Infineon On The Move

Transcription

1 Infineon On The Move Slide -1- Infineon33rd JPMorgan Tech Conference SFO, May 18, 2005 Mark Tyndall Vice President IR & Business Development Achim Schneider Sen. Director IR & Financial Communications

2 Disclaimer Please note that while you are reviewing this information, this presentation was created as of the date listed, and reflected management views as of that date. This presentation contains certain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to the Risk Factors noted in the Company's Earnings Releases and the Company's filings with the Securities and Exchange Commission. Slide -2-

3 Agenda Financials Memory Products Communication Automotive, Industrial, Multimarket The Bottom Line Slide -3-

4 Sequential Decrease In March Vs. December* Quarter [EUR m] Q1 FY05 Q2 FY05 Change Net sales * 1,816 1,606 (210) Gross margin 39% 27% R&D in % of sales (329) 18% (354) 22% (25) SG&A in % of sales (162) 9% (164) 10% (2) EBIT * 211 (117) (328) * Q1 FY05 figures incl. a one-time EUR 118 m licensing fee from ProMOS Slide -4-

5 Maintaining A Solid Financial Cash Position [EUR m] 1H FY05 Operating cash-flow 587 Capex (841) Gross cash 2,349 March 31, 2005 Net cash 332 Total debt 2, Other investments (1) 0 Free cash flow (254) Slide -5- (1) Excluding purchase/sale of marketable securities 4.25% convertible note due Feb % convertible note due Jun 2010 Other long-term debt Short-term debt

6 Balancing Sales In All Regions Q1 FY05 * [EUR m] Q2 FY05 Europe w/o G % 19% NAFTA 334 Europe w/o G % 23% NAFTA 367 Germany % 4% Japan 84 39% APAC & Other 702 Germany % 5% Japan 82 32% APAC & Other 520 Total EUR 1,816 m * Total EUR 1,606 m Slide -6- * Q1FY05 figures incl. a one-time EUR 118 m licensing fee from ProMOS

7 Agenda Financials Memory Products Communication Automotive, Industrial, Multimarket The Bottom Line Slide -7-

8 MP: Bit Production And Shipments To Increase In June-Q IFX sales share Q2 FY05 [EUR m] MP sales and EBIT margin * % 9% 2% 17% 21% -6% 18% 26% 3% (1) Q1 FY04 Q2 Q3 Q4 Q1 FY05 Q2 MP outlook for Q3 FY05:! We expect bit-production to increase by a mid-teens percentage q-o-q based on additional shipments from Inotera and our foundry partners.! Our bit-shipments are expected to increase q-q above market growth. Slide -8- (1) Excluding antitrust-related charges / * Q1 FY05 incl. one-time EUR 118 m licensing fee

9 Accelerating The DRAM Transition To 90nm nm nm nm 256M DDR 110nm 512M DDR 90nm 512M DDR2 70nm " More than 80% of capacity converted to 110nm by end of September 2004 " Early adopter of 193nm lithography " Key innovation: - bottle shaped trench - new cell layout " IFX is 2nd player with 90nm-product validated by INTC " Start of ramp-up on 300mm planned for mid 2005 " First prototype on 300mm available since Feb 2005 Slide -9-

10 Leader In 300mm DRAM Manufacturing 2004 industry market spread on 300mm race IFX roadmap for 300mm 100% 80% Source: isuppli, February % Slide % 20% 0% FY04 FY05e FY06e FY07e FY08e FY09e

11 IFX With Smallest 256M DDR In 110nm Technology Manufacturer IFX MU Samsung Hynix Min. pitch [µm] Cell area [µm 2 ] Die area [mm 2 ] Cell efficiency [%] Slide -11- Source: Infineon, F 2

12 Premium Product Lines Further Increasing Slide -12-! Dual-die technology: 4 GByte module for server (volume) 8 GByte DDR2-400 Tall registered modules (samples) 2 GByte DDR2 SO-DIMM for notebooks (samples)! Interface: 1 GByte DDR2 Micro-DIMM for sub-notebooks (samples) FB-DIMMs for server (introduced at IDF in March)! Performance: Preferred supplier of DDR2-800 unbuff. DIMMs by Asus Unique in industry: no extra heatspreader required! Graphics: 512M GDDR3 (samples) 256M DDR2 at 450 MHz (samples)! Low-power: 512M Mobile-RAM

13 Agenda Financials Memory Products Communication Automotive, Industrial, Multimarket The Bottom Line Slide -13-

14 COM: Expect Weak Demand But Improving EBIT In June-Q IFX sales share Q2 FY05 COM sales and EBIT margin [EUR m] % COM outlook for Q3 FY05: 3% 4% 0% Q1 FY04 3% 1% -16% -5% Q2 Q3 Q4 Q1 FY05-30% -43% Q2! Sales is expected to remain flat or to decrease slightly compared to Q2 FY05, mainly due to continued weak demand from some customers for mobile phone components! EBIT is anticipated to remain significantly negative but to improve compared to Q2 FY05, as we expect our recently initiated efficiency programs to start impacting financial results positively. (1) Slide -14- (1) Excl. acquisition related expenses and net charges resulting primarily from reorganization.

15 Restructuring Of COM Business Group Well Underway January 31 # Sale of Fiber Optics transceiver business to Finisar closed. # Restructuring of other FO activities in Berlin and Munich in progress. February 1 April # Sale of part of Optical Networking to Exar closed; Business Unit to be dissolved by FY-end. 7 Slide -15- With these initiatives, we have a clearly defined path to focus our wireline communication activities on the profitable Broadband Access segment.

16 Innovations Lead To Strong Growth In Broadband Access ADSL2+ for Central Office 2004: Significant market share increase ADSL lines [M] Q4 04 Q1 04 Q2 04 Q3 04 Q4 16% 14% 12% 10% 8% 6% 4% 2% 0% Market share [%] ADSL2+ for Customer Prem. Equipment 2004: Successful market entry for ADSL2+ deployments based on ADMtek acquisition High growth in T/E business 2003: IFX +29.7%; market +5.4% 2004: IFX enjoyed further growth due 3G infrastructure build-up IFX Market Share Leading solutions for VoIP - VINETIC for IAD and VoIP line cards - INCA IP as VoIP telephone solution Slide -16- Sources: (ADSL) Dell'Oro 2005, IFX 2005; (T/E) Gartner 07/2004

17 Again Market Share Gain In RF Transceiver In 2004 Worldwide mobile phone market 2000 to 2004 Slide -17- [units m] RF BB Source: Mobile phones: Gartner, January 2005 RF transceiver and baseband: Infineon, January CY00 CY01 CY02 CY03 CY04 IFX RF transceiver IFX baseband Infineon's market share 21% 5% 10% 21% 7% 7% 11% 11% 26% 10%

18 Leading RF Transceivers Transition To CMOS BiCMOS! Best cost efficiency! Highest production flexibility utilising CMOS fabs CMOS Coming next: UMTS SMARTi U SMARTi 3G 2002 mid 2005 GSM/EDGE SMARTi DC SMARTi PM Q rd Generation: Slide -18- GSM/GPRS SMARTi DC 2001 SMARTi SD SMARTi SD (All dates refer to first customer samples available.) SMARTi SD3 Q t

19 1st With A Working Single-chip RF/Baseband Solution Infineon's RF/Baseband 1-chip modem at 3GSM 2005 Integrates:! RF CMOS transceiver SMARTi SD2! Baseband E-GOLDlite Advantages over 2-chip solution:! 30% less board space! 30% lower bill of material Slide -19- Supports:! Up to GPRS class 12! 1.3 megapixel camera! Dual color display! MP3 playback

20 Low-cost Solutions For Strong Growing Markets Cell Phone Market Segments Infineon Solutions 100% 80% 60% 40% 20% Mid Entry Ultra-high High Low-cost UMTS/EDGE # CMOS RF single-chip transceiver # 2G/3G multimedia baseband platform # 2G/3G protocol stack GSM/EDGE # CMOS RF single-chip transceiver # Multimedia baseband # Network approved protocol stack Ultra-low 0% Ultra low-cost phones # CMOS RF/baseband single-chip # Network approved protocol stack Slide -20- Source: Strategy Analytics, 03/2005

21 At 3GSM: Linux-based UMTS/EDGE Smartphone Solution Overview! Linux-based dual processor UMTS/EDGE reference design! Supporting high-end features required for a UMTS phone in 2006! Focusing on video/audio phone market! Based on Infineon MP-U UMTS/EDGE modem platform and dual-mode protocol stack as well as a 3rd party application processor Main features Slide -21-! UMTS/EDGE dual-mode Type II! Linux-based operating system! Video call and video streaming! Video recording and playback! High-performance multimedia applications! Up to 4 megapixel camera! 3D audio! 3D gaming

22 Now: Leading With Low-cost UMTS/EDGE Platform Modem Configuration! Based on IFX UMTS/EDGE platform:! Multimedia baseband! 3G co-processor! Power management! GSM/EDGE and UMTS RF transceivers! Dual-mode protocol stack! Low component count and small form factor Multimedia Features Slide -22-! 2 megapixel digital still camera! Video playback / recording! Video streaming w/o companion! MPEG4, H.263, MP3, AAC++! Voice recording / recognition! Polyphonic ringer (40 voices)

23 Agenda Financials Memory Products Communication Automotive, Industrial, Multimarket The Bottom Line Slide -23-

24 AIM: Expect Stable Sales And EBIT In June-Q IFX sales share Q2 FY05 39% [EUR m] 557 AIM sales and EBIT margin % 8% 11% 13% 8% 6% Q1 FY04 Q2 Q3 Q4 Q1 FY05 Q2 Slide -24- AIM outlook for Q3 FY05:! Sales and EBIT are expected to remain stable q-o-q as further growth in automotive is expected to be offset by continued pricing pressure in industrial area. In the security and chip card unit we anticipate continued weakness in line with the world-wide chip card market.

25 Accelerating Cost Reductions In Chip Card ICs MicroSlim technology! Volume roll-out of MicroSlim technology (66PE family)! Move cell design from 2 transistors/bit to 1 transistor/bit! Significant reduction of chip area 130nm shrink Flip-Chip-on-Substrate (FCOS)! Higher mechanical stability! Cost advantage over bonding! Ramp-up of FCOS packaging technology since January 2005 Chip card market shares Source: Frost & Sullivan, June 2004! Volume roll-out of 130nm process 12% 6% 2% 41%! First 32-bit controller with flash memory dramatically improves flexibility for the customer 12% 13% 14% Slide -25- Infineon STMirco Philips Renesas Atmel Samsung others

26 IFX Is #2 In Automotive And #1 In Power ICs With Complete Coverage Of Customers' Needs Defining automotive intelligence Applications:! Powertrain! Safety management! Body & convenience! Infotainment Products:! Sensors! Microcontrollers! Power devices! Wireless chipsets! Silicon discretes Slide -26- Key trends for power management! DC/DC - Cost /footprint per Ampere - Solution business in PC motherboard and notebook! AC/DC - Miniaturization of power supply - Higher switching frequencies Converting and controlling power Power management market [USD bn] 16.1 CAGR 13% Source: isuppli, WSTS, InStat, Infineon

27 Improving Customer Rating With Automotive Excellence TM 250% Relative (99/00 = 100%) 200% 150% 100% 50% Start of Automotive Excellence Program Slide -27-0% 99/00 00/01 01/02 02/03 03/04 - trend in March 2005 defect parts per million delivered! Decreased rate of defected parts significantly! Less complaints and recurrent failures! Increased quality awareness in the whole organization! Improved customer ratings and audit results

28 Agenda Financials Memory Products Communication Automotive, Industrial, Multimarket The Bottom Line Slide -28-

29 Infineon On The Move Slide -29-! IFX on track with 1st three phases of corporate restructuring: Reaping low-hanging fruits ( Smart savings, VC group, Emerging Businesses) Simplified organization (decentralization, P&L ownership, shorter decision paths) Sale and closing of loss makers (FO and ON units, Munich front-end)! Memory Products Business Group: Expect to gain ground against competition based on strong manufacturing base and improved product portfolio! Communication Business Group: Wireline prospects greatly improved due to continued success in xdsl CO & CPE Wireless in a difficult transition period, but strong product pipeline to support recovery in FY 2006! Automotive, Industrial, Multimarket Business Group: Active in highly attractive growth markets Productivity measures in place to improve performance in chip card

30 Q & A's Never Stop Thinking and setting the benchmark with our E-GOLDradio chip, a CMOS-based single-chip, which combines a quad-band RF transceiver part with a base-band processor, and enables the world's most integrated GSM/GPRS entry phone platform. Slide -30-