Joint news release by Infineon and Koncern Nauchny Centr (KNC)

Infineon and Russian KNC Cooperate in Chip Package Technology to Accelerate Development of Smart Card Markets in Russia and CIS

Munich/Germany and Moscow/Russia – September 30, 2005 – Infineon Technologies (FSE/NYSE: IFX), the world’s fourth-largest semiconductor manufacturer, and Koncern Nauchny Centr, KNC, one of Russia's largest union of high-tech companies, today announced they have agreed to co-operate in the field of chip packages specifically used in smart card applications. Based on the agreement the companies will foremost promote wirebond packaging technology in Russia and the Commonwealth of Independent States (CIS). Infineon will make available its expertise in production methods for smart card chip packages and will transfer two conventional assembly lines to KNC’s semiconductor production facility Mikron in Zelenograd in Russia. KNC on its part will integrate Infineon’s chips in its future smart cards used for different applications, such as SIM cards in mobile phones. KNC pursues its roadmap to enter production of packages for smart card chips paired with their launch of smart card production already announced earlier this year. Financial details of the collaboration and of the supply agreement were not disclosed. According to market research firm Frost & Sullivan, the world market for SIM cards used in mobile phones is expected to annually grow by 14 percent within the next years. Industry experts anticipate major growth in the Eastern Europe region. “Our partnership with world leaders in semiconductors and system solutions and using the newest technological developments will enable us to effectively develop modern chip packaging technologies at KNC,” said Alexander Goncharuk, KNC’s CEO after the agreement’s signing ceremony. “Cooperation with Infineon is our next step in the field of microelectronics. We are actively developing Russian and CIS smart cards’ markets which require state-of-the-art technologies.” “The Russian SIM card market, both strong in volumes as well as fast in migration to high-value SIM cards, needs dedicated local engagement and this cooperation with KNC is most promising as they are the strongest Russian supplier in the telecom industry,” said Andreas Liebheit, Vice President at Infineon’s Chip Card and Security ICs business unit. “This is why Infineon concentrates its work together with KNC in this field as first step; however we plan to enlarge this co-operation to other applications, such as payment and health care and social insurance cards.” Infineon is the world’s market leader in chips for card applications Infineon is the world leader in manufacturing chips for card applications. According to market research firm Gartner Dataquest, Infineon was the market leader in chips for card applications for the seventh time in a row in 2004. As the supplier of around 1.26 billion chips, the company had a 47 percent share of the total market. By sales, Infineon’s share was 38 percent of the 1.85 billion dollar market in 2004. Information of Infineon’s products for chip card and security applications is available at: http://www.infineon.com/security Information on KNC’s product offering is available at http://www.koncern.ru/eng/ About KNC OAO KNC (“Koncern Nauchny Centr”) is one of the largest diversified groups of hi-tech companies in the Russian Federation. Established in May 1997, it has the goal of pooling the company’s resources together in order to carry out large-scale projects in the electronic industry. AFK Sistema holds a majority stake in the concern. OAO KNC’s group companies operate in five main areas: production of telecommunication equipment and software (info-communication systems), system integration, introduction of ERP systems, and production of computer hardware (information technologies), development and production of semiconductors (microelectronic components), production of electronic appliances (industrial site), development, production and installation of security systems (integrated security systems). OAO KNC includes such companies, as STROM Telecom, Kvazar-Micro, Videofon MV, NIIME (Scientific and Research Institute of Molecular Electronic) and Mikron Plant, VZPP-Mikron; industrial site (Kvant Production Association and Sitronics). OAO KNC has its production facilities in Moscow, Zelenograd, Kiev, Prague, Voronezh and several other East European cities. Its products are sold in Western and Easter Europe, Russia and CIS, North America, Middle East and South-East Asia.

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. 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 2004 (ending September), the company achieved sales of Euro 7.19 billion with about 35,600 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