Living Innovation, Shaping the Future Infineon Technologies Austria

www.infineon.com/austria

Fiscal Year 2013/2014

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Innovative Semiconductor Technologies

Focusing on Global Challenges

Our world faces major challenges: Rapid population growth, more and more megacities appearing and a ravenous appetite for energy, steadily growing on a global scale. And climate protection constantly demands new solutions in many parts of our modern lives. Our quest for a livable future calls on us to provide innovative tech-nologies for energy-efficient systems, flexible traffic concepts and security solutions for digital data exchange. High-performance semiconductor technology from Infineon supplies the key elements needed for the growth markets of the future.

Energy Efficiency Electricity is the universal energy source of tomorrow. But we have to handle it more economically. Infineon semiconductor technolo-gy makes more efficient design of the entire energy chain a reality, from generation and transmission of electricity all the way to its final specific use. Among other things, chip solutions from Infineon make it possible to feed wind energy into the power grid and increase the energy efficiency of industrial drives.

Mobility People want to be mobile. But the growing degree of urbanization and climate protection demand new solutions for the future: In addition to energy efficient cars we need sustainable and affordable concepts for local and long-distance transportation. Whether in sub-ways, high-speed trains, electric automobiles or e-bikes, semicon-ductors from Infineon enable the efficient use of energy in the drive systems of tomorrow.

Security Digital service shapes our daily lives: In the Internet and in electronic passports, modern communication has to be able to reliably protect individual information from misuse. Infineon security chips not only transfer data quickly, they use innovative encryption technology to keep data safe and to protect our virtual identities.

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Content

The Company 4

Corporate leader in Austria 5

Fiscal year 2013/2014 6

Guidelines for sustainable success 9

Local expertise, international responsibility 10

Good alone, better together 12

Platforms for internationality 13

Research & Development 14

Leading with effort and excellence 15

Innovation 16

Market success through innovation 17

Full power for more energy efficiency 18

Contactless, secure, mobile 20

Development at high frequencies 21

Innovation factory 22

Lead fab for innovative semiconductors 23

Success through precision 24

Excellence from idea to product 25

Technology leadership as mainspring 26

The factory of the future 27

Success Factor People 28

Our success is people 29

Living diversity together 30

Compatibility of family and career 31

Inspiring technology 32

Finding and promoting talent 33

Planning the right steps 34

Partnerships with a valuable lesson 35

Social Responsibility 36

Sustainable business, sustainable action 37

Setting a good example 38

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Infineon Austria TimelineConstruction begin for R&D and production building complex

2014 Expansion of Development Center Graz Metahof IV

2012 Expansion of production and new R&D building in Villach

2011 Sale of Wireless Solutions segment to Intel

2009 Sale of Wireline segment, becomes Lantiq

New R&D building in Villach2008 Sale of Comneon Linz

Expansion of Development Center Graz Metahof III Expert Support Service Center in Klagenfurt Opening of Development Center Bucharest, Romania

2006 Opening of Front-End plant Kulim, Malaysia

2005 New R&D building in Villach

2004 Founding of IT -Services in Klagenfurt

2003 Partial transfer of industrial electronics HQ to Villach

2001 Development Center in Vienna until 2003

Founding of Software Development Center Comneon; beginning of 8" wafer production

2000 Infineon Technologies AG IPO

Beginning of sales in Austria and southeastern Europe1999 Joint venture Development Center DICE -TU Linz

1998 Founding of Development Center Graz

Beginning of 6" wafer production1997 Villach becomes global power electronics competence center

1987 Expansion of Development Center Villach

1984 Beginning of 5" wafer production

Beginning of 4" wafer production1979 Founding of Development Center Villach

1970 Founding of diode production VillachVillach

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Klagenfurt Vienna Graz Linz

Infineon Technologies Romania SCS R&D

Infineon Technologies (Kulim) Sdn Bhd, Malaysia P

Vienna Sales

Linz R&D

Klagenfurt ITInternational Headquarter Function

Villach R&D, P, M, IT

- International Headquarter Function- KAI competence center Automobil- & Industrieelektronik GmbH R&D

- Infineon Technologies Austria Pensionskasse AG

Graz R&D

P ProductionR&D Research & Development M MarketingIT Information Technology Sales Sales

Headquartered in Villach, Infineon Technologies Austria AG is a Group subsidiary of Infineon Technologies AG. There are further branch offices in Klagenfurt, Graz, Linz and Vienna. Outside of Germany, Austria is the only site worldwide at which Infineon consolidates expertise in research and development, production and global responsibility for business performance.

The basis for success is an international team with staff members from approximately 60 different nations. This staff has established Infineon Austria as an important corporate leader in Austria.

Infineon Technologies Austria

Corporate leader in Austria

Infineon Technologies Austria AG including subsidiaries

Innovation as driving forceEnergy efficiency, mobility and security are three of the central requirements of modern society. They are also the central challenges that Infineon Austria addresses with its semiconductor and system solutions. Whether in the car, industrial electronics or chip cards, Infineon technology is behind many applications in everyday life. Innovation is the driver and at the same time binding element across all product groups, from analog and mixed- signal circuits to high-frequency and power semiconductors all the way to Embedded Control solutions.

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Sales of the Infineon Technologies Austria Group totaled €1,300.5 million in fiscal year 2014 (Oct. 2013 to Sept. 2014), an improvement of €118.8 million or approximately 10 percent compared to sales for the previous year. The profit on ordinary activities was €149.1 million, an increase of €60.4 million or approximately 68 percent compared to the previous year. Expenditures for Research & Development (R&D) totaled €320 million, corresponding to a research rate of 25 percent of overall sales. Invest-ments in the company amounted to €110.2 million, 72 percent more than in the previous year. As of the date of the balance sheet 3,305 persons were employed by Infineon Austria, the largest headcount in the company's history.

Since April 1, 2014 the Manage-ment Board of Infineon Technol-ogies Austria AG is composed as follows:

� CEO : Dipl.-Ing. Dr. Sabine Herlitschka, MBA

� Chief Financial Officer: Dipl.-Ing. (FH) Oliver Heinrich

� Chief of Operations: Dr. Thomas Reisinger

Mag. Dr. h.c. Monika Kircher resigned from her function as CEO effective as of March 31, 2014.

In June 2014 Infineon Austria announced the expansion of the Villach site. The Pilot Space Industry 4.0 realizes and tests an innovative concept of interconnected and knowledge-intensive production. In addition, research on

new materials and technologies is also being intensified. From 2014 to 2017 investments and research expenditures totaling €290 million are planned for the expansion. Approximately 200 new jobs, primarily in R&D, are expected. The groundbreaking for the new building com-plex took place in September 2014.

At the Development Center Graz the new Metahof IV building was opened in April 2014. This increased office and

laboratory space by 1,700 square meters to a total of 6,300 square meters and provides space for about 100 additional workstations, primarily for R&D in the automotive sector.

In the context of R&D activities Infineon Austria maintains inten-sive partnerships with Austrian universities and research facilities. Infineon entered into a strategic partnership with the Austrian Institute of Technology (AIT) in May 2014 as the basis for joint research projects.

Events after the balance sheet date (September 30, 2014)In November 2014 Infineon Austria endowed a professor-ship for power electronics at The University of Innsbruck. The first chair endowed by Infineon in Austria is intended to ensure a high-value education in electronics and power electronics and to make an active contribution to practical-ly oriented research and teaching. Over the next five years €1.5 million will be invested in the partnership with The University of Innsbruck's Faculty of Technical Sciences.

New CEO, new investments and partnerships

Fiscal Year 2013/2014

From the left: Thomas Reisinger, Sabine Herlitschka, Oliver Heinrich

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1.300.500.000149.100.000

25%

110.200.000

Infineon at a Glance Facts and Figures 2013/2014

Infineon Technologies AGSales €4,320 mill.

Employees worldwide 29,807

Infineon Technologies AustriaSales + 10% €1,300.5 mill.

Profit on ordinary activities + 68% €149.1 mill.

Investments + 72% €110.2 mill.

Total number of employees + 6% 3,305

Total percentage of women 15.2%

Employees in R&D + 9% 1,205

Employees in product and process development as well as quality assurance Appr. 400

External employees contracted permanently via partner companies Appr. 1,800

Undergraduate/phD project students* 85

Apprentices 51

Interns & vocational/temporary industrial workers* 864

Research and DevelopmentInvention disclosures 508

Filed patent applications 333

R&D expenditures in % of sales 25

ProductionProducts (basic types) + 33% 1,859

Production volume 12.9 billion chips

Audits and customer visits 37

*Aggregate values Fiscal year 2013/2014, as of September 30, 2014, including domestic subsidiaries

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Strategy 2020

Guidelines for sustainable success

International competitive strength made in Austria: The sustainable goal of Infineon Technologies Austria. Strategy 2020 is the guideline for action. The platform for this strategy is seven coordinated target areas which build on the strengths of Infineon in Austria.

� Market Leadership with Product 2 System: Changing from the product mind set to system under-standing enables long-term financial success and a strong market position.

� Analog, Mixed-Signal & Power Competencies: The worldwide competence center in Austria supports the entire corporate group with a high level of develop-ment expertise.

� Innovation Leadership: Innovations pave the way to market leadership in inter-national competition.

� World Class Manufacturing Competence: Innovative manufacturing techniques create a clear benefit for the customer.

� Best R&D Eco-System: Value created for research and development activities by actively shaping basic conditions and networks.

� Operational Excellence: Quality, reliability and efficiency in all processes create worldwide trust.

� People Excellence: Excellently educated employees are the basis for future success.

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Infineon Technologies Austria stands for a productive sym-biosis of innovative research and high-quality production made possible by a dedicated team of experts. This was and is the basis for the global market success of Infineon semiconductor products. The Infineon Group leverages the many years of experience and local expertise of its subsidiary in Austria, having made it the only site in the Group with worldwide business performance responsibility for six product lines.

Energy efficiency as driver Energy costs are rising, resources are growing more scarce. The topic of energy efficiency is taking on an important role for Infineon Austria business units as well. The objective: Marketing chips and components with maximum efficiency in everyday use throughout the entire energy cycle, from generation and transmission all the way to consumption by the end customer.

The Infineon Austria division Power Management & Multimarket is responsible for the product line High Voltage Power Conversion, Medium Voltage Classes, Computing and Power Management IC. Typical application fields for their semiconductor components are for example power supplies for servers, notebooks, smartphones, tablets and entertainment electronics, among other applications. Here the electric voltage from a battery or wall socket is regulated using direct current converters and made appropriate for the respective intended use. For example, current conversion in 40 percent of servers worldwide is regulated by a power semiconductor from Infineon.

Furthermore, these products are used in lighting solutions such as LED technologies, whose share of the overall illumination market will continue growing dramatically in coming years.

Global business activities

Local expertise, international responsibility

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Energy efficiency meets mobilityPower components of the product line IGBT Chips, Discretes & Drivers from the Infineon Industrial Power Control division are an important part of electronic controls for all types of drives in industrial applications. This includes for example pumps, fans and compressors, as well as engine control units in high-speed and regional trains, commuter and subway trains.

Electric and hybrid vehicles are an increasingly common sight on our streets. Working from Austria, the Infineon Automotive division's product line Powertrain Bare Die pursues global business in sub-areas of electromobility such as control electronics components for electric vehicle drives.

Infineon's success in global markets is also reflected by Austrian business activities. According to the August 2014 study The World Market for Power Semiconductor Discretes & Modules by the US information provider IHS Inc., Infineon was able to expanded its world market leadership for power semiconductors in 2013. With a 12.3 percent market share the company was ranked number one for the elev-enth consecutive time.

Worldwide IT management in KlagenfurtAnother global competence center is Infineon Technolo-gies IT-Services GmbH, headquartered in the Klagenfurt Lakeside Science & Technology Park. Since 2004 this has been home to worldwide responsibility for the area of IT infrastructure, which includes the design and operation of all Infineon servers, PCs and networks as well as the IT Service Desk.

In 2011 the data center for all Infineon developers world-wide was consolidated in Austria, and is today the central assignment for Infineon Technologies IT-Services GmbH. In order to meet growing IT security requirements, the global functions were relocated to Klagenfurt, including the areas physical Access Control, Video Surveillance and Security Operations as well as worldwide operation of all Infineon Internet services. Essential areas of the divisions Factory Integration and IT Enterprise Application Platforms are also managed in Klagenfurt. This involves software solutions for microchip production and operation of business process platforms such as SAP.

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Infineon Technologies Austria is among the leading research and development companies in Austria. Partner-ships leverage symbiosis and are an important success factor in global competition. This is why Infineon Austria contributes its expertise to a large number of both domes-tic and foreign partnerships and research networks. The result is even faster and sounder expansion of knowledge and an even stronger leading position as a development and production location creating future-oriented innovations.

Strengthening microelectronics throughout the EUKey Enabling Technologies is the name of the European Union strategy for strengthening industrial research and production in key technologies such as microelectronics in order to keep the competitive strength of industry in Europe. Infineon Austria has taken on a leading role in two projects in this large-scale initiative:

� EPT300 (Enhanced Power Technologies on 300mm Wafer Diameter)

� EPPL (Enhanced Power Pilot Lines)

National clusters consolidate expertiseNetworking and building joint competencies in the area of micro- and nanoelectronic systems is the objective of Infineon Austria's partnerships within Austria. Here the company is active in clusters in Carinthia, Styria and Upper Austria as well as in national IT platforms including ECSEL-AT (Electronic Components and Systems for European Leadership Austria).

In step with the future-oriented topic of electromobility, Infineon Austria has joined leading companies from industry, research and the energy industry in the nation-wide Austrian Mobile Power platform. The goal here is to promote electromobility concepts.

National and international partnerships

Good alone, better together

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Infineon Technologies Austria is among the most important pillars of the Austrian economy. The company benefits from the country's people and gifted thinkers, from the infrastructure and the quality of life. This makes investment in domestic locations of particularly great importance to Infineon, making them attractive workplaces for interna-tional experts and giving a part of Infineon's success back to Austria.

Focus on education and international networksThe Carinthian International Club (CIC) is a multi-language network for industry and science in Carinthia founded in 2009 under the sponsorship of Infineon Austria. The

primary contact for questions regarding working and living in Austria's southernmost province, the Club, which currently has 32 member companies and 398 individual members (as of October 2014), paves the way for long-term integration of international employees and their family members. The Club's dedication also led to the founding of the first international school in Carinthia in 2013 as well as establishing an international day care center.

At the Graz site Infineon supports a similar initiative, also aimed at the integration of foreign staff, with the Club International (CINT), established in 2012.

Network initiatives

Platforms for internationality

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Sensors for tire pressure measurement

Chips for illumination systems

Contactless security chip for ID documents

Energy-saving power semiconductors

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According to the business magazine trend TOP 500 ranking list for 2013, Infineon Technologies Austria was the strongest research company in Austria. In fiscal year 2014 investments in research and development rose to 25 percent of overall sales. In this context 1,205 experts at the Development Centers Villach and Graz, at the Linz subsidiary DICE (Danube Integrated Circuit Engineering) and at Infine-on Technologies IT-Services in Klagenfurt work constantly on new products, technologies and innovations.

Shaping Austria …Research and development at Infineon Austria have produced excellent results in past years. The constant expansion of local expertise and worldwide research assignments in the area of Energy Efficiency, Mobility and Security reflect this performance. The recipe for success: Short development times, highest levels of quality and a focus on customer-oriented system solutions – "From product to system".

…and shaping the worldInfineon Austria plays a decisive role in shaping developments at the leading edge of the high-tech world, in particular through active exchange in inter-national networks and research partnerships. Thus for example a joint effort by Infineon Austria and The Institute for High Energy Physics of the Austrian Academy of Sciences (HEPHY) is developing particle detectors for experiments by CERN (Conseil Européen pour la Recherche Nucléaire, European Organization for Nuclear Research). These detectors will help identify elementary particles similar to the Higgs Boson. In 2014 the project was honored as runner-up for the prestigious Houska Prize for research.

Research & Development

Leading with effort and excellence

Facts and Figures

� Invention disclosures: 508

� Initial patent registrations: 333

� R&D expenditures: 25% of sales

� R&D expenditures in € million: 320

� Employees in R&D: 1,205

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Innovation means many things to Infineon: Mainspring, guiding vision, basis for action. On a daily basis our staff members search for the new: New ways, new ideas, new processes, new products. One thing is perfectly clear: Innovation is the fundamental basis for the success of both Infineon and Austria as a technological business location, today and in the future.

This is why Infineon Technologies Austria has been energetically pursuing a strategy focusing on excellent innovation management since 2008.

Innovations need the right cultureInnovations don't come out of the blue. They need a living culture of ideas within the company, involving all divisions and areas on an equal basis. One element helping to shape this culture is the Innovation Days. Held several times each year on various focus topics, they have already taken place 16 times. The spotlight is on the interdisciplinary and interactive exchange of experiences and ideas.

The annual innovation projects constitute another exem-plary initiative. In this internal idea competition projects are nominated for one year of funding by Infineon Austria. Here approximately €2.5 million were invested in the past fiscal year.

Outstanding innovation performance is also recognized annually with the Infineon Austria Innovation Award. Approximately 250 submissions have been received in the six-year history of the Award. In 2014 the Learning Prize was also presented for the second time, recognizing special lessons and measures derived from past mistakes. And an ongoing internal improvement program also continues to produce new strategies for innovation. Employees are

called on to submit their ideas for improving products, processes and methods.

Visible success35 successful projects in five years: An excellent track record for inno-vation management at Infineon Austria. One of the beacon projects "made in Austria" is Power300, the first and only production of power semiconductors using 300 milli-meter thin wafer technology, also the winner of the Austrian National Innovation Prize in 2013.

Yet another success story is the silicon microphone in nano-format, in part developed and produced in Austria. The product is currently in use in millions of smartphones, hands-free units and headsets, tablets and hearing aids and made Infineon the world's second largest supplier of this product within an extremely short time.

The technology of tomorrow

Market success through innovation

Developing ideas for the world of tomorrow – The goal at Infineon Austria.

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For over 35 years now Villach has developed microelec-tronics, more exactly power electronics and energy-saving chips, all at the highest level of quality. The reason: Villach has been the home of the worldwide Infineon competence center for power electronics since 1997.

Smaller and more efficient energy-saving chips Activities in Villach are focused on two topics: Increasing energy efficiency and system miniaturization through innovative power semiconductors. The results of these efforts are smaller and smaller energy efficient chips that enable levels of effectiveness well over 90 percent, reduc-ing energy loss to an absolute minimum.

Chips like these are used in industrial applications for com-puters, communications, entertainment electronics and in lighting. This highly efficient electronic capability from Villach is absolutely essential to windparks, photovoltaic systems and power distribution using Smart Grids.

And the many years of development experience are paying off: With approximately 5.5 billion products sold, Infineon technologies "made in Austria" such as CoolMOS™ are the world leaders in silicon power semiconductors. To make sure this does not change, each year materials research ensures that technology from Austria will in the future continue to play a leading role around the world for components based on silicon carbide (SiC) and gallium nitride (GaN).

In hot pursuit of next-generation vehicles The objective in the research area Mobility is designing the next generation of vehicles. Power electronics and sensor technologies engage here in an efficient symbiosis, producing intelligent solutions with increased comfort at lower levels of energy consumption. As one of the largest manufacturers of integrated sensors in the world,

Infineon Technologies Austria has to date delivered a total of over three billion sensor components for automobile applications. The result is intelligent cars with the highest level of safety.

Whether for light systems that avoid blinding oncoming traffic even when using high beams, for electronic seat adjustment, the airbag system, ventilation louver control, electronic power steering, steering angle control, dy-namic damping or exhaust optimization: Infineon Austria expertise and products are found in many automotive applications working to ensure better comfort and in-creased passive security. This is the kind of research that expands the spectrum of possible uses in vehicles and thus embraces the mobility concepts of the future such as electric and hybrid vehicles.

Analog, digital and more This is another research area in which Infineon is firmly in the lead. Here the focus is on the development of circuits which, as the name indicates, process both digital and analog signals.

In order to specifically exploit synergies generated between the core areas Energy Efficiency and Mobility, this research area was divided into individual competence centers in Villach. The competence centers include the fields power management, analog/digital converters for microcontrollers, clock systems, optical sensors, driver circuits for high-voltage switches as well as converters and amplifier circuits for analog and digital microphones. This makes it possible to better accommodated customer-specific requirements, for example in telecommunications, the health care sector, in computer electronics or in the automotive industry. Customers and Infineon business segments alike benefit from the Austrian developments in this area.

Innovation from Villach

Full power for more energy efficiency

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While Villach concentrates on power electronics, con-tactless technologies take center stage in Graz: Infineon Technologies Austria operates the worldwide competence center for all things contactless at its Development Center in Styria. Whether with the Near Field Communication (NFC) transmission standard and security ICs (integrated circuits) or radio components for automotive applications such as tire pressure sensors, the Graz team has been driving innovation in security and mobility since 1998.

Security comes firstGraz develops security chips which meet a variety of standards for contactless data transmission. The mission: Increase data transmission rates even further and develop new form factors for various applications. These chips find application in tickets for local public transportation, electronic identity documents such as passports and health care cards, and in systems for payment cards and credit cards. Security chips such as the Trusted Platform Module (TPM) further improve the hardware security of PCs and tablets.

Since 2011 a 3D imager has been in development in Graz, based on technology for the world's smallest camera modules. These units not only provide excellent pictures, they can also determine the distance of an object from the camera. This enables for example gesture control for the tablet or PC.

Who steers the engine?Graz is also home to Infineon Austria's Powertrain Compe-tence Center. ASIC (Application-Specific Integrated Circuit) solutions, specific integrated circuits for automobile appli-cations along the vehicle powertrain, are developed here. This includes circuitry for diesel and gasoline engine control systems, precision current controllers for exact control of automatic transmissions and controllers for automotive gen-erators. These generator controllers are a perfect example of innovative power from Graz: The innovative approaches were chosen by the German Association of the Automotive Industry (VDA) as one of two reference designs. One in every eight cars worldwide is equipped with a generator controller from Infineon Austria – and the share is growing.

Innovations from Graz

Contactless, secure, mobile

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At the Linz site Infineon Technologies Austria operates its development center for high-frequency components, the subsidiary Danube Integrated Circuit Engineering (DICE). The company focuses on integrated circuits for automotive radar systems, another field in which Infineon is number 1 in the world market.

Development in Linz centers on 77 GHz radar components, used in driver assistance systems such as distance warning systems, blind spot detection and automatic emergency braking. Three generations have already been brought to serial production readiness, with the development of the fourth generation currently under way using a new manu-facturing technology.

Innovation from collaboration DICE, founded as a Johannes Kepler University spin-off in Linz in 1999, relies on intensive collaboration with research and educational institutions such as the Hagenberg Univer-sity of Applied Sciences. This is the basis for the innovative power of DICE. Other DICE development focus areas include antenna switches and reception amplifiers for communica-tion and navigation applications. These products are used by all renowned mobile telephone and navigation system manufacturers.

Innovations from Linz

Development at high frequencies

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Power semiconductors for applications in automotive, industrial and security systems as well as for computing and consumer devices are made at the pro-duction site in Villach. Villach is an integral and important part of the front-end production complex with additional sites in Germany and Malaysia. This means: Villach is creating the future – For Infineon and for people.

Precision work for global market success In Villach electronic components are manufactured on silicon wafers. These parts are produced and tested using various technologies and at varying levels of complexity in up to 1,000 production steps for four different wafer diameters. This calls for the highest possible precision: Accuracy down to significantly less than 100 nanometers, i.e. approximately 700 times smaller than the diameter of a human hair, illustrates the high degree of technological expertise at the Villach site.

A total of approximately 1,900 basic product types are manufactured simultane-ously in Austria. Synergies in research, development and production at the site drive innovations. This in turn strengthens the global market success of Infineon chips from Austria, for example in Micro-ElectroMechanical Systems (MEMS).

Knowledge-based productionVillach is the innovation center for power electronics at Infineon. Continuous investments in the necessary infrastructure reinforce this role and ensure com-petitive strength in the international market environment, led by the Pilot Space Industry 4.0, an innovative concept of networked and knowledge-intensive production. This modern environment places Infineon Technologies Austria at the vanguard of Smart Production.

Production & Technology

Lead fab for innovative semiconductors

Core expertise at the Villach innovation fab:

� Development of new, future-oriented products to production readiness

� Reliable production at high quality level

� Achieving competitive strength through smart automation

� Further development of manufacturing technologies and production expertise

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The highest possible quality – customers expect it, and nothing less. And that's what drives Infineon Technologies Austria. The strategy is called Zero Defect, i.e. no defective components are delivered to the customer. This is a central part of Infineon Austria's culture of innovation and learn-ing, in which improvements are continuous and variances are minimized and rigorously eliminated.

Comprehensive inspections, satisfied customersEach individual chip undergoes comprehensive checks throughout the entire production process and is then com-prehensively tested. Testing is supported by the complete certification of our production operations under the ISO 9001:2008 quality programs and the automotive standard ISO TS 16 949:2009. Automation in the area of production and the implementation of Advanced Process Control (APC) emphasize dedication to the highest possible quality.

In order to adapt this quality throughout the entire corpo-rate Group to better accommodate customer requirements, Villach collaborates closely with other Infineon sites in Europe and Asia, with great success: During the past year many international customers from around the world have experienced the high quality and process performance first-hand during visits and audits at the site.

Purity means qualityManufacturing semiconductor components calls more than anything for highly pure resources and materials as well as highly pure ambient air. Work in Villach takes place in Class 1 and 10 cleanrooms. Class 1 means a permissible maximum of one dust particle more than 0.5 micrometers in diameter in 28 liters of air. For the sake of comparison, that much normal ambient air contains about one million dust particles.

Quality as a central criterion

Success through precision

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The combination of development and production at the Villach site is a special feature of Infineon Technologies Austria – and the key to successful innovation in pro-duction. The optimum consolidation of expertise and cross- division teams enables short throughput times from the idea to the completed product. The best example: Power300, the world's first production of power semicon-ductors using 300 millimeter thin wafer technology.

Once Infineon Austria had manufactured the first chips using this technology at the end of 2011, a further mile-stone was achieved at the beginning of 2013: The success-ful qualification of a complete and consistent production line and customer approval for volume production. In 2013 this project earned Infineon Austria the Austrian National Innovation Prize.

Efficiency is the principle goal Villach production focuses on innovation in several areas: Individual process technology, equipment engineering, new materials and future-oriented automation, digitaliza-tion and production concepts.

Thus for example the iRobotics innovation project uses intelligent robot technologies to make monotonous recurring work steps more precise and in doing so increases safety at the workstation. In addition, inno-vative digitalization concepts combined with up-to-date visualization and analysis methods make it possible to prepare data volumes quickly and on a target group-oriented basis. The combined result of all this exemplary effort: Efficiency and excellence in production is significantly increased.

Innovation factory

Excellence from idea to product

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The math is simple: As the energy loss generated by electronic components drops, it gets easier to build smaller and lighter devices using these components. Energy efficiency rises.

This is the kind of innovative power semiconductor component produced in Villach. But the trend towards smaller and smaller components and other products is a great challenge for production. Our answer: Thin wafer technology and innovative basic materials.

Production par excellenceInfineon Technologies Austria has worldwide unique expertise in high-volume production of silicon wafers only 40 micrometers thick. The next step is to once again halve this thickness and thus produce 20 micrometer thick wafers at high volumes. For the sake of compar-ison: These wafers would then be about one fifth the thickness of a single sheet of paper.

New materials for everyday applicationsBy using innovative basic semiconductor materials such as silicon carbide (SiC) and gallium nitride (GaN) it's possible for example to realize high-performance and

quick-switching power supplies with the highest possible reliability and lower electrical consumption. Products with these technologies are applied in promising future markets such as solar energy and wind power, transport, hybrid and electric cars and energy conversion in daily use in network and household devices.

MEMS strengthen market success Since 2008 Villach has also produced MEMS, microelectro- mechanical systems. These micromachines are used in a wide variety of areas, e.g. as tire pressure sensors or as nano-format silicon microphones. The continuing development of MEMS technologies not only expands local product, technology and production exper-tise, but also drives global market success.

Putting quality to the testIn the testing laboratory (Reliability Product Testing Center) at the

Villach site the quality components for automotive and industrial facilities are tested for reliability under the most demanding conditions possible. The results achieved there then serve as the basis for production delivery approval and ensure market readiness.

Comprehensive production expertise

Technology leadership as mainspring

Infineon Technologies like silicon microphones for smartphones make sure the message gets across.

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The semiconductor industry lives in a dynamic environ-ment. Staying competitive and leading the market in the future means mastering today's increasingly complex issues and taking active steps towards more innovation in development and production.

Pilot Space Industry 4.0Infineon Technologies Austria and thus the Villach site are confronting this challenge. Pilot Space Industry 4.0 is the name of the innovation concept of an intelligent, networked factory in which production is continuously optimized.

A highly flexible, new production facility is in the making, in which automated manufacturing systems and digital information technologies are linked with one another. The groundbreaking in Villach took place in September 2014. Completion of the highly modern building complex for research, production and measurement technology work-stations is planned for the autumn of 2015.

European production excellenceIn order to keep the production of key technologies such as microelectronics in Europe and to strengthen competitive abilities along the entire value creation chain, Infineon Austria also works in a European context to establish optimum basic conditions, in particular in European pilot line projects.

Since April 2013 Infineon Austria has led one of the most important European research partnerships: The EU- supported pilot line project Enhanced Power Pilot Lines. With an overall volume of €74 million and 31 partners in six countries, the project's goal is to develop the next generation of power semiconductors and bring them to market readiness. Furthermore, benefits for applications in photovoltaics, lighting and automotive electronics as well as medicinal diagnostic equipment are also being formulated.

Stronger competitive abilities

The factory of the future

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It excellent staff members form the foundation of Infineon Technologies Austria. They are the ones who develop the innovations and lend their character to corporate sites throughout Austria. And their motivation, flexibility and specialized skills make a fundamental contribution to the success of the entire company.

An active roleThis makes it all the more important to offer an attractive working environment at Infineon Austria. With a variety of initiatives and measures Infineon Austria takes an active role in shaping the basic conditions inside and outside of the individual Austrian sites, including flexible work time models and fitness and preventive health programs for a sound body and mind. Infineon thus sets the stage for a

healthy work-life balance as well as for optimum compati-bility of career and family.

Targeted supportInfineon Austria develops and implements numerous initiatives to inspire interest for technology in young talents, promote training and continuing education, further develop leadership culture and to leverage the potentials of diversity for corporate success.

Infineon Austria education initiatives appeal to all age groups: From the day care center all the way to university studies, Infineon Austria fosters active interest in Mathe-matics, Information science, Natural sciences and Technol-ogies (MINT).

Employees at Infineon Austria

Our success is people

30

Infineon Technologies Austria actively pursues the goal of winning over people with outstanding qualifications for the company on a long-term basis – regardless of their age, gender, national origin or skin color. And statistics show Infineon Technologies Austria's success: 21 percent of its staff members come from foreign countries, with a total of 60 countries represented at Infineon Austria. There is a reason for this diversity: The combination of attractive em-ployment conditions and projects with worldwide scope.

Networks helpThree pillars form the basis for Infineon Austria's diversity management: Strong promotion of women's involvement in technology and executive functions, internationality and generational balance. In particular, by living out its diversity networks Infineon Austria makes sure that there is a productive harmony both within and outside of the company.

The Gender Diversity Network with its active multipliers in Villach and Graz promotes focused measures within the corporate group aimed at increasing the number of women in technology and management.

Close collaboration with institutions such as the Carin-thian International Club (CIC) in Carinthia and the Club International (CINT) at the Graz site ensures that foreign employees feel at home in Austria both while at work and outside of the company.

Initiating knowledge transfer A special focus of the Diversity-Initiative is on knowledge transfer and generational balance. The specific goal of the Best Aging Initiative is long-term preservation of health, productivity and innovative spirit across all age groups.

A corporate culture for everyone

Living diversity together

31

Infineon places particular value on providing its employees with a working environment that promotes innovation and creativity. The prerequisite: A culture of trust, openness and flexibility on the one hand and a healthy balance between career and private life on the other.

Individual needsThis is why Infineon Technologies Austria has created a large number of programs and opportunities to promote exactly this balance. One example is the International Day Care Center (IDC) at Infineon Austria, closed on only very few days and offering flexible and long opening hours intended specifically for the needs of shift workers. Super-vision in both German and English is of special value to the children of foreign employees.

The International School Carinthia (ISC), a private all-day school with English as primary language and German as a second language, has the same objective. Here children are taught both according to the official Austrian curriculum and the learning objectives of the International Baccalaureate.

An audit can helpThe importance placed by Infineon Austria on the com-patibility of career and family is emphasized by the career and family audit berufundfamilie. This State seal of quality and the regularly conducted inspections help to follow the chosen path.

Work-life balance

Compatibility of family and career

32

Technology shapes our modern lives. It is the basis for future concepts that preserve and improve our quality of life. Infineon Technologies Austria wants to inspire people with technology, whether young or old. Its various initia-tives in this context do much to raise awareness regarding natural sciences and their phenomena.

Experiencing technology At the International Day Care Center for example, in the scienceMINIS initiative children conduct scientific experiments under the supervision of Infineon experts in miniLABs. The children also have the opportunity to encounter the world of technology in the holiday child care program Summerkids. The program has taken place each year since 2009 under the supervision of the Carinthian International Club.

Infineon Austria has created the SEMI High Tech University (HTU), a microelectronics exchange program for youth aged

13 to 14. Here youths have been introduced to technical careers each year since 2007 in collaboration with the Teacher Training College (Pädagogische Hochschule).

Open to young mindsIn collaboration with the Federation of Austrian Industries Carinthia, Infineon Austria offers secondary school students the opportunity to visit Infineon Austria and get to know modern career forms while gathering first-hand experience of technology.

An Infineon high-performance class was initiated for secondary school students at the Higher Technical Institute HTL Lastenstraße in Klagenfurt specializing on mechanical engineering and electrical engineering. In the second year of school the students can get a first-time look at the working world of Infineon during one-month vacation internships.

Initiatives for young people

Inspiring technology

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The labor market, shortages of qualified personnel, gener-ation Y – changing basic conditions require adaptations in recruiting and in the labor market approaches.

Talent for the future In this context the recruiting process at Infineon has been revised since the beginning of the year. The core is the Talent Attraction Team, whose job is to find and win the right talents for Infineon.

The Junior Talent Program of Infineon Technologies Austria offers top science and technology grad-uates attractive job opportunities. For periods of between 18 and 24 months young men and women are supported in expanding their skills and thus in making their contri-bution to the innovative power of Infineon Austria. Knowledge exchange, domestic and foreign job rotation and training are as much a part of the program as are manage-ment responsibilities in individual projects and dialog in the international network.

Furthermore, talented young people from a wide range of business areas can put their potential to the test in the custom-tailored development program Juniorenkreis.

Knowledge exchange The exchange of knowledge between Infineon and univer-

sity students is promoted as a part of the High Potential program of the Vienna University of Technology TUtheTOP. The idea here is learning both from and with one another.

Learning with created valueThe double apprenticeship as Mechatronic Technician and Electrical Engineer with a focus on plant technologies and operational facilities is a vocational training program

with a promising future and a wide variety of career opportunities. The program can also be completed with the Matura qualification for university entrance. In 2014 the first two trainees successfully completed this course with Matura at Infineon Austria.

At present around one third of all trainees are female. In order to increase this share, in 2013/2014 particular emphasis was placed on target group-oriented approaches addressed to young girls and women.

As a partner in the project of the Klagenfurt Girls' Center, Girls -Training -Technology, Infineon Austria introduced young schoolgirls to the fascination of technology on location. Girls Day takes place each year, giving elementary-school-aged girls the possibility to discover their own talents and gifts in technical areas in a playful manner.

Recruiting & training

Finding and promoting talent

Infineon's education mission: Conveying knowledge and promoting talent.

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Leadership 2020 is a program formulated specifically for management staff at Infineon Technologies Austria as part of the People Excellence strategy. The objective is to further develop leadership skills and thus to provide sustainable leadership culture within the company.

Dialog, conferences, continuing education The heart of the management staff program is regularly occurring dialog with the employees. This dialog is sup-ported by STEPS (Steps To Employees' Personal Success), an instrument for personnel development. In this way we also maintain a well-established feedback culture at Infineon in Austria.

In addition, annual management conferences are also held, at which approximately 150 management staff members work together on developing their leadership skills, as at the most recent conference in spring of

2014. Furthermore a special program for junior staff was created in collaboration with the School of Management, Organizational Development and Technology (M/O/T) as well as the University of Klagenfurt: Excellence in Leadership is the in-house training course which this year is to be held for the second time.

Lifelong learningOngoing training and continuing education are highly important in all areas as a decisive factor in the competitive strength of Infineon Austria. A correspondingly diverse, individual and high-quality program features internal and external training sessions in the following areas of expertise: Social Skills, Methods, Personality, Specialty and Leadership. On-the-job training and continuing education opportunities at external academic institutions supple-ment specialized training sessions at which experts pass on their expertise to colleagues.

Sustainable leadership culture

Planning the right steps

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Infineon Technologies Austria maintains partnerships with educational institutions in order to establish the best possible prerequisites for training and continuing education of young talented individuals in natural science and technical fields in Austria.

Successful transfer of knowledge and technology In June 2013 Infineon Austria joined with the Graz University of Technology to chart a course to even better meet demands for top performing staff in the area the power electronics in the future: Since then young talented individuals have had the opportunity to conduct research for up to six months at the renowned Center for Power Electronics Systems at the Virginia Polytechnic Institute and State University in the USA. This is an extension of the 2011 partnership on the topic of Energy-Efficient Electronic Systems (E3S) at the Faculty for Electrical Engineering and Information Technology.

For the first time in Austria, in November 2014 Infineon Austria also endowed a professorship for power electronics. €1.5 million will be invested over the next five years in the university education programs of the Faculty of Technical Sciences of The University of Innsbruck. The primary objective of this partner-ship is to intensify the transfer of knowledge and technology between the university and business. Infineon Austria will support the students in several ways, including with practical internships, in Master's and PhD theses and in the form of presentations by Infineon experts as a part of the curriculum. In the context of the professorship The University of Innsbruck will also collaborate with the Management Center Innsbruck to offer joint dissertations. Furthermore, Innsbruck will be the center of a European science and research complex with technical universities pursuing power electronics in a regional context.

Another example of positive partnerships is the High Potential program of the Vienna University of Technology, TUtheTOP. In the academic year 2013/14 Infineon Austria participated as a partner for the third time. The exchange and sharing of results between Infineon and the students let both sides extend their horizons and learn from and with one another.

Dissertations at the highest levelOne of the most significant contributions in the collaboration between univer-sities, research facilities and industry is the dissertation project. This is why last year Infineon Austria promoted and supervised more than 80 dissertations in the context of the PhD @ Infineon Austria initiative.

Educational partnerships

Partnerships with a valuable lesson

Current partnerships � First endowed professorship for power electronics with The University of Innsbruck

� High Potential Program TUtheTOP with Vienna University of Technology

� Training focus on power electronics with Graz University of Technology

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As one of the largest industrial corporations in Austria, Infineon Technologies Austria is very aware of its exemplary function. Sustainability is therefore an essential part of entrepreneurial actions on the one hand in the develop-ment of energy efficient products, and on the other hand within the company itself, where responsible and environ-mentally friendly handling of resources is practiced.

Holistic approach for man and the environment Occupational safety, health and environmental protection as well as energy management are the pillars of the holistic sustainability strategy of Infineon Austria. This strategy manifests itself in a program called Infineon Integrated Management Program for Environment, Energy, Safety and Health (IMPRES). This includes all processes, strategies and objectives in the company for protecting man and the environment.

IMPRES has guided the actions of Infineon Austria since 2005. And the topic of energy has been in the spotlight since 2012: Thus for example in 2013 the energy manage-ment was matrix certified according to ISO 50001. Infineon now fulfills the new energy efficiency requirements as adopted in July 2014.

Voluntary actionInfineon Austria works specifically on improving environmental performance. The company is supported

and driven by the Eco-Management and Audit Scheme (EMAS) of the European Union and the international environmental management standard ISO 14001, to which Infineon voluntarily obligated itself in 1997. In 2013 Infineon Austria received for the second time the EMAS Prize of the Austrian Ministry of the Environment. Infineon Austria is also the first company in Austria to be validated under the EMAS III regulation.

Health improvement with a seal of approval The needs of the employees in the semiconductor branch are great. Therefore Infineon Austria takes special care to promote health and pursue preventive care. Supported by the Company Health Service at the Villach site, specific objectives are defined in the areas of prevention, movement, nutrition and psychological health.

For this purpose Infineon Austria offers a broad range of fitness and health programs in addition to a company- internal team of mediators to provide advice in case of conflicts. Training sessions on stress management and prevention of burnout are also offered. And for those who prefer external support, psychological supervision is also available outside of the company, at no cost to the employee and completely anonymous. These activities have also earned external recognition: Infineon Austria has once again been awarded the seal of approval for corporate health improvement.

Corporate social responsibility

Sustainable business, sustainable actions

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Energy efficiency plays a central role, both in the produc-tion process and along the entire value creation chain. In 2011 Infineon Technologies Austria changed heating at the Villach production site from natural gas to district heating. As a result in recent years almost 70 percent less energy from natural gas was needed and approximately 3,000 tons of CO2 emissions could be saved within the plant annually. With up to twenty percent regenerated lost heat the factory in Villach is also among the most energy efficient in the world. And not only the environment benefits from this efficient use of regenera-tive energies: Connecting Infineon to district heating also made an essential contribution to estab-lishing the regional utility supply infrastructure.

Site expansion with a green conscienceAt Infineon Austria care is taken to emphasize low environmental impact when designing new procedures, technologies and innovations. This is particularly evident in the ongoing expansion projects at the Villach site, for example in the newly constructed research building opened in 2012 as a climate protecting Class A Klimaaktiv building. Another exemplary feature is the e-charging station set up in 2011 together with the Carinthian power utility Kelag including an integrated photovoltaic system, the procurement of an electric car and electric bikes for trips within the site.

Programs for more energy efficiencyBoth the Energy Efficiency project and the newly established energy management system represent important milestones for the sustainable continuing development of the Villach site. They are responsible for numerous projects and new ways to further increase energy efficiency. Furthermore, in the context of Best Practice Sharing, permanent exchange of information takes

place with other Infineon sites.

National and international research projects under the leadership of Infineon Austria address the topic of sustainable power generation and the use of energy both at companies and in private house-holds. Infineon Austria participated for example in the endowment of a professorship for Sustainable Energy Management at the Alpen-Adria-Universität Klagenfurt. The professorship is to concentrate in particular on networking the university with the energy industry. Involvement for example in the

subsidized project Balanced Manufacturing (BaMa) is also intended to lead to energy-saving pilot applications in production processes.

More detailed information on Environment, Safety and Energy Management at Infineon Austria can be found in the annual Environmental Statement on our Web site: www.infineon.com/austria

Energy management

Setting a good example

Environmental awareness in business and action is of central importance at Infineon.

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Performance Awards EarnedInnovationAustrian State Award for Innovation 2013, 2000

Carinthian Innovation and Research Award 2012, 2009, 2005

DICE – Upper Austrian Innovation Award,3rd place in 2008 2010, 2008

FIT- IN Project Award "Beyond Serial CMOS Links" 2007

CONEX Business Process Award 2006

Leonardo Award 2004

Quality & Supplier ReliabilityEFQM Excellence Award Finalist 2014

Austrian State Award for Corporate Quality 2012, 2001

Jury Prize for Innovation and Nomination for the State Award for Quality 2011

Artesyn "Strategic Supplier Status" 2010

Toyota "Best of Excellent Quality Award" 2009

Tridonic.Atco "Excellent Supplier 2008" 2008

Tridonic.Atco "Performance Certificate" 2010

European supply chain excellence award 2008

Recognized for Excellence 4*qualityaustria 2008

Sony Energy Devices Appreciation Award 2007

Emerson Marquee Supplier 2007

Equal Opportunity & Young Talent Development Career’s Best Recruiter

Basic Certification audit 'berufundfamilie' 2013

Business Award for Integration 2010

KNEWLEDGE State Award 2009 2010

Trigos Award Carinthia 2010, 2008

State Award for Equal Opportunities in R&D 2009

Special Prize ebiz eGovernment Award 2009, 2008

ebiz eGovernment Award Carinthia 2008

Anton- Benya Award 2008

Environmental Protection & Health EMAS Award

Trigos Award Carinthia 2012, 2007

Seal of Approval for Workplace Health Promotion 2012, 2009, 2006

Health Foundation Austria"Workplace Health Promotion", 2nd place 2008

Ecological Audit Award 2001

Published by Infineon Technologies Austria AG9500 Villach, Austria

© 2014 Infineon Technologies Austria AG. All Rights Reserved.

Order Number: B179-I0075-V1-7600-EU-ECDate: 12 / 2014

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