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[June 07, 2004]

Frost & Sullivan Affirms Infineon Technologies' Leadership in Global Smart Card IC Market -- Third Consecutive Leadership Award for Infineon

FRANKFURT, Germany --(Business Wire)-- June 7, 2004 -- Infineon Technologies AG (www.infineon.com) is number one worldwide in the area of smart card ICs and has been awarded the 2004 Frost & Sullivan Market Engineering Leadership Award (http://www.awards.frost.com) for the third time running, for its continued and undisputed leadership in the global smart card IC market.


"Infineon is being presented with this award due to its ability to outperform competition consistently and enhance its market position even in a challenging business environment," notes Frost & Sullivan senior smart card Industry Analyst Anoop Ubhey.

In 2003, apart from battling through a difficult market, Infineon maintained its lead in the market. Infineon led the total smart card IC market with a 47.3 per cent share in terms of units and 37.1 per cent in terms of revenues generated in 2003. Considering product types also, Infineon was the leader in both the memory and microcontroller markets, accounting for 66.5 per cent in the memory market and 30.0 per cent in the microcontroller market in terms of unit shipments. It created a significant distance from its competitors, pulling ahead of its nearest rival in terms of global unit shipments by 34.2 per cent.

The company also achieved the distinction of being the market share leader in all key segments of the global smart card IC market across all principal geographic regions including the Americas, EMEA and Asia Pacific in 2003.

GSM is the flagship area for Infineon and its ascendancy in this market is growing each year. Infineon sustained market dominance in the GSM market with 30.3 per cent unit shipment market share in 2003. Since 2002, the company has enjoyed a leading position in the high-end market of 64 Kbytes microprocessor ICs. The microcontroller IC market, and in particular the GSM IC market, has been critical to Infineon's success with about 64.0 percent of its microcontroller IC business derived from mobile telephony.

"Its leadership position in the potentially explosive government and ID application market also shows how Infineon is looking ahead to up-and-coming markets and is beginning to develop products catering to this segment and generate a steady revenue stream from it," says Mr. Ubhey. The company already supplies ICs for deployment in identification card schemes in Italy, Belgium, Netherlands, India, Latvia, Oman, Hong Kong, Macao and Taiwan as well as to the U.S. Department of Defense for its common access card project.

The company has set itself the goal of burning into its chips protective mechanisms that represent the best-possible, state-of-the-art technological developments, thus protecting the data stored in its chip cards and security ICs as effectively as possible against manipulation. Infineon security smart card controllers contain more than 50 individual security mechanisms, which are integrated into the chips and are designed to protect against manipulation and illegitimate use.

In partnership with Sony Corporation, Infineon has developed a secure IC for contactless chip cards, targeting multiple application areas in banking, government, private sector and public transport systems.

"The key elements that have contributed to the success of Infineon in the smart card IC market have been its unique technology leadership strategy, its collaboration and high level of commitment to innovation and its growing network of partnerships and alliances," observes Mr. Ubhey.

By exhibiting market share leadership through the implementation of a superior market leadership strategy and for its excellence in identifying and responding to market dynamics, Infineon Technologies is a worthy three time recipient of the Frost & Sullivan Market Engineering Leadership Award.

About Frost & Sullivan

Founded in 1961, Frost & Sullivan is recognized as a global leader in growth consulting. Frost & Sullivan Awards are presented to companies that demonstrate excellence in their industry, commending the diligence, commitment, and innovative business strategies required to advance in the global marketplace. Frost & Sullivan rigorously analyzes specific criteria to determine award recipients in a vast variety of market industries and landscapes. For further information, visit www.frost.com.

About Infineon Technologies

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for the automotive and industrial sectors, for applications in the wired communications markets, secure mobile solutions as well as memory products. With a global presence, Infineon operates in the US from San Jose, Calif., in the Asia-Pacific region from Singapore and in Japan from Tokyo. In fiscal year 2003 (ending September), the company achieved sales of Euro 6.15 billion with about 32,300 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 www.infineon.com.

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