Infineon Technologies

We create and maximize value for our customers, shareholders, and employees by: Designing, manufacturing, and marketing the industry's most advanced semiconductor solutions and services; building upon our core competencies and our technological strength, we strive to offer our customers the industry's most comprehensive range of converging communications, Internet, and automotive solutions, comprising broadband and access, wireless, security, and storage; attracting and retaining the best talents worldwide by offering them a challenging creative environment and world-class rewards; never Stop Thinking. Infineon is listed as an IPO on the Frankfurt and New York Stock Exchanges; Rambus, Inc. files suit against Infineon for patent rights infringement. U.S. District Court dismisses Rambus' case against Infineon, and a secondary public offering nets EUR 1.5 billion. Infineon Technologies AG, the former Siemens Semiconductor, was founded on April 1, 1999, as a wholly owned spinoff of Siemens AG. The split followed the harsh price erosion in DRAMs, with Siemens Semiconductor posting a US$674 million pre-tax income loss for its 1998 fiscal year. As reported in the March 22, 1999 issue of Electronic News , Siemens Chairman Heinrich von Pierer, stated in November 1998 that the DRAM downturn "entails losses we simply cannot sustain. It is not fair to our stockholders." Volatile nature aside, one of the immediate advantages of becoming independent was that Infineon could gain many new customers outside of Siemens, although the parent company remained a major customer. This expansion of the customer base was Infineon's first major success as an independent company. The president and CEO of Siemens Semiconductors, Ulrich Schumacher, retained his position at the new company. Other markets that were established in 2000 included mobile communications, Internet access, electronic banking, electronic and mobile commerce, as well as innovative security and authentication systems, including biometric systems, such as fingertip sensors. Other sophisticated products were emerging with advanced encryption technologies and state-of-the-art security memory products and controllers, along with Infineon's first Bluetooth chipset. An international consortium of computer and communications companies for delivery was developing the Bluetooth open system standard over short-range wireless modems. However, this unbelievably profitable ride up the charts came to a screeching halt at the end of 2000 before beginning its lurching descent down the other side. In a letter to shareholders on the company Web site, CEO and President, Ulrich Schumacher, stated that the market collapse for semiconductors in 2001 had to do with the significant decline in price and demand for memory products and communications markets that usually drive growth. Because of slow growth in the communications market, demand for security and chip card ICs were also down. The end result was that Infineon's total revenues dropped 22 percent to EUR 5.7 billion in the 2001 fiscal year, compared to record revenues of EUR 7.3 billion in the 2000 fiscal year. The loss per share in 2001 was EUR 0.92, in stark contrast to the profit per share in 2000 of EUR 1.83. Schumacher explained that intensive price wars among memory products manufacturers led to "a shakeout among DRAM manufacturers," which was accompanied by increased pressure on prices for communications products in the second half of the year. The reduced demand for mobile communications alone resulted in an 18 percent drop in revenues for the Infineon's Wireless Communications. Fortunately, the security and chip card ICs had an increase in revenues of 57 percent, the automotive and industrial revenues increased 25 percent, and the wireline communications increased by 15 percent. Infineon wisely developed a set of measures called "Impact" to streamline the business and cut costs to maintain the strength and productivity of the company