Infineon Technologies : Positive earnings and free cash flow development. Increase in revenue despite difficult supply environment. Strong final quarter expected

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Re l e a s e

Positive earnings and free cash flow development. Increase in revenue despite difficult supply environment. Strong final quarter expected

Q3 FY 2021: Revenue €2.722 billion; Segment Result €496 million; Segment Result Margin 18.2 percent; free cash flow €477 million Outlook for Q4 FY 2021: Based on an assumed exchange rate of US$1.20 to the euro, revenue of around €2.9 billion is expected. On this basis, Segment Result Margin is forecast at around 19 percent

Outlook FY 2021: Based on the outlook for Q4 FY 2021, revenue for the full fiscal year is predicted at about €11 billion. At this level, a Segment Result Margin of above 18 percent is expected. Investments still expected at approximately €1.6 billion. Free cash flow anticipated to come in around €1.5 billion

Neubiberg, Germany, 3 August 2021 - Today, Infineon Technologies AG is reporting results for the third quarter of the 2021 fiscal year (period ended 30 June 2021).

"Demand for semiconductors is unbroken, as they play a key role in enabling the energy transition and digitalization. Currently, however, the market is faced with an extremely tight supply situation," said Dr. Reinhard Ploss, CEO of Infineon. "Inventories are at a historic low; our chips are being shipped from our fabs straight into the end applications. Under these circumstances, any pandemic- related restrictions on manufacturing, such as those recently imposed in Malaysia, are especially grave. We are doing our utmost to improve matters along the entire value chain and are working as flexibly as possible in the best interests of our customers. At the same time, we are continuously building up additional capacity."

For the Business and Trade Press: INFXX202108.089e
Bernd Hops (Headquarters)	Tel.: +49	89 234 23888	[e-mail]	Investor Relations:
Judy Davies (Americas)	Tel.: [phone]	[e-mail]	Tel.: [phone]
Chi Kang David Ong (Asia-Pacific)	Tel.: +65	6876 3070	[e-mail]	[e-mail]
Lin Zhu (Greater China)	Tel.: +86	21 6101 9199	[e-mail]
Yasuyuki Kamiseki (Japan)	Tel.: +81	3 5745 7544	[e-mail]

- 2 -

The Cypress Semiconductor Corporation ("Cypress") has been fully consolidated since 16 April 2020. The comparability of current figures with the same period of the previous year is therefore limited.

€ in millions (unless otherwise stated)

Revenue

Segment Result

Segment Result Margin (in %)

Income (loss) from continuing operations

Income from discontinued operations, net of income taxes

	3 months		sequential	3 months		year-on-	3 months
	ended		ended		year	ended
		+/- in %
	30 Jun 21		31 Mar 21		+/- in %	30 Jun 20
	2,722	1		2,700	25		2,174
	496	6		470	+++		220
	18.2%				17.4%				10.1%
	245	17		209	+++		(128)
	-	+++		(6)	-		-

Net income (loss)		245	21		203	+++		(128)
Basic earnings per share (in euro) attributable
to shareholders of Infineon Technologies AG:1
Basic earnings (loss) per share (in euro) from	0.18	20		0.15	+++		(0.11)
continuing operations
Basic earnings per share (in euro) from discontinued	-	-		-	-		-
operations
Basic earnings (loss) per share (in euro)		0.18	20		0.15	+++		(0.11)
Diluted earnings per share (in euro) attributable
to shareholders of Infineon Technologies AG:1
Diluted earnings (loss) per share (in euro) from	0.18	20		0.15	+++		(0.11)
continuing operations
Diluted earnings per share (in euro) from discontinued	-	-		-	-		-
operations
Diluted earnings (loss) per share (in euro)		0.18	20		0.15	+++		(0.11)
Adjusted earnings per share (in euro) - diluted1,2		0.27		13		0.24		+++		0.13
Gross margin (in %)		39.1%				36.0%				27.0%
Adjusted gross margin3 (in %)		41.8%				39.3%				35.9%

1. The calculation for earnings per share and adjusted earnings per share is based on unrounded figures.
2. The reconciliation of net income to adjusted net income and adjusted earnings per share is presented on page 10.
3. The reconciliation of cost of goods sold to adjusted cost of goods sold and adjusted gross margin is presented on page 11.

Group performance in third quarter of 2021 fiscal year

In the third quarter of the current fiscal year, Group revenuerose by €22 million to €2,722 million, compared to €2,700 million in the preceding three-month period. Despite continued strong demand, revenue grew by only 1 percent due to pandemic-related constraints on our manufacturing capacity in Melaka, Malaysia, and the aftermath of the winter storm in Austin, Texas. These various factors have primarily affected the Automotive (ATV) and Power & Sensor Systems (PSS) segments, both of which saw a decline in revenue compared to the previous quarter. By contrast, the Industrial Power Control (IPC) and Connected Secure Systems (CSS) segments recorded revenue growth.

The gross marginimproved significantly from 36.0 percent to 39.1 percent quarter- on-quarter. The adjusted gross marginfor the three-month period under report came in at 41.8 percent, up from 39.3 percent in the preceding quarter.

For the Business and Trade Press: INFXX202108.089e

Bernd Hops (Headquarters)	Tel.: +49	89 234 23888	[e-mail]	Investor Relations:
Judy Davies (Americas)	Tel.: [phone]	[e-mail]	Tel.: [phone]
Chi Kang David Ong (Asia-Pacific)	Tel.: +65	6876 3070	[e-mail]	[e-mail]
Lin Zhu (Greater China)	Tel.: +86	21 6101 9199	[e-mail]
Yasuyuki Kamiseki (Japan)	Tel.: +81	3 5745 7544	[e-mail]

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The Segment Resultincreased from €470 million to €496 million quarter-on- quarter, with the Segment Result Marginrising from 17.4 percent to 18.2 percent.

The non-segmentresultfor the third quarter was a net loss of €149 million, compared to a net loss of €156 million in the previous three-month period. The non-segment result for the quarter included €74 million of cost of goods sold, €60 million of selling, general and administrative expenses and €6 million of research and development expenses. Net other operating expenses amounting to €9 million were also recorded in the third quarter.

Operating incomefor the third quarter of the current fiscal year rose to

€347 million, compared with €314 million in the preceding three-month period.

The financial resultamounted to minus €56 million compared with minus €42 million in the previous quarter.

The tax expenseadded up to €49 million, down from €62 million one quarter earlier.

Income from continuing operationsimproved from €209 million to €245 million quarter-on-quarter.Income from discontinued operationsin the third quarter was break-even, compared to a loss of €6 million in the previous three-month period. Accordingly, net incomefor the third quarter of the current fiscal year also amounted to €245 million, compared with €203 million one quarter earlier.

Earnings per share from continuing operationsincreased to €0.18 (basic and diluted), compared to €0.15 in the preceding three-month period. Adjusted earnings per share1 (diluted) improved from €0.24 to €0.27 quarter-on-quarter.

Investments- which Infineon defines as the sum of purchases of property, plant and equipment, purchases of other intangible assets and capitalized development costs - totaled €285 million in the third quarter of the 2021 fiscal year, compared with €332 million in the preceding three-month period. Depreciation and amortizationincreased from €368 million to €380 million quarter-on-quarter.

1 Adjusted net income and adjusted earnings per share (diluted) should not be seen as a replacement or superior performance indicator, but rather as additional information to the net income and earnings per share (diluted) determined in accordance with IFRS. The detailed calculation of adjusted earnings per share is presented on page 10.

For the Business and Trade Press: INFXX202108.089e

Bernd Hops (Headquarters)	Tel.: +49	89 234 23888	[e-mail]	Investor Relations:
Judy Davies (Americas)	Tel.: [phone]	[e-mail]	Tel.: [phone]
Chi Kang David Ong (Asia-Pacific)	Tel.: +65	6876 3070	[e-mail]	[e-mail]
Lin Zhu (Greater China)	Tel.: +86	21 6101 9199	[e-mail]
Yasuyuki Kamiseki (Japan)	Tel.: +81	3 5745 7544	[e-mail]

- 4 -

Free cash flow2 continued to improve in the third quarter of the current fiscal year, rising to €477 million, compared with €407 million in the previous quarter. Net cash provided by operating activities from continuing operationswent up from

€742 million to €762 million.

At the end of the third quarter, the gross cash positionstood at €3,863 million, up from €3,444 million at 31 March 2021. Net debtdecreased further from

€3,415 million to €2,945 million over the course of the three-month period. Gross debtamounted to €6,808 million at the end of the third quarter, compared with €6,859 million at 31 March 2021.

Outlook for the fourth quarter of the 2021 fiscal year

Based on an assumed exchange rate of US$1.20 to the euro, Infineon expects to generate revenueof around €2.9 billion in the fourth quarter of the 2021 fiscal year. While demand is rising at a dynamic pace, the overall supply situation remains tight due to various factors, including the pandemic-related manufacturing restrictions in Melaka, Malaysia, at the beginning of the quarter. In light of ongoing bottlenecks, revenue generated by the ATV and IPC segments is likely to remain at a similar level to the previous quarter. The CSS segment is forecast to record a slightly higher level of revenue. PSS segment revenue is set to rise sharply, mainly due to the recovery of demand for smartphones. At the level of revenue currently forecast, the Segment Result Marginis expected to come in at about 19 percent.

Outlook for the 2021 fiscal year

Based on the predicted level of revenue for the fourth quarter and an assumed unchanged exchange rate of US$1.20 to the euro, revenueis expected to total around €11 billion for the full 2021 fiscal year. At this level, the Segment Result Marginis forecast to come in at above 18 percent.

Investmentsin property, plant and equipment, intangible assets and capitalized development costs for the 2021 fiscal year are forecast at an unchanged level of around €1.6 billion. Depreciation and amortizationare also expected to remain unchanged at between €1.5 billion and €1.6 billion, of which approximately €500 million is attributable to depreciation and amortization from purchase price allocations arising mainly in connection with the acquisition of Cypress and to a

2 For definitions and the calculation of free cash flow and of the gross and net cash position, please see page 13. For the Business and Trade Press: INFXX202108.089e

Bernd Hops (Headquarters)	Tel.: +49	89 234 23888	[e-mail]	Investor Relations:
Judy Davies (Americas)	Tel.: [phone]	[e-mail]	Tel.: [phone]
Chi Kang David Ong (Asia-Pacific)	Tel.: +65	6876 3070	[e-mail]	[e-mail]
Lin Zhu (Greater China)	Tel.: +86	21 6101 9199	[e-mail]
Yasuyuki Kamiseki (Japan)	Tel.: +81	3 5745 7544	[e-mail]

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lesser extent with the acquisition of International Rectifier. Free cash flowis now anticipated to come in at around €1.5 billion.

Besides geopolitical and macroeconomic factors, the economic disruption caused by the coronavirus pandemic makes accurate prediction difficult. Key factors influencing the expected development of revenue and earnings during the pandemic will be the progression of global infection rates over time, the progress of vaccination campaigns, possible restrictions on economic activities, effects on production and supply chains, and the level and effectiveness of governmental stimulus programs.

Segment earnings in the third quarter of the 2021 fiscal year

€ in millions (unless otherwise stated)		in %	3 months		sequential	3 months		year-on-	3 months
		of total	ended		ended		year	ended
			+/- in %
		revenue	30 Jun 21		31 Mar 21		+/- in %	30 Jun 20
Infineon
Revenue	100		2,722	1		2,700	25		2,174
Segment Result				496	6		470	+++		220
Segment Result Margin (in %)				18.2%				17.4%				10.1%
Automotive (ATV)1
Segment Revenues	44		1,205	(1)		1,219	49		810
Segment Result				199	1		197	+++		(26)
Segment Result Margin (in %)				16.5%				16.2%				(3.2%)
Industrial Power Control (IPC)
Segment Revenues	15		412	14		361	13		366
Segment Result				82	39		59	30		63
Segment Result Margin (in %)				19.9%				16.3%				17.2%
Power & Sensor Systems (PSS)
Segment Revenues	28		757	(4)		787	11		681
Segment Result				167	(9)		184	17		143
Segment Result Margin (in %)				22.1%				23.4%				21.0%
Connected Secure Systems (CSS)1
Segment Revenues	13		346	5		329	11		312
Segment Result				47	57		30	21		39
Segment Result Margin (in %)				13.6%				9.1%				12.5%

Other Operating Segments (OOS)
Segment Revenues	0
Segment Result
Corporate and Eliminations (C&E)
Segment Revenues	0
Segment Result

2

-

-

1

(50)	4
-	-
-	-
+++	-

(60)	5
---	1
-	-
+++	-

1 The business with the XMC family of industrial microcontrollers was transferred from the Automotive segment to the Connected Secure Systems segment with effect from 1 October 2020. The previous year's figures have been adjusted accordingly.

ATV segment revenuetotaled €1,205 million in the third quarter of the current fiscal year, compared to €1,219 million in the preceding three-month period. Held down by restricted manufacturing capacities, revenue dropped slightly by

1 percent, while demand continued to rise across all product areas. The Segment

For the Business and Trade Press: INFXX202108.089e
Bernd Hops (Headquarters)	Tel.: +49	89 234 23888	[e-mail]	Investor Relations:
Judy Davies (Americas)	Tel.: [phone]	[e-mail]	Tel.: [phone]
Chi Kang David Ong (Asia-Pacific)	Tel.: +65	6876 3070	[e-mail]	[e-mail]
Lin Zhu (Greater China)	Tel.: +86	21 6101 9199	[e-mail]
Yasuyuki Kamiseki (Japan)	Tel.: +81	3 5745 7544	[e-mail]