April 26, 2006 – Infineon Technologies AG swung to an 22 million euro (US $27.2 million) EBIT profit in fiscal 2Q06 vs. a 122 million euro ($150.9 million) loss in the prior quarter, due largely to improvement in the memory products segment.

Overall company sales rose 19% sequentially to 1.99 billion euro ($2.46 billion), while net loss shrunk to 26 million euro ($32.3 million) from 183 million euro ($227.4 million) in fiscal 1Q06. Compared with a year ago, revenues increased 24%, while the net loss was reduced by 77%.

Revenues in the company’s memory products segment improved significantly sequentially, due to a strong reduction in cost/bit thanks to significantly higher bit shipments, and a slight increase in average selling prices — driven mainly by higher pricing and shipments of DDR2 memories and a higher shipment mix of specialty products. EBIT profits for the memory unit swung from a 118 million euro ($146.6 million) loss to a 30 million euro ($37.3 million) profit.

Also, “Very strong” EBIT increase in the automotive, industrial, and multimarket business units more than offset a slightly increased EBIT loss in the communication solutions segment, the company said.

“The second quarter results demonstrate that both the memory products business and the logic business are well positioned to operate successfully as separate companies in the future,” stated Wolfgang Ziebart, Infineon president and CEO.

For fiscal 3Q06, Infineon expects a decline in its logic segments compared with 2Q06. Its memory unit, renamed Qimonda, will be officially spun off on May 1. A 30 million euro ($37.3 million) gain from the March IPO of Inotera Memories Inc., the JV between Infineon and Nanya Technology Corp., will be recorded in fiscal 3Q06. Costs associated with the restructuring of Altis Semiconductor, Infineon’s JV with IBM in France, is expected to have a minor impact on 3Q06 group results.