Infineon Achieves Industry-Best Performance of Disk Drive Read Channel Based on 90 nm Technology; Core Targeted for SoC Supporting 6 Gbs Hard Disk Serial Interface Standards

Munich, Germany/San Jose, Calif. - August 9, 2006 - Infineon Technologies AG (FSE/ NYSE: IFX) today announced it has demonstrated functionality and data rates exceeding 2.6 Gbs (gigabits per second) for a hard disk drive read channel IC (integrated circuit) core, which is the industry’s highest data rate for a 90 nm (nanometer) read channel and is almost 30 percent faster than the previous-generation devices.  The core is the third generation of read channels developed in cooperation with Hitachi Global Storage Technologies. It is being integrated into a system-on-chip (SoC) device that will contain all the functions necessary to control a hard disk drive, including a PHY (Physical Layer) core that will be the first designed to support both the 4.25 Gbs Fibre Channel and the upcoming 6 Gbs SAS (Serial Attached SCSI) and S-ATA (Serial ATA) standards. The SoC is expected to be in full production by early 2007. “The development of this read channel technology illustrates the on-going commitment and cooperation of Hitachi and Infineon to bring together their respective innovation and engineering expertise,” said Steven Smith, senior director and general manager of Rochester, Minnesota, Hitachi Global Storage Technologies. “Infineon has demonstrated leadership in silicon development and integration, and we are very pleased with the performance of the 90 nm read channel core implementation.” “High channel data rate combined with low power consumption are key to success in developing cost-effective hard disk drive SoC solutions for products used in the Enterprise market segment,” stated Sandro Cerato, general manager and vice president, ASIC Design and Security Business Unit, at Infineon Technologies AG. “The industry-best data rate achieved by the 90 nm read channel core reflects our long experience in designing ICs for drive applications, and is indicative of our commitment to the market.” The 2.6 Gbps 90 nm core is a higher speed version of a core that was announced and began sampling in 2005. It is part of the full-spectrum Infineon read channel IP portfolio, which addresses the needs of the various HDD market segments: Consumer/Ultra-Low-Power, Mobile, Desktop and Enterprise. Different versions of the channel core are derived from the same common architecture by customizing the designs to the specific target parameters of each market segment.   By the end of 2006, Infineon expects to have shipped more than 30 million S-ATA system-on-chip devices based on its current generations of read channel technology.  The performance and cost-competitiveness of Infineon S-ATA SoC solutions, combined with the company’s ASIC design and manufacturing expertise, represent a strong value proposition for hard disk drive manufacturers that have stringent time-to-volume and high-volume production support requirements.   All the 90 nm SoC products from the Infineon ASIC Design and Security Business Unit can be manufactured worldwide in multiple fabrication facilities, ensuring continuity of supply and providing customers with supply-chain flexibility and the opportunity to expand volume. Fabs currently supporting Infineon's 90 nm technology include Infineon's Dresden, Germany, facility and UMC in Taiwan. The hard disk drive market is expected to grow by almost 30 percent, from $3.3 billion in 2005 to $4.5 billion in 2009, according to research by Gartner in August 2005. In addition to its large read channel IP portfolio, Infineon is also a recognized leader in the security IC field and is a development partner for Microsoft FlexGo™ pay-as-you-go subscription computing technology. This combination uniquely positions Infineon to support the evolution of the hard disk drive market into new applications that will require greater security and innovative capabilities.

About Infineon Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for automotive, industrial and multimarket sectors, for applications in communication, as well as memory products through its subsidiary Qimonda.  With a global presence, Infineon operates through its subsidiaries in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo.  In fiscal year 2005 (ending September), the company achieved sales of Euro 6.76 billion with about 36,400 employees worldwide.  Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX).  Further information is available at http://www.infineon.com.  Further information on Qimonda is available at http://www.qimonda.com.