Munich, Germany and Stockholm, Sweden – Ericsson and Infineon Technologies AG have entered a long-term strategic partnership, in which Infineon will acquire the core business of Ericsson Microelectronics (MIC), Ericsson’s internal semiconductor supplier, for approximately Euro 400 million.

This transaction will be executed in a share-based deal. Approval by the responsible anti-trust authorities is pending, and closing is expected during summer 2002. This transaction makes Infineon a strategic supplier of important components for Ericsson in the areas of wireless infrastructure and mobile phones. Ericsson and Infineon will expand their cooperation for present and future wireless solutions, for instance in the areas of 2.5 and 3G.

Infineon’s wireless activities have been focusing on the high volume business of semiconductors for mobile phones. The acquisition allows Infineon to expand its business in Bluetooth solutions and radio frequency (RF) components for mobile phones as well as mobile infrastructure. MIC is today one of the world’s largest suppliers of Bluetooth components and Infineon will further strengthen its leading market position through the acquisition of MIC.

In the infrastructure segment MIC has become one of the world’s largest manufacturer for high-end power amplifiers and is one of the major suppliers and design partners to Ericsson, market leader in base stations. Infineon will combine these strong positions with its leading design and manufacturing capabilities to offer highly optimized components that are cost competitive and significantly reduce time-to-market.