Read Channel License Agreement with Hitachi Enables Infineon to Offer Advanced Silicon Chip Solutions for Hard Disk Drives

Munich, Germany – September 8, 2004 – Infineon Technologies AG (IFX: FSE, NYSE) today announced that it has signed a long term license agreement with Hitachi Global Storage Technologies (Hitachi GST) on read channel technology for hard drive applications. Under the agreement, Infineon has the right to use Hitachi read channel technology to develop and produce SoC (System-on-Chip) and stand-alone read channel devices for hard drives. The agreement covers read channel technology developed by Hitachi for 0.13 micron and 90 nanometer process tecnologies, with the possibility to extend it to future technologies.

“We are very pleased about this technology licensing agreement with Hitachi GST,” said Sandro Cerato, General Manager and Vice President, ASIC and Design Solutions unit at Infineon Technologies AG. “The performance and cost competitiveness of Hitachi’s read channel, combined with Infineon’s ASIC design and manufacturing expertise, represents an incredible value proposition for our customers that will strengthen Infineon’s position as a supplier to hard drive manufactuers.”

The Hitachi read channel technology performs at data rates up to 1.8 Gbit/s using Infineon's advanced 0.13 micron process and supports advanced features such as perpendicular recording. The silicon has been proven in previous generation implementations that are currently in production in both SoC and stand-alone read channel configurations. Samples of 2.4 Gbit/s technology will be available with Infineon’s 90 nanometer process in the mid of 2005.

Hitachi GST was founded in 2003 as a result of the strategic combination of the storage technology businesses of Hitachi and IBM. Hitachi GST offers customers worldwide the most comprehensive range of storage products for desktop computers, high-performance servers and mobile devices. The company regularly delivers technology advancements that boost the feature set and performance characteristics of its hard drives.

“The development of this read channel technology further demonstrates Hitachi’s innovative spirit and engineering expertise,” said Steven Smith, Senior Director & Deputy General Manager, Advanced and Common Technology Development, Hitachi Global Storage Technologies. “Infineon has demonstrated leadership in silicon integration and we are pleased to have signed this license agreement with them.”

In January, 2004, the two companies announced that Hitachi GST had selected Infineon chips to enable 3 Gbit/s Native SATA (Serial ATA) capabilities in future versions of its Deskstar hard disk drives.

“Today, customers require solutions with increased performance, lower cost and a higher level of integration. The availability of Hitachi read channel technology will allow Infineon to offer the complete SoC solution and confirm the Infineon commitment to the HDD business,” stated Dr. Reinhard Ploss, Senior Vice President & General Manager of Automotive and Industrial business group at Infineon Technologies AG.

Using the flexibility of Infineon's 0.13 micron process, new generation chips from the Infineon ASIC and Design Solutions Group can be manufactured worldwide in multiple fabs, allowing customers additional supply-chain flexibility and opportunity to expand. This is a very important value proposition in the hard drive industry, especially for high-volume applications like mobile, consumer and desktop PCs. Fabs currently offering Infineon's 0.13 micron technology include Altis Semiconductor in France, a joint venture operated with IBM, Infineon's Dresden fab in Germany, and UMC in Taiwan.

About Infineon

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for the automotive and industrial sectors, for applications in the wired communications markets, secure mobile solutions as well as memory products. With a global presence, Infineon operates in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In fiscal year 2003 (ending September), the company achieved sales of Euro 6.15 billion with about 32,300 employees world-wide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at www.infineon.com.