities






4,806



4,862



6,846Minority interests


25



1,033



457



644Shareholders equity:Ordinary share capital


26



1,499



1,499



2,111Additional paid-in capital






5,864



5,872



8,268Accumulated deficit






(2,148
)


(5,274
)


(7,426
)Accumulated other comprehensive loss


28



(301
)


(333
)


(469
)Total shareholders equity






4,914



1,764



2,484Total liabilities and shareholders equity






10,753



7,083



9,974    F-4




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
    Consolidated Statements of Shareholders Equity
    For the years ended September 30, 2006, 2007 and 2008
    (in millions of Euro, except for share data)  AdditionalminimumpensionForeign


liability/


Unrealized


UnrealizedIssued


Additional





currency


Defined


gains (loss)


gains (losses) onOrdinary shares


paid-in


Accumulated


translation


benefit


on


cash flowNotes


Shares


Amount


capital


deficit


adjustment


plans


securities


hedges


TotalBalance as of October 1, 2005






747,569,359



1,495



5,800



(1,512
)


(58
)


(84
)


12



(24
)


5,629Net loss


















(268
)


















(268
)Other comprehensive income (loss)


29



















(69
)


(3
)


(7
)


5



(74
)Total comprehensive loss






































(342
)Issuance of ordinary shares:Exercise of stock options


27



39,935































Stock-based compensation


26











28























28Balance as of September 30, 2006






747,609,294



1,495



5,828



(1,780
)


(127
)


(87
)


5



(19
)


5,315Net loss


















(368
)


















(368
)Other comprehensive (loss) income


29



















(105
)


90



(12
)


2



(25
)Total comprehensive loss






































(393
)Issuance of ordinary shares:Exercise of stock options


28



2,119,341



4



15























19Stock-based compensation


28











17























17Deferred compensation, net














4























4Adjustment to initially apply SFAS 158, net of tax


32























(48
)










(48
)Balance as of September 30, 2007






749,728,635



1,499



5,864



(2,148
)


(232
)


(45
)


(7
)


(17
)


4,914Net loss


















(3,122
)


















(3,122
)Other comprehensive (loss) income






















(36
)


12



(6
)


(2
)


(32
)Total comprehensive loss






































(3,154
)Issuance of ordinary shares:Exercise of stock options






13,450































Stock-based compensation














8























8Deferred compensation, net Adjustment to initially apply
    FIN 48


















(4
)


















(4
)Balance as of September 30, 2008






749,742,085



1,499



5,872



(5,274
)


(268
)


(33
)


(13
)


(19
)


1,764     F-5




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
    Consolidated Statements of Cash Flows
    For the years ended September 30, 2006, 2007 and
    2008  2006


2007


2008


2008( millions)


( millions)


( millions)


($ millions)(unaudited)Net loss


(268
)


(368
)


(3,122
)


(4,396
)Less: Net loss from discontinued operations


18



296



2,987



4,206Adjustments to reconcile net loss to cash provided by operating
    activities:Depreciation and amortization


702



609



542



763Acquired in-process research and development










14



20Recovery of doubtful accounts


21



(13
)


3



4Loss (gains) on sales of marketable securities


(3
)


(7
)


1



1Gains on sales of businesses and interests in subsidiaries






(19
)


(79
)


(111
)Gains on disposals of property, plant and equipment


(8
)


(10
)


(4
)


(6
)Equity in losses (earnings) of associated companies


2







(4
)


(6
)Minority interests


7



14



(14
)


(20
)Impairment charges


48



40



135



190Stock-based compensation


19



12



5



7Deferred income taxes


(29
)


42



27



38Changes in operating assets and liabilities:Trade accounts receivable


44



(46
)


39



55Inventories


2



(59
)


(46
)


(65
)Other current assets


107



(16
)


17



24Trade accounts payable


61



(95
)


(77
)


(108
)Accrued liabilities


20



(9
)


49



69Other current liabilities


(34
)


(89
)


50



70Other assets and liabilities


(32
)


(55
)


12



18Net cash provided by operating activities from continuing
    operations


677



227



535



753Net cash provided by (used in) operating activities from
    discontinued operations


326



980



(659
)


(928
)Net cash provided by (used in) operating activities


1,003



1,207



(124
)


(175
)Cash flows from investing activities:Purchases of marketable securities available for sale


(317
)


(75
)


(574
)


(808
)Proceeds from sales of marketable securities available for sale


693



341



601



846Proceeds from sales of businesses and interests in subsidiaries


71



246



122



172Business acquisitions, net of cash acquired






(45
)


(353
)


(497
)Investment in associated and related companies


117



(1
)






(142
)Purchases of intangible assets, and other assets


(3
)


(14
)


(115
)


(20
)Purchases of property, plant and equipment


(640
)


(498
)


(312
)


(439
)Proceeds from sales of property, plant and equipment


27



26



11



15Net cash used in investing activities from continuing operations


(52
)


(20
)


(620
)


(873
)Net cash provided by (used in) investing activities from
    discontinued operations


(801
)


(847
)


4



6Net cash used in investing activities


(853
)


(867
)


(616
)


(867
)Cash flows from financing activities:Net change in short-term debt


163



(1
)


(68
)


(96
)Net change in related party financial receivables and payables


8



347



(5
)


(7
)Proceeds from issuance of long-term debt


356



245



149



210Principal repayments of long-term debt


(56
)


(744
)


(226
)


(318
)Change in restricted cash


10



1







Proceeds from issuance of ordinary shares






23







Proceeds from issuance of shares to minority interest


(9
)










Dividend payments to minority interests






(71
)


(80
)


(113
)Capital contributions


(483
)


(14
)






Net cash used in financing activities from continuing operations


(11
)


(214
)


(230
)


(324
)Net cash provided by (used in) financing activities from
    discontinued operations


773



(307
)


337



475Net cash provided by (used in) financing activities


762



(521
)


107



151Net increase (decrease) in cash and cash equivalents


912



(181
)


(633
)


(891
)Effect of foreign exchange rate changes on cash and cash
    equivalents


(20
)


(40
)


(5
)


(6
)Cash and cash equivalents at beginning of year


1,148



2,040



1,819



2,560Cash and cash equivalents at end of year


2,040



1,819



1,181



1,663Less: Cash and cash equivalents at end of year from discontinued
    operations


932



746



432



608Cash and cash equivalents at end of year from continuing
    operations


1,108



1,073



749



1,055    F-6




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
 Notes to the Consolidated Financial Statements
  1.
    Description of
    Business and Basis of Presentation  Description of
    Business
    Basis of
    Presentation
  Handelsgesetzbuch
      2.
    Summary of
    Significant Accounting Policies   F-7




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   Basis of
    Consolidation
        Consolidated


Associatedentities


companies


TotalSeptember 30, 2007


69



5



74Additions


6



4



10Disposals


(1
)


(1
)


(2
)September 30, 2008


74



8



82   Reporting and
    Foreign Currency
        Exchange Rate


Annual averageSeptember 28,


September 29,


exchange rateCurrency:

2007


2008


2007


2008U.S. dollar


1.4180



1.4349



1.3339



1.5052Japanese yen


163.2900



152.3000



158.7997



161.6773  F-8




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   Segment
    Reporting
    Revenue
    Recognition
  Sales
  Revenue Recognition
    case-by-case
  License
    Income
  No. 00-21, Revenue Arrangements with Multiple
    Deliverables
 F-9




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   Grants
      Product-related
    Expenses
    Income
    Taxes
  Accounting for Income
    Taxes
  Accounting for Uncertainty
    in Income Taxes  an Interpretation of FASB Statement
    No. 109
  Accounting for Contingencies
  Share-based
    Compensation
   F-10




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   Share-Based Payment
  Issuance of
    shares by Subsidiaries or Associated Companies
  Accounting for Sales of Stock by a
    Subsidiary
  Cash and Cash
    Equivalents
    Restricted
    Cash
    Marketable
    Securities and Investments
      Inventories
    Property,
    Plant and Equipment
   F-11




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     YearsBuildings


10-25Technical equipment and machinery


3-10Other plant and office equipment


1-10   Leases
  Accounting for Leases
  Goodwill and
    Other Intangible Assets
  Business
    Combinations
  Goodwill and Other Intangible Assets
  Impairment of
    Long-lived Assets
    Financial
    Instruments
   F-12




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   Accounting for Derivative
    Instruments and Hedging Activities
  Pension
    Plans
  projected-unit-credit Employers Accounting for Pensions Employers
    Accounting for Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB Statements No. 87,
    88, 106, and 132(R)
      Discontinued
    Operations
    Use of
    Estimates
   F-13




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     3.
    Acquisitions  Consolidation of Variable Interest
    Entities  an interpretation of ARB
    No. 51
       F-14




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2007


2008


2008CPE


LSI


PrimarionAcquisition Date

July 2007


October 2007


April 2008Automotive,Communication


Communication


Industrial &Segment

Solutions


Solutions


Multimarket( in millions)Other current assets


6



19



1Property, plant and equipment


1



8



1Intangible assets:Technology






42



13Customer relationships






73



Other


7



6



Goodwill


31



160



11Other non-current assets










7Total assets acquired


45



308



33Current liabilities






(1
)


(1
)Total liabilities assumed






(1
)


(1
)Net assets acquired


45



307



32In-process research & development






14



Cash paid (purchase consideration)


45



321



32       4.
    Divestitures and
    Discontinued Operations  Polymer
    Optical Fiber
    High Power
    Bipolar Business
   F-15




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     Hard Disk
    Drive Business
    BAW
    Business
    Qimonda
    over-allotment
 F-16




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
       Accounting
    for the Impairment or Disposal of Long-lived Assets
         F-17




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
       30-day 12-month
  ALTIS
   F-18




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     September 30,


September 30,2007


2008( in millions)Cash and cash equivalents


746



432Marketable securities


265



Trade accounts receivable, net


397



180Inventories


659



289Property, plant and equipment, net


2,350



2,059Long-term investments


628



16Other assets


608



551Subtotal


5,653



3,527Write-down






(1,303
)Total assets classified as held for disposal


5,653



2,224Short-term debt and current maturities


128



346Trade accounts payable


780



533Accrued liabilities


147



219Long-term debt


227



427Other liabilities


615



566Total liabilities held for disposal


1,897



2,091     2006


2007


2008( in millions)Net sales


3,815



3,608



1,785Costs and expenses


(3,719
)


(3,894
)


(3,324
)Loss on measurement to fair value less costs to sell










(1,303
)Income (loss) from discontinued operations, before tax


96



(286
)


(2,842
)Income tax expense


(114
)


(10
)


(145
)Loss from discontinued operations, net of tax


(18
)


(296
)


(2,987
)  F-19




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2006


2007


2008( in millions)Sales:POF


26



14



Bipolar


72



78



HDD


107



124



50BAW


29



10



11Total


234



226



61EBIT:POF


(1
)


(6
)


Bipolar


5



(1
)


HDD


19



20



11BAW


8



(8
)


(4
)Total


31



5



7Gain on sale before tax:POF






17



Bipolar










27HDD










41BAW










11Other






3



Total






20



79   5.
    Licenses    6.
    Grants    2006

2007

2008( in millions)Included in the consolidated statements of operations:Research and development


49


91


62Cost of sales


5


31


2654


122


88  F-20




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     7.
    Supplemental
    Operating Cost Information    2006

2007

2008( in millions)Raw materials, supplies and purchased goods


852


790


813Purchased services


912


776


822Total


1,764


1,566


1,635     2006

2007

2008( in millions)Wages and salaries


1,316


1,317


1,475Social levies


223


237


242Pension expense (note 31)


31


34


17Total


1,570


1,588


1,734     2006


2007


2008( in millions)Gains on sales of businesses and interests in subsidiaries






19



79Goodwill and intangible assets impairment charges


(32
)


(2
)


(8
)Long-lived asset impairment charges


(4
)


(4
)


(122
)Litigation settlement charges, net of recoveries (note 34)


(7
)






Other


7



7



8Other operating (expense) income, net


(36
)


20



(43
)      F-21




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2006

2007

2008Germany


11,384


10,553


10,085Other Europe


5,872


5,604


5,280North America


601


540


845Asia/Pacific


12,009


12,905


13,094Japan


156


151


161Other


41


21


Infineon


30,063


29,774


29,465Qimonda


11,003


12,775


12,990Total


41,066


42,549


42,455   8.
    Restructuring            September 30,








September 30,2007


Restructuring





2008Liability


Charges, net


Payments


Liability( in millions)Employee terminations


38



170



(36
)


172Other exit costs


6



11



(7
)


10Total


44



181



(43
)


182  F-22




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   9.
    Income
    Taxes    2006


2007


2008( in millions)Germany


(318
)


(150
)


(208
)Foreign


122



196



120Income (loss) from continuing operations before income taxes,
    extraordinary loss, and minority interest


(196
)


46



(88
)     2006


2007


2008( in millions)Current taxes:Germany


63



24



3Foreign


13



3



3176



27



34Deferred taxes:Germany


(42
)


40



64Foreign


13



2



(37
)(29
)


42



27Income tax expense


47



69



61     2006


2007


2008( in millions)Income tax expense


47



69



61Shareholders equity, for other comprehensive loss (income)






2



(1
)47



71



60      F-23




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2008( in millions)Balance as of October 1, 2007


138Additions based on tax positions related to the current year


1Additions for tax positions of prior years


124Reductions for tax positions of prior years


(2
)Settlements


Balance as of September 30, 2008


261           2006


2007


2008( in millions)Expected expense (benefit) for income taxes


(76
)


17



(25
)Increase in available tax credits


(38
)


(7
)


(103
)Non-taxable investment income


(4
)


(3
)


Tax rate differential


(12
)


(59
)


(10
)Non deductible expenses


7



24



8Change in German tax rate


3



28



Increase in valuation allowance


161



58



185Other


6



11



6Actual provision for income taxes


47



69



61    F-24




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2007


2008( in millions)Deferred tax assets:Intangible assets


13



8Property, plant and equipment


134



152Deferred income


13



12Net operating loss and tax credit carry-forwards


1,131



1,199Other items


179



210Gross deferred tax assets


1,470



1,581Valuation allowance


(846
)


(1,013
)Deferred tax assets, net


624



568Deferred tax liabilities:Property, plant and equipment


(34
)


(24
)Accounts receivable


(26
)


(23
)Accrued liabilities and pensions


(110
)


(103
)Other items


(7
)


(5
)Deferred tax liabilities


(177
)


(155
)Deferred tax assets, net


447



413     2007


2008( in millions)Deferred tax assets:Current


34



26Non-current


446



402Deferred tax liabilities:Current


(10
)


(12
)Non-current


(23
)


(3
)Deferred tax assets, net


447



413      F-25




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
       2007


2008( in millions)Balance, beginning of the year


1,017



846Applicable to continuing operations


58



185Change in tax rate


(264
)


Adjustment in corresponding net operating loss carry-forward


35



(18
)Balance, end of the year


846



1,013         10.
    Earnings (Loss)
    Per Share   F-26




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2006


2007


2008Numerator ( in millions):Loss from continuing operations


(250
)


(37
)


(135
)Loss from discontinued operations, net of tax


(18
)


(296
)


(2,987
)Loss before extraordinary loss


(268
)


(333
)


(3,122
)Extraordinary loss, net of tax






(35
)


Net loss


(268
)


(368
)


(3,122
)Denominator (shares in millions):Weighted-average shares outstanding  basic and diluted


747.6



748.6



749.7Basic and diluted loss per share (in ):Loss from continuing operations


(0.34
)


(0.05
)


(0.18
)Loss from discontinued operations, net of tax


(0.02
)


(0.40
)


(3.98
)Loss before extraordinary loss


(0.36
)


(0.45
)


(4.16
)Extraordinary loss, net of tax






(0.04
)


Net loss


(0.36
)


(0.49
)


(4.16
)    F-27




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   11.
    Marketable
    Securities    2007


2008Fair


Unrealized


Unrealized





Fair


Unrealized


UnrealizedCost


Value


Gains


Losses


Cost


Value


Gains


Losses( in millions)Foreign government securities


8



10



2







5



7



2



Floating rate notes






























Fixed term deposits


220



211







(9
)


159



149



1



(11
)Other debt securities


15



18



3



















Total debt securities


243



239



5



(9
)


164



156



3



(11
)Equity securities


4



5



1







2



2







Total marketable securities


247



244



6



(9
)


166



158



3



(11
)Reflected as follows:Marketable securities


219



210







(9
)


154



143







(11
)Other assets (note 17)


28



34



6







12



15



3



Total marketable securities


247



244



6



(9
)


166



158



3



(11
)       2006


2007


2008( in millions)Realized gains


3



7



Realized losses










(1
)Realized gains (losses), net


3



7



(1
)       Cost


Fair Value( in millions)Less than 1 year


5



6Between 1 and 5 years


94



84More than 5 years


65



66Total debt securities


164



156    F-28




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   12.
    Trade Accounts
    Receivable, net    2007


2008( in millions)Third party  trade


583



590Associated and Related Companies  trade


68



28Trade accounts receivable, gross


651



618Allowance for doubtful accounts


(31
)


(29
)Trade accounts receivable, net


620



589     2007


2008( in millions)Allowance for doubtful accounts at beginning of year


45



31Recovery of bad debt, net


(14
)


(2
)Allowance for doubtful accounts at end of year


31



29   13.
    Inventories    2007


2008( in millions)Raw materials and supplies


59



59Work-in-process


354



372Finished goods


185



232Total Inventories


598



663   14.
    Other Current
    Assets    2007


2008( in millions)VAT and other tax receivables


87



95Grants receivable (note 6)


25



25Associated and Related Companies  financial and other
    receivables


79



23Third party  financial and other receivables


22



17Receivable from German banks deposit protection fund






121Financial instruments (note 32)


27



10Prepaid expenses


30



44License fees receivable


2



10Employee receivables


5



8Other


26



26Total other current assets


303



379  F-29




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     15.
    Property, Plant
    and Equipment, net    Technicalequipment


Other plantLand and


and


and office


Constructionbuildings


machinery


equipment


in progress


Total( in millions)Cost:September 30, 2007


687



4,655



1,416



144



6,902Additions


19



189



63



50



321Impairments






(23
)










(23
)Disposals


(19
)


(158
)


(109
)


(1
)


(287
)Reclassifications


7



115



13



(135
)


Transfers(1)


18



27



(7
)


6



44Foreign currency effects


1



7



(1
)






7September 30, 2008


713



4,812



1,375



64



6,964Accumulated depreciation:September 30, 2007


(440
)


(3,733
)


(1,267
)






(5,440
)Depreciation


(29
)


(365
)


(103
)






(497
)Disposals


19



149



105







273Reclassifications






(2
)


2







Transfers(1)






9



8







17Foreign currency effects






(7
)


1







(6
)September 30, 2008


(450
)


(3,949
)


(1,254
)






(5,653
)Book value September 30, 2007


247



922



149



144



1,462Book value September 30, 2008


263



863



121



64



1,311   (1)
    
    Amounts shown as transfers in the
    year ended September 30, 2008 relate primarily to assets of
    the ALTIS disposal group that were reclassified into held and
    used. F-30




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
    16.
    Long-term
    Investments      Investment in


Investment inAssociated


RelatedCompanies


Companies


Total( in millions)Balance at September 30, 2006






23



23Additions






1



1Disposals






(3
)


(3
)Impairments






(2
)


(2
)Reclassifications






5



5Balance at September 30, 2007






24



24Additions


21



1



22Disposals


(7
)


(3
)


(10
)Impairments






(2
)


(2
)Equity in earnings


4







4Reclassifications






(5
)


(5
)Balance at September 30, 2008


18



15



33           2006


2007


2008( in millions)Sales


9



6



95Gross profit


7



3



20Net income (loss)


(6
)


1



6   F-31




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   2006


2007


2008( in millions)Current assets


5







58Non-current assets


4



5



11Current liabilities


(12
)






(28
)Non-current liabilities






(3
)


(6
)Shareholders equity


(3
)


2



35   17.
    Other
    Assets    2007


2008( in millions)Deferred tax charges (note 9)


50



41Marketable securities (note 11)


34



15Long-term receivables


19



21Employee receivables


1



1Associated and Related Companies  financial and other
    receivables


41



20Other


15



11Total


160



109  F-32




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   18.
    Intangible
    Assets    OtherGoodwill


Intangibles


Total( in millions)Cost:September 30, 2006


29



357



386Additions


31



19



50Impairment charges






(2
)


(2
)Disposals


(6
)


(45
)


(51
)Foreign currency effects


(1
)


(3
)


(4
)September 30, 2007


53



326



379Additions


171



148



319Impairment charges






(5
)


(5
)Transfers(1)






2



2Foreign currency effects


1







1September 30, 2008


225



471



696Accumulated amortization:September 30, 2006






(299
)


(299
)Amortization






(34
)


(34
)Disposals






40



40Foreign currency effects






3



3September 30, 2007






(290
)


(290
)Amortization






(45
)


(45
)Disposals






1



1September 30, 2008






(334
)


(334
)Carrying value September 30, 2006


29



58



87Carrying value September 30, 2007


53



36



89Carrying value September 30, 2008


225



137



362   (1)
    
    Amounts shown as transfers in the
    year ended September 30, 2008 relate primarily to assets of
    the ALTIS disposal group that were reclassified into held and
    used.       F-33




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
       19.
    Trade Accounts
    Payable    2007


2008( in millions)Third party  trade


527



473Associated and Related Companies  trade


69



15Total


596



488   20.
    Accrued
    Liabilities    2007


2008( in millions)Personnel costs


284



327Warranties and licenses


41



32Other


54



51Total


379



410     2008( in millions)Balance as of September 30, 2007


41Accrued during the year


16Settled or released during the year


(25
)Balance as of September 30, 2008


32  F-34




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   21.
    Other Current
    Liabilities    2007


2008( in millions)Deferred income


37



26VAT and other taxes payable


82



100Obligations to employees


90



197Deferred government grants (note 6)


20



17Financial instruments (note 32)


34



25Interest


19



16Settlement for anti-trust related matters (note 34)


20



20Associated and Related Companies  financial and other
    payables


12



6Other


12



28Total


326



435     22.
    Debt    2007


2008( in millions)Short-term debt and current maturities:Loans payable to banks, weighted average rate 5.1%


127



139Current portion of long-term debt


133



68Total short-term debt and current maturities


260



207Long-term debt:Exchangeable subordinated notes, 1.375%, due 2010


215



215Convertible subordinated notes, 5.0%, due 2010


695



597Loans payable to banks:Unsecured term loans, weighted average rate 4.82%,
    due 2009  2013


214



217Secured term loans, weighted average rate 2.45%, due 2013


4



2Notes payable to governmental entity, due 2010


21



20Total long-term debt


1,149



1,051      F-35




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
          F-36




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     Nature of financial



As of September 30, 2008Institution

Purpose/intended

AggregateTerm

Commitment

use

facility


Drawn


Available( in millions)Short-term

firm commitment

general corporate purposes, working capital, guarantees


504



139



365Short-term

no firm commitment

working capital,  cash management


176







176Long-term(1)

firm commitment

project finance


307



307



Total






987



446



541   (1)
    
    Including current maturities.        Fiscal year ending September 30,

Amount( in millions)2009


2072010


8612011


822012


682013


40Total


1,258   23.
    Long-term Accrued
    Liabilities    2007


2008( in millions)Asset retirement obligations


13



9Post-retirement benefits


3



3Personnel costs


6



7Other






5Total


22



24  F-37




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   24.
    Other
    Liabilities    2007


2008( in millions)Deferred income


30



43Deferred government grants (note 6)


17



14Settlement for antitrust related matters (note 34)


37



17Deferred compensation


13



11Other


11



15Total


108



100   25.
    Minority
    Interest      26.
    Ordinary Share
    Capital    Authorized and
    Conditional Share Capital
    
    Through January 19, 2009, Authorized Share Capital
    II/2004  in an aggregate nominal amount of up to
    30 million to issue shares to employees (in which
    case the pre-emptive rights of existing shareholders are
    excluded).
    Through February 14, 2012, Authorized Share Capital
    2007  in an aggregate nominal amount of up to
    224 million to issue shares for cash, where the
    pre-emptive rights of shareholders may be F-38




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   partially excluded, or in connection with business combinations
    (contributions in kind), where the pre-emptive rights of
    shareholders may be excluded for all shares.          Dividends
  Aktiengesetz Bilanzgewinn
  Bilanzverlust
    27.
    Share-based
    Compensation     F-39




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
               Weighted-


Weighted-average


average


AggregatedNumber of


exercise


remaining life


Intrinsicoptions


price


(in years)


ValueOutstanding at September 30, 2007


39.4



16.17



2.99



66Granted






Exercised






Forfeited and expired


(6.2
)


37.44Outstanding at September 30, 2008


33.2



12.30



2.28



Vested and expected to vest, net of estimated forfeitures at
    September 30, 2008


30.6



12.32



2.28



Exercisable at September 30, 2008


26.5



12.89



1.83



    F-40




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     Weighted-Weighted-


average


AggregatedNumber of


average


remaining life


Intrinsicoptions


grant date fair value


(in years)


ValueUnvested at September 30, 2007


13.6



3.50



4.77



35Granted






Vested


(6.5
)


4.04Forfeited


(0.4
)


3.23Unvested at September 30, 2008


6.7



2.96



4.05



Unvested options expected to vest


4.1



3.30



4.03



           2006


2007Weighted-average assumptions:Risk-free interest rate


3.08
%


3.91
%Expected volatility, underlying shares


43
%


40
%Expected volatility, SOX index






36
%Forfeiture rate, per year






3.40
%Dividend yield


0
%


0
%Expected life in years


5.07



3.09Weighted-average fair value per option at grant date in 


3.19



2.03    F-41




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   Share-Based
    Compensation Expense
    2006


2007


2008( in millions)Compensation expense recognized:Cost of goods sold


6



2



1Selling, general and administrative expenses


11



6



3Research and development expenses


8



4



1Total share-based compensation expense


25



12



5Share-based compensation effect on basic and diluted loss per
    share in 


(0.03
)


(0.02
)


(0.01
)     28.
    Other
    Comprehensive Loss    2006


2007


2008Tax








Tax








TaxPretax


effect


Net


Pretax


effect


Net


Pretax


effect


Net( in millions)Unrealized (losses) gains on securities:Unrealized holding (losses) gains


(4
)






(4
)


(6
)






(6
)


(8
)






(8
)Reclassification adjustment for losses (gains) included in net
    income or loss


(3
)






(3
)


(7
)


1



(6
)


2







2Net unrealized (losses) gains, net


(7
)






(7
)


(13
)


1



(12
)


(6
)






(6
)Unrealized gains (losses) on cash flow hedges


5







5



2







2



(2
)






(2
)Additional minimum pension liability/Defined benefit plans


(3
)






(3
)


95



(5
)


90



12







12Foreign currency translation adjustment


(69
)






(69
)


(105
)






(105
)


(36
)






(36
)Other comprehensive loss


(74
)






(74
)


(21
)


(4
)


(25
)


(32
)






(32
)  F-42




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   29.
    Supplemental Cash
    Flow Information  2006


2007


2008( in millions)Cash paid for:Interest


109



93



62Income taxes


71



80



16Non-cash investing activities:Molstanda (note 3)






(41
)


Non-cash financing activities:Molstanda (note 3)






76



   30.
    Related
    Parties  mark-up.
              31.
    Pension
    Plans   F-43




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
           Adjustments toBefore adoption of


initially apply


After adoption ofSFAS No. 158


SFAS No. 158


SFAS No. 158( in millions)Prepaid pension costs


56



(56
)


Current deferred income taxes






(1
)


(1
)Intangible asset


1



(1
)


Non-current pension asset






4



4Current pension liability










Pension liabilities


(42
)


6



(36
)Accumulated other comprehensive loss, net of tax


(3
)


48



45  F-44




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2006


2007


2008Domestic


Foreign


Domestic


Foreign


Domestic


Foreignplans


plans


plans


plans


plans


plans( in millions)Accumulated benefit obligation end of year


(337
)


(58
)


(325
)


(44
)


(288
)


(44
)Change in projected benefit obligation:Projected benefit obligation beginning of year


(333
)


(79
)


(390
)


(71
)


(342
)


(73
)Service cost


(18
)


(4
)


(20
)


(4
)


(16
)


(3
)Interest cost


(15
)


(4
)


(18
)


(4
)


(18
)


(4
)Actuarial gains (losses)


(10
)


7



79



(1
)


60



(1
)Divestitures










2







4



Plan additions and amendments


















1



(1
)Benefits paid


3



2



5



3



5



1Plan transfers to Qimonda


(17
)














7



Curtailments






6







1







Foreign currency effects






1







3







3Projected benefit obligation end of year


(390
)


(71
)


(342
)


(73
)


(299
)


(78
)Change in fair value of plan assets:Fair value at beginning of year


176



32



257



36



342



39Contributions and transfers


63



4



65



4



11



3Actual return on plan assets


13



3



25



4



(27
)


(2
)Benefits paid


(3
)


(2
)


(5
)


(3
)


(5
)


(1
)Plan transfers from/to Qimonda


8















(7
)


Foreign currency effects






(1
)






(2
)






(3
)Fair value at end of year


257



36



342



39



314



36Funded status


(133
)


(35
)






(34
)


15



(42
)Unrecognized actuarial (gains) losses


136



(7
)


40



(6
)


29



(1
)Unrecognized prior service cost (benefit)


13







12







10



Post measurement date contributions


16







1







1



Net asset (liability) recognized


32



(42
)


53



(40
)


55



(43
)     2006


2007


2008Domestic


Foreign


Domestic


Foreign


Domestic


Foreignplans


plans


plans


plans


plans


plans( in millions)Prepaid pension cost






1















Intangible asset


13



















Non-current pension asset










1



3



16



Current pension liability






















(1
)Pension liabilities


(65
)


(43
)






(36
)






(41
)Accumulated other comprehensive (income) loss


84







52



(7
)


39



(1
)Net asset (liability) recognized


32



(42
)


53



(40
)


55



(43
)  F-45




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     Unrecognized actuarial losses


Unrecognized prior service


Accumulated other comprehensive(gains)


cost (benefits)


income (loss)Domestic


Foreign


Domestic


Foreign


Domestic


Foreignplans


plans


plans


plans


plans


plans( in millions)Balance at beginning of year


40



(7
)


12







52



(7
)Additions


(11
)


6



(1
)






(12
)


6Reclassification adjustment










(1
)






(1
)


Balance at end of the year


29



(1
)


10







39



(1
)       2006


2007


2008Domestic


Foreign


Domestic


Foreign


Domestic


Foreignplans


plans


plans


plans


plans


plans( in millions)Projected benefit obligation


390



61







60







78Fair value of plan assets


257



24







24







36Accumulated benefit obligation


337



51







44







43Fair value of plan assets


257



24







17







16     2006

2007

2008Domestic

Foreign

Domestic

Foreign

Domestic

Foreignplans

plans

plans

plans

Plans

plansDiscount rate


4.8%


5.3%


5.5%


5.6%


6.5%


6.1%Rate of compensation increase


2.5%


1.8%


2.5%


2.3%


2.5%


2.8%Projected future pension increases


1.8%


2.2%


1.8%


2.7%


2.0%


2.9%Expected return on plan assets


6.5%


6.9%


6.1%


6.9%


6.5%


7.0%     Investment
    Strategies
   F-46




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     Expected
    Long-term Rate of Return on Plan Assets
      Plan Asset
    Allocation
    2007


2008


Targeted AllocationDomestic


Foreign


Domestic


Foreign


Domestic


Foreignplans


plans


plans


plans


plans


plansEquity securities


37%



60%



34%



47%



36%



47%Debt securities


34%



22%



36%



16%



31%



17%Other


29%



18%



30%



37%



33%



36%Total


100%



100%



100%



100%



100%



100%    F-47




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2006


2007


2008Domestic


Foreign


Domestic


Foreign


Domestic


Foreignplans


plans


Plans


plans


plans


plans( in millions)Service cost


(18
)


(4
)


(20
)


(4
)


(16
)


(3
)Interest cost


(15
)


(4
)


(18
)


(4
)


(18
)


(4
)Expected return on plan assets


11



2



15



3



22



3Amortization of unrecognized prior service (cost) benefits


(1
)


2



(1
)






(1
)


Amortization of unrecognized actuarial gains (losses)


(6
)






(7
)


1







Curtailment gain recognized






2







1







Net periodic pension cost (note 7)


(29
)


(2
)


(31
)


(3
)


(13
)


(4
)           Employers Accounting for Settlements and Curtailments
    of Defined Benefit Pension Plans and for Termination
    Benefits
    Domestic


ForeignYears ending September 30,

plans


plans( in millions)2009


24



22010


24



22011


25



32012


20



22013


22



2Thereafter


139



20   32.
    Financial
    Instruments   F-48




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
       2007


2008Notional

Fair


Notional

Fairamount

value


amount

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


260


14



213


(5
)Japanese yen


15






5


Singapore dollar









10


Malaysian ringgit


3






3


Norwegian krone


2









Forward contracts purchased:U.S. dollar


283


(19
)


157


(4
)Japanese yen


4






1


Singapore dollar


19






29


Great Britain pound


6






9


Malaysian ringgit


66


(1
)


52


Norwegian krone


7






2


Other currencies


1









Currency Options sold:U.S. dollar









177


(5
)Currency Options purchased:U.S. dollar









163


1Interest rate swaps


700


(10
)


500


(1
)Other


123


9



77


(1
)Fair value, net





(7
)





(15
)      F-49




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     33.
    Risks               F-50




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
            34.
    Commitments and
    Contingencies  Litigation and
    Investigations
       F-51




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
            F-52




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
            F-53




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
         Wi-LAN Wi-LANs
  and/or
 F-54




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
         Accruals and
    the Potential Effect of these Lawsuits
         F-55




---



##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   Contractual
    Commitments
  (1)
  Payments Due by PeriodLessthan

1-2

2-3

3-4

4-5

AfterTotal

1 year

years

years

years

years

5 years( in millions)Contractual commitments:Operating lease payments


776


75


63


59


58


56


465Unconditional purchase commitments


634


594


18


11


3


4


4Total Commitments


1,410


669


81


70


61


60


469   (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.      Other
    Contingencies
  (1) :
  Expirations by PeriodLessthan

1-2

2-3

3-4

4-5

AfterTotal

1 year

years

years

years

years

5 years( in millions)Maximum potential future payments:Guarantees(2)


97


11





5


14


3


64Contingent
government
grants(3)


47


20


12


4


5


6


Total contingencies


144


31


12


9


19


9


64   (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.(2)
    Guarantees are mainly issued for the payment of import duties,
    rentals of buildings, and contingent obligations related to
    government grants received.(3)
    Contingent government grants refer to amounts previously
    received, related to the construction and financing of certain
    production facilities, which are not otherwise guaranteed and
    could be refundable if the total project requirements are not
    met.   F-56




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
           35.
    Operating Segment
    and Geographic Information  Disclosure about Segments of an Enterprise and Related
    Information
   F-57




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     work-in-process
    Automotive,
    Industrial & Multimarket
    Communication
    Solutions
    Other Operating
    Segments
   F-58




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2006


2007


2008( in millions)Net sales:Automotive, Industrial & Multimarket


2,839



3,017



2,963Communication
Solutions(1)


1,205



1,051



1,360Other
Operating
Segments(2)


310



219



100Corporate and
Eliminations(3)


(240
)


(213
)


(102
)Total


4,114



4,074



4,321   (1)
    Includes sales of 0, 30 million and
    10 million for the fiscal years ended
    September 30, 2006, 2007, and 2008, respectively, from
    sales of wireless communication applications to Qimonda.(2)
    Includes sales of 256 million, 189 million
    and 79 million for the fiscal years ended
    September 30, 2006, 2007 and 2008, respectively, from sales
    of wafers from Infineon Logics 200-millimeter facility in
    Dresden to Qimonda under a foundry agreement.(3)
    Includes the elimination of sales of 256 million,
    219 million and 89 million for the fiscal
    years ended September 30, 2006, 2007 and 2008,
    respectively, since these sales are not expected to be part of
    the Qimonda disposal plan.  2006


2007


2008( in millions)EBIT:Automotive, Industrial & Multimarket


240



291



315Communication Solutions


(234
)


(165
)


(73
)Other Operating Segments


4



(12
)


(3
)Corporate and Eliminations


(146
)


(77
)


(287
)Total


(136
)


37



(48
)Adjust: Interest expense, net


(67
)


(40
)


(26
)Extraordinary loss, net of tax






35



(Loss) income before income taxes, discontinued operations, and
    extraordinary loss


(203
)


32



(74
)   2006


2007


2008( in millions)Depreciation and Amortization:Automotive, Industrial & Multimarket


411



401



341Communication Solutions


246



186



186Other Operating Segments


45



22



15Corporate and Eliminations










Total


702



609



542     F-59




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
   2006


2007


2008( in millions)Inventories:Automotive, Industrial & Multimarket


264



307



335Communication Solutions


108



128



166Other Operating Segments










Corporate and Eliminations


208



163



162Total


580



598



663     2007


2008( in millions)Goodwill:Automotive, Industrial & Multimarket






13Communication Solutions


52



211Other Operating Segments






Corporate and Eliminations


1



1Total


53



225     2006


2007


2008( in millions)Corporate and Eliminations:Unabsorbed excess capacity costs


(33
)


(7
)


(21
)Restructuring charges (note 8)


(23
)


(45
)


(181
)Share-based compensation expense (note 27)


(25
)


(12
)


(5
)Impairment charges


(17
)






(59
)Other, net


(48
)


(13
)


(21
)Total


(146
)


(77
)


(287
)  F-60




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
     2006


2007


2008( in millions)Net sales:Germany


1,010



907



924Other Europe


933



888



818North America


535



564



503Asia/Pacific


1,324



1,450



1,800Japan


209



213



198Other


103



52



78Total


4,114



4,074



4,321   2006


2007


2008( in millions)Property, plant and equipment:Germany


624



383



434Other Europe


494



446



316North America


5



7



10Asia/Pacific


556



623



549Japan


4



3



2Other


1







Total


1,684



1,462



1,311         36.
    Subsequent
    Events  Various
    Matters
   F-61




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
                   F-62




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##### Table of Contents



Infineon
    Technologies AG and Subsidiaries
       Qimonda
   F-63




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##### Table of Contents



SIGNATURES
  Form 20-F
     Infineon Technologies AG
  /s/  Peter
    Bauer




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##### Table of Contents



Exhibit Index
  Exhibit





Exhibit

Filing Date

SEC FileNumber

Description of Exhibit

Form

Number

with SEC

Number1.1

Articles of Association (as of February 2008) (English
    translation)

Filed herewith.1.2

Rules of Procedure for the Management Board (as of November
    2007) (English translation)

Filed herewith.1.3

Rules of Procedure for the Supervisory Board (as of November
    2007) (English translation)

Filed herewith.1.4

Rules of Procedure for the Investment Finance and Audit
    Committee of the Supervisory Board (as of November 2007)
    (English translation)

Filed herewith.2

The total amount of long-term debt securities of Infineon
    Technologies AG authorized under any instrument does not exceed
    10% of the total assets of the group on a consolidated basis.
    Infineon Technologies 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 Infineon Technologies AG or of
    its subsidiaries for which consolidated or unconsolidated
    financial statements are required to be filed.4.3

Patent Cross License Agreement between Infineon and Siemens AG,
    dated as of February 11, 2000

F-1



February 18, 2000

333-115084.9

Shareholder Agreement of ALTIS Semiconductor between Infineon
    Technologies Holding France and Compagnie IBM France, dated as
    of June 24, 1999

F-1



February 18, 2000

333-115084.18()

Joint Venture Agreement between Infineon and Nanya Technology
    Corporation, executed on November 13, 2002

20-F

4.38

December 4, 2002

1-150004.19()

Amendments No 1, 2 and 3 to the Joint Venture Agreement between
    Infineon and Nanya Technology Corporation, executed on
    November 13, 2002

20-F

4.19

November 23, 2005

1-150004.19.1()

Amendment No. 4 to the Joint Venture Agreement between
    Infineon and Nanya Technology Corporation, executed on
    November 13, 2002

Filed as exhibit 10(i)(I) to the registration statement on form
    F-1 of Qimonda AG dated August 8, 2006 (file 333-135913) and
    incorporated herein by reference4.20

Terms and Conditions of 5% Guaranteed Subordinated Convertible
    Notes due 2010 in the aggregate nominal amount of EUR
    700,000,000 (the 2010 Notes) issued on June 5,
    2003 by Infineon Technologies Holding B.V.

20-F

4.30

November 21, 2003

1-150004.21

Undertaking for Granting of Conversion Rights from Infineon to
    JPMorgan Chase Bank for the benefit of the holders of the 2010
    Notes, dated June 2, 2003

20-F

4.31

November 21, 2003

1-150004.22

Subordinated Guarantee of Infineon, as Guarantor, in favor of
    the holders of 2010 Notes, dated June 2, 2003

20-F

4.32

November 21, 2003

1-150004.23

Loan Agreement dated June 2, 2003, between Infineon
    Technologies Holding B.V., as Issuer, and Infineon

20-F

4.33

November 21, 2003

1-150004.24

Assignment Agreement dated June 2, 2003, among Infineon
    Technologies Holding B.V., Infineon and JPMorgan Chase Bank for
    the benefit of the holders of the 2010 Notes

20-F

4.34

November 21, 2003

1-150004.25()

Amendment 1, dated June 26, 2003, to Shareholder Agreement
    of ALTIS Semiconductor between Infineon Technologies Holding
    France and Compagnie IBM France, dated as of June 24, 1999

20-F

4.35

November 21, 2003

1-150004.25.1()

Amendment 2 effective as of December 31, 2005 to
    Shareholder Agreement of ALTIS Semiconductor between Infineon
    Technologies Holding France and IBM XXI SAS dated as of
    June 24, 1999.

20-F

4.25.1

November 30, 2006

1-150004.25.2

Framework Agreement dated as of August 8, 2007 among
    GlobalInformService, International Business Machines Corporation
    and Infineon Technologies AG, related to ALTIS Semiconductor

20-F

4.25.2

December 7, 2007

1-15000




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##### Table of Contents



Exhibit





Exhibit

Filing Date

SEC FileNumber

Description of Exhibit

Form

Number

with SEC

Number4.26()

Real Estate Leasing Contract between MoTo Object CAMPEON
    GmbH & Co. KG and Infineon dated as of
    December 23, 2003, with Supplementary Agreements No 1 and 2
    (English translation)

20-F

4.28

November 26, 2004

1-150004.27.1

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).

Filed as exhibit 10(i)(A) to the registration statement on
    form F-1
    of Qimonda AG dated August 4, 2006
    (file 333-135913)
    and incorporated herein by reference4.27.2

Contribution Agreement (Einbringungsvertrag) between
    Infineon Holding B.V. and Qimonda AG, dated as of May 4,
    2006 (English translation).

Filed as exhibit 10(i)(B) to the registration statement on
    form F-1
    of Qimonda AG dated August 4, 2006
    (file 333-135913)
    and incorporated herein by reference4.27.3

Addenda No. 2 and 3 to Contribution Agreement
    (Einbringungsvertrag) between Infineon Technologies AG
    and Qimonda AG, dated as of April 25, 2006 (English
    translation).

Filed as exhibit 4(i)(W) to the annual report on form 20-F of
    Qimonda AG dated November 21, 2006 (file 1-32972) and
    incorporated herein by reference4.27.5

Master Loan Agreement between Qimonda AG and Infineon
    Technologies Holding B.V., dated April 28, 2006.

Filed as exhibit 10(i)(D) to the registration statement on
    form F-1
    of Qimonda AG dated July 21, 2006
    (file 333-135913)
    and incorporated herein by reference4.27.6

Global Services Agreement between Infineon Technologies AG and
    Qimonda AG, effective May 1, 2006.

Filed as exhibit 10(i)(E) to the registration statement on
    form F-1
    of Qimonda AG dated July 21, 2006
    (file 333-135913)
    and incorporated herein by reference4.27.7

Master IT Cost Sharing Agreement by and between Infineon
    Technologies AG and Qimonda AG, effective May 1, 2006.

Filed as exhibit 10(i)(Q) to the registration statement on
    form F-1
    of Qimonda AG dated July 28, 2006
    (file 333-135913)
    and incorporated herein by reference4.28.1

Terms and Conditions of the 1.375% Guaranteed Subordinated Notes
    due 2010 in the aggregate nominal amount of EUR 215,000,000 (the
    2007/2010 Notes) issued by Infineon Technologies
    Investment B.V., on September 26, 2007.

20-F

4.28.1

December 7, 2007

1-150004.28.2

Subordinated Guarantee by Infineon Technologies AG in Favor of
    the Holders of the 2007/2010 Notes

20-F

4.28.2

December 7, 2007

1-150004.29

Asset Purchase Agreement by and between LSI Corporation and
    Infineon Technologies AG dated as of August 20, 2007.

Filed as exhibit 2.1 to the current report on form 8-K of LSI
    Corporation dated October 30, 2007 (file 001-10317) and
    incorporated herein by reference. Infineon Technologies AG
    agrees to furnish supplementally a copy of any omitted schedule
    to the Securities and Exchange Commission upon request.8

List of Significant Subsidiaries and Associated Companies of
    InfineonSee Additional Information  Organizational
    Structure12.1

Certification of chief executive officer pursuant to Exchange
    Act
    Rule 13a-14(a)

Filed herewith.12.2

Certification of chief financial officer pursuant to Exchange
    Act
    Rule 13a-14(a)

Filed herewith.13

Certificate pursuant to 18 U.S.C. section 1350, as
    adopted pursuant to section 906 of the Sarbanes-Oxley Act
    of 2002

Filed herewith.14.1

Consent of KPMG AG Wirtschaftsprüfungsgesellschaft

Filed herewith.     
    
    Confidential treatment requested as
    to certain portions, which portions have been filed separately
    with the Securities and Exchange Commission