IFX Day Campeon June 24, 2010 Peter Bauer Member of the Management Board Chief Executive Officer

Transcription

1 IFX Day 2010 Campeon June 24, 2010 Peter Bauer Member of the Management Board Chief Executive Officer

2 Main Messages Strategy and Actions Behind Infineon Leadership Positions Corporate transformation drives financial success. Core competencies and unique system know-how enable Infineon for leading positions in attractive growth markets. Portfolio Positioned to Outgrow the Semi Industry The company s product portfolio is positioned to grow 10 percent or more. Based on system and technological core competencies, Infineon focuses on the most promising growth opportunities for each division. Goal: Mid-Teens Segment Result Margin Company margin target is based on specific margin targets for each division. Outlook: Profitable Growth Based on Target Operating Model At ~EUR 5 billion, Infineon targets a gross margin in the high 30ies percentage with mid-teens Segment Result margin. Page 2

3 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 3

4 Corporate Transformation Drives Financial Success Management of market upturn Targeted capacity increase Allocation management Revenues FY 2010e: ~ EUR 4.2bn Portfolio management Wireless turnaround Lantiq sale Qimonda OOS 3% ATV 30% 28% IMM 30% CCS 5 % 9% Refinancing Bond issuance Capital increase WLS CCS Restructuring Cost savings Segment Result margin FY 2010e: > 10% Sum of corporate measures turned FY 2007 operating loss into >10% Segment Result margin in FY 2010, despite ~45% lower revenues. Page 4

5 Infineon Holds Leadership Positions in All Target Markets Automotive Power Chip Card Wireless * #1 #1 #1 #3 Market share Market share Market share Market share 9% 12% 26% 14% Calendar Year 2009 Source: Strategy Analytics (SA), May 2010 Calendar Year 2009 Source: IMS Research, preliminary data May 2010 Calendar Year 2008 Source: Frost & Sullivan, July 2009 Calendar Year 2009 Source: SA, February 2010 * Based on GSM/GPRS/EDGE and UMTS/WCDMA baseband units. Page 5

6 Strategic Cornerstones Aim at Expanding Leadership Positions Focus areas Core competencies Energy efficiency Communications Security Analog / Mixed-signal RF Power Embedded Control Target markets Automotive Industrial Electronics Chip Card & Security Mobile Phone Platforms Manufacturing strategy Investment in in-house manufacturing for speciality technologies. Manufacturing of standard technologies in foundries. Below 65-nanometer no investment in own plants. Page 6

7 Using Unparalleled Capabilities in Core Competencies Power Power conversion Packaging technology Digital power management Ultra thin-wafer technology SiC technology Embedded Control Real-time controller Multi-core controller Security controller embedded Flash Software / firmware ~40% ~40% ~20% Audio codec A/D and D/A conversion Cellular modem power management Analog / Mixed-signal SiGe technology RF transceiver Analog frontend for remote keyless entry contactless chip cards RF Page 7

8 and Unique System Know-how Power Embedded Control Powertrain Airbag Steering Climate control Night vision Park distance control Safety Cooling FAN Hybrid Light Adaptive cruise control Transmission Engine Battery management Blindspot detection Mirror Dashboard Door Central lock TPMS Suspension Brake ABS/ESP Body & Convenience Analog / Mixed-signal Nico Kelling (IFJ AIM MC) RF Page 8

9 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Automotive Industrial & Multimarket Chip Card & Security Wireless Solutions Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 9

10 Semi Industry Enters the Next Growth Phase [USD bn] 221 Peak CAGR +3.1% CAGR +4.8% CAGR +9.6% Peak Trough CAGR +9.2% Trough e 2014e Revenue total semiconductor market Source: isuppli, Application Market Forecast Tool (AMFT) Q1 2010, Worldwide Semiconductor Shipment Forecast, March 25, 2010 Page 10

11 Market CAGR [%] Exposure to High-Growth Markets Positions: IFX to Grow at Least as Fast as the Industry Market growth 12% 11% Industrial Automotive 10% 9% 8% 7% 11.1% 10.6% Up-cycle market growth 9.2%* Wireless Chip card 8.1% 7.7% 6% 5% 4% 3% 2% 1% 0% -1% Total Available Market 2009 [USD bn] *Source: isuppli, AMFT Q1 2010, March 25, Up-cycle market growth = CAGR ( ). Page 11

12 Portfolio of Businesses Positioned to Outgrow the Semi Industry IFX Divisions Up-cycle CAGR Automotive >10% Industrial & Multimarket >10% Chip Card & Security In line with market Wireless Solutions High single-digit % IFX Group ~10% or more Page 12

13 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Automotive Industrial & Multimarket Chip Card & Security Wireless Solutions Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 13

14 Automotive Semiconductor Growth Driven by Strong Recovery in Global Auto Production Automotive semi market Annual production of light vehicles Source: isuppli, March 2010 Source: CSM, June 2010 [USD bn] CAGR +10.6% [units m] CAGR +8.4% e 2011e 2012e 2013e 2014e e 2011e 2012e 2013e 2014e Page 14

15 Infineon ATV is Global Number 1 Infineon track record of share gains in automotive semi market Ranking CY 2009 * 8.2% 9.0% 1. Infineon 9.0% 2. Freescale 8.0% 5.7% 3. STM 7.7% 4. NEC 7.3% 3.9% 5. Renesas 7.0% 6. NXP 6.4% 7. Toshiba 5.6% Bosch 4.9% Source: Strategy Analytics, April 2010; based on revenues. * Market size: USD 14.4 billion. Page 15

16 ATV Will Benefit from Multiple Growth Opportunities Electrification of powertrain Best-in-class powertrain products System and application know-how Optimized hybrid and electric drivetrain products Energy management concepts Replacement of relais and mechanical functions by electrification More stringent safety and CO 2 regulations Dedicated sensor, power and microcontroller products Safety standard compliant products Innovative sensor technologies: magnetics (Hall, igmr), MEMS (inertia, pressure) and SiGe (Radar, ACC) Affordable cars for emerging countries Scalable product portfolio to address low cost car design and production Easy to integrate chipset solutions for safety, powertrain and body Software and support to enable emerging country OEM and Tier-1s Optimized chipsets for E-bikes Page 16

17 IFX ATV Is Best-Positioned to Capitalize on Market for Hybrid and Electric Cars Automotive semiconductors Perfect match for hybrid and electric cars Power semiconductors #1 # Page 17

18 Infineon Is Addressing All Automotive Applications of Electro-Mobility Lowvoltage battery HV auxiliaries M HV-LV DC/DC High-voltage boardnet Battery mgmt. High-voltage battery Inverter Highpower DC/DC Charger AC/DC Page 18

19 80% of Each Additional USD of Semi Content per HEV/EV Based on Power Semiconductors Semiconductor content per car [USD] 1000 ~ ~ ~ Standard car Mild hybrid Electric vehicle Page 19

20 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Automotive Industrial & Multimarket Chip Card & Security Wireless Solutions Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 20

21 IMM Recovery Driven by Multitude of Growth Applications Industrial & Multimarket semi market Source: isuppli, March 2010 [USD bn] CAGR +11.1% Power modules for industrial motor drives Source: IMS, March 2010 [USD bn] CAGR +12.7% n.a e 2011e 2012e 2013e 2014e e 2011e 2012e 2013e 2014e Page 21

22 Infineon is Global Number 1 IFX track record of share gains in power semi market 11.7% Ranking CY 2009 * 8.1% 9.4% 9.6% 1. Infineon 11.7% 2. Toshiba 7.8% 3. Fairchild 6.9% 4. STM 6.6% 5. Vishay 6.4% 6. Mitsubishi 4.9% 7. Fuji Electric 3.9% International 3.5% Rectifier Source: IMS Research, Global Market for Power Semiconductor Discretes & Modules, ; based on revenues. * 2009 figures based on preliminary report from May Market size: USD 10.1 billion. Page 22

23 Infineon IMM Driven by Diverse Range of Power Electronics Growth Markets Variable speed drive Hundreds of millions of motors to be replaced Low penetration of VSD Replacement cycle to continue for decades Infrastructure Trains Power transmission and distribution Smart grid Renewable energies On-shore and off-shore wind parks Photovoltaic system Power management Power supplies Digital power management LED lighting Architectural lighting Street lights Bulb replacement LCD backlighting Page 23

24 One Out of Four Industrial Drives is Equipped With Infineon s IGBT Technology Drives Pumps Fans Variable speed drives (VSD) with growth potential for decades to come Hundreds of millions of motors in use. Performance range from few watts up to megawatt. Huge potential, since only few motors equipped with VSD. Increasingly more new motors equipped with VSD. Page 24

25 LEDs Are Not Just Energy Saving But also Allow New Illumination Effects LEDs are currently the most energy efficient lamps. Their life-time is 10x longer than the one of conventional lamps, replacement is less often. To be competitive, they need to become cheaper. Infineon delivers LED drivers for various ATV and IMM applications. Application examples Architectural lighting Jewelry case lighting Retro-fit lamps Interieur illumination Dim light, high beam Page 25

26 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Automotive Industrial & Multimarket Chip Card & Security Wireless Solutions Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 26

27 Chip Card Semi Market: Increasing Demand For Security in Gov-ID and Regional Markets Chip Card semi market Government and ID chip cards Source: isuppli, March 2010 CAGR [USD bn] +7.7% [units m] Source: Frost & Sullivan, December CAGR +7.6% e 2011e 2012e 2013e 2014e e 2011e 2012e 2013e 2014e Page 27

28 Chip Card & Security Segment: Preserving Leadership Whilst Re-orienting Portfolio Focus on portfolio instead of market share 37.1% 35.0% 28.7% 29.2% 26.6% Ranking CY 2008 * 25.5% 1. Infineon 25.5% 2. Samsung 22.0% 3. Renesas 15.3% 4. NXP 14.5% 5. STM 9.6% 6. Atmel 6.2% Source: Frost & Sullivan, October 2009; CY 2009 market share available end of June 2010; based on revenues. * Market size: USD 2.4 billion. Page 28

29 CCS Focus on New, High-Margin Applications Government identification e-passports National e-id cards e-health care cards e-drivers license Payment Contactless payment Mobile payment / NFC Transport / ticketing Embedded security Trusted platform module Authentication in consumer applications M2M communication Automotive applications (e.g. digital tachograph) Emerging security applications (e.g. smart metering) Page 29

30 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Automotive Industrial & Multimarket Chip Card & Security Wireless Solutions Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 30

31 Wireless Semiconductor Market Global Cellular Devices Driving Growth Wireless semi market Source: isuppli, March 2010 CAGR [USD bn] +8.1% Global cellular device sales Source: Strategy Analytics, Sept [units bn] CAGR +7.7% e 2011e 2012e 2013e 2014e e 2011e 2012e 2013e 2014e Page 31

32 Wireless Solutions Segment Number 3 in Both Target Markets, Growing Fast IFX market share growth in GSM / GPRS / EDGE basebands UMTS / W-CDMA basebands 13.4% Ranking CY 2009 * 1. TI 33.7% 2. MediaTek 32.7% Ranking CY 2009 * 14.1% 1. TI 30.4% 2. Qualcomm 29.8% 12.4% 3. Infineon 13.4% 4. ST-Ericsson 11.7% 7.2% 3. Infineon 14.1% 4. ST-Ericsson 14.1% 5. Broadcom 3.7% 5. Broadcom 2.9% 6. Spreadtrum 1.1% 6. Marvell 2.1% Marvell 1.1% NEC 1.5% Source: Strategy Analytics, February 2010; based on units. * Market size GSM/GPRS/EDGE: 956 million units; market size UMTS/W-CDMA: 282 million units. Page 32

33 Infineon WLS Capitalizing on Mass-Market, Smart Phones and Connected Devices Mobile phones Trend towards system-on-chip solutions. Ramp of single-chip platforms (XMM 1100/2130) at Nokia and other tier-1 OEMs. 3G entry and Dual-SIM platforms. Leading customer base. Smartphones Ramp of HSUPA platforms XMM 6160 and XMM 6180 at several tier-1 OEMs. Slim modems: lowest power consumption and smallest size. Entry-level smartphone platform. Leading customer base. Connected devices Strong market growth. Leading position in M2M. Slim modems with lowest power consumption and smallest size for tablet PCs and other connected devices. Page 33

34 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 34

35 All Segments to Contribute to Solid Operating Margins IFX Divisions Margin potential Automotive Mid to high teens % Industrial & Multimarket High teens % Chip Card & Security >10% Wireless Solutions >10% IFX Group Mid teens % Page 35

36 Infineon ATV Maintaining Industry-Leading Margins [EUR m] Q2 FY 2008 Q2 FY 2010 Longer term % % mid - high teens % Revenue Segment Result Segment Result margin After solid recent margin progress, profitability already in target range. Increase distribution share with tier-2 and tier-3 customers3. Constant cost and margin optimization across industry-leading footprint. Page 36

37 Infineon IMM Maintaining Industry-Leading Margins [EUR m] Q2 FY 2008 Q2 FY 2010 Longer term % % high teens % Revenue Segment Result Segment Result margin After solid recent margin progress, profitability already in target range. High margins driven by superior products, e.g. lower losses, higher power density. Going forward, growing focus on power ICs and digital power management business. Page 37

38 Mix Improvement and Shrinks to Drive Margin in CCS [EUR m] Q2 FY 2008 Q2 FY 2010 Longer term % 3 3% >10% Revenue Segment Result Segment Result margin Product mix optimization ( fix the mix ): C'less and DDA payment, Gov-ID, NFC SIM. New embedded security applications. Fast shrinks: 90-nanometer in FY 2010, 65-nanometer (outsourced) in FY Page 38

39 Further Share Gains to Drive Margin in WLS [EUR m] Q2 FY 2008 Q2 FY 2010 Longer term % 3.4% 9 >10% Revenue Segment Result Segment Result margin Grow scale further by ramping existing design wins in 2G and 3G. Leverage fabless transition. Execute on R&D efficiency program. Page 39

40 Table of Contents Strategy and Actions Behind Infineon Leadership Positions Portfolio Positioned to Outgrow the Industry Goal: Mid-Teens Segment Result Margin Outlook: Profitable Growth Based on Target Operating Model Page 40

41 Target Operating Model Mid Teens Segment Result Margin FY 2009 FY 2010e Longer term Revenues EUR 3.03bn High 30ies % growth yoy At ~EUR 5bn Gross Margin 21.8% Mid 30ies % High 30ies % R&D-to-sales 15.5% ~14% Low-to-mid teens % SG&A-to-sales 13.0% ~10% ~10% Segment Result margin -5.5% >10% Mid teens % Page 41

42 Transforming Infineon into a High-Growth, High-Margin Company Transformation based on: active portfolio management, leading market shares in target markets, operating structure along customers and target markets, focus on technological core competencies in power, embedded control, analog/mixed-signal, and RF, and superior understanding of customer systems. Portfolio capable of outgrowing predicted semiconductor market growth of ~10%. Target operating model of gross margin in the high 30ies % and 15% Segment Result margin at ~EUR 5bn of sales. Page 42

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44 Disclaimer This presentation was prepared as of June 24, 2010 and is current only as of that date. This presentation includes forward-looking statements about the future of Infineon s business and the industry in which we operate. These include statements relating to general economic conditions, future developments in the world semiconductor market, our ability to manage our costs and to achieve our growth targets, the resolution of Qimonda s insolvency proceedings and the liabilities we may face as a result of Qimonda s insolvency, the potential disposition or closure of our ALTIS joint venture, the benefits of research and development alliances and activities, our planned levels of future investment, the introduction of new technology at our facilities, our continuing ability to offer commercially viable products, and our expected or projected future results. These forward-looking statements are subject to a number of uncertainties, such as broader economic developments, including the sustainability of recent improvements in the market environment; trends in demand and prices for semiconductors generally and for our products in particular, as well as for the end-products, such as automobiles and consumer electronics, that incorporate our products; the success of our development efforts, both alone and with partners; the success of our efforts to introduce new production processes at our facilities; the actions of competitors; the availability of funds; the outcome of antitrust investigations and litigation matters; and the resolution of Qimonda s insolvency proceedings; as well as the other factors mentioned in this presentation and those described in the Risk Factors section of our most recent annual report on Form 20-F on file with the U.S. Securities and Exchange Commission. As a result, Infineon s actual results could differ materially from those contained in or suggested by these forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements. Infineon does not undertake any obligation to publicly update or revise any forwardlooking statements in light of developments which differ from those anticipated. Page 44