Infineon Rockwell Automation User Manual

First Quarter FY 2020 Quarterly Update

Infineon Technologies AG Investor Relations

Agenda

Infineon at a glance

Planned acquisition of Cypress

Quarterly highlights

Automotive

Industrial Power Control

Power Management & Multimarket

Digital Security Solutions

Selected financial figures

ATV IPC PMM DSS

Power embedded control RF & Sensors

Infineon at a glance

Automotive Power Security ICs

897

982

1,208

1,353

1,319

5,795

6,473

7,063

7,599

8,029

15.5%

15.2%

17.1%

17.8%

16.4%

3000

6000

9000

FY15 FY16 FY17 FY18 FY19

Revenue Segment Result Margin

[EUR m]

44%

18%

30%

Automotive (ATV)

Industrial Power Control (IPC)

Digital Security Solutions (DSS)

Power Management & Multimarket (PMM)

[EUR m]

3,503

1,418

2,445

642

Revenue in FY19: €8,029m incl. OOS and C&E of €21m

Financials

Market Position

FY19 revenue by segment

FY19 revenue by product category

# 2 # 1 # 2

Strategy Analytics,

April 2019

Informa Tech,

September 2019

ABI Research,

September 2019

Infineon is a long-standing member of Europe's

leading sustainability indices

› Feb 2019: Infineon is listed in

the Sustainability Yearbook for the 9thconsecutive year

Infineon's most recent achievements

› Jul 2018: Infineon was added to the FTSE4Good Index Series in 2001 and has been

confirmed as a member since then

› Since 2014, Infineon has been publishing information on opportunities and risks due to

climate change through the "Carbon Disclosure Project" (CDP)

› Mar 2019: Infineon has been reconfirmed as a constituent of the Ethibel Sustainability Index

(ESI) Excellence Europe

› Mar 2019: Infineon has been reconfirmed for inclusion in the Ethibel EXCELLENCE

Investment Register

› Sep 2019: Infineon is listed in

the DJS Index for the 10

consecutive year

› Mar 2020: Infineon received a rating of “AA” (on a scale of “AAA” – “CCC”) in the MSCI ESG Ratings

assessment

› Mar 2019: Sustainalytics

rated Infineon as an Outperformer in its ESG rating, with an overall score of 76

Our strategy is targeted at value creation through

sustainable organic growth

Target operating model: average-cycle targets

Revenue growth

Segment Result margin

17%+

Investment-to-sales

15%

System leader

in automotive

#1; system and

technology leader

Broad RF and sensor

technology portfolio

#2 in Security Solutions

Auto Power RF & Sensors Security

› Focus on fastest growing

segments of semi market

› Tackle global megatrends

› Leverage core competencies

in different end markets to

maximize ROI

› Create value for customers

through system under-

standing

Focus Technology leadership System understanding

› Organic RoCE ≙ ~2x WACC

› Paying at least an unchanged dividend

even in a year of slower or no growth

› continuous EPS

increase

Continued value creation for shareholders

Well diversified exposure to end-markets and

applications provide resilient growth model

FY19 revenue of €8,029m by target application

powertrain excl. xEV (12%)

xEV 7%

safety excl. ADAS (8%)

ADAS 3%

comfort, premium (12%)

other ATV (2%)

drives (6%)

renewables (3%)

home appliances (3%)

traction (2%)

other IPC (4%)

computing (8%)

consumer (2%)

smartphones,

wearables (5%)

communications (1%)

industrial (11%)

other PMM (3%)

smart card solutions (5%)

embedded security solutions (3%)

ATV 44%

IPC

18%

PMM

30%

DSS

Tight customer relationships, based on system know-

how and application understanding

ATV IPC

DSSPMM

Distribution partners

EMS partners

Infineon gained market share in all target markets

Source: Based on or includes content supplied by

Informa Tech (former IHS Markit Technology), "Power Semiconductor Market Share Database – 2018", September 2019

Source: ABI Research, “Secure Smart Card and

Embedded Security IC Technologies", September 2019

Source: Strategy Analytics, "2018 Automotive

Semiconductor Vendor Share", April 2019

Automotive

semiconductors

total market in 2018: $37.7bn

2.6%

2.8%

4.9%

5.4%

7.6%

8.2%

8.9%

11.2%

12.0%

Toshiba

ADI

Rohm

ON Semi

Bosch

STMicro

Renesas

Infineon

NXP

Security ICs

total market in 2018: $3.2bn

8.5%

10.1%

17.4%

24.3%

24.8%

CEC Huada

STMicro

Samsung

Infineon

NXP

Power discretes

and modules

total market in 2018: $21.0bn

2.5%

2.6%

3.3%

3.6%

4.5%

4.8%

5.4%

8.9%

19.9%

Semikron

Rohm

Renesas

Fuji

Toshiba

Vishay

Mitsubishi

STMicro

ON Semi

Infineon

(+1.2-pt)

(+0.4-pt)

(+0.1-pt)

Outlook for Q2 FY20 and FY20

Segment

Result Margin

Revenue

At the mid-point of the

revenue guidance:

~14%

Increase of 5%

+/- 2%-points

Investments in FY20 ~€1.3bn**

D&A in FY20 ~€1.0bn***

Outlook FY20*

* Based on an assumed average exchange rate of $1.13 for €1.00 ** Includes ~€400m for cleanroom, office buildings and structural changes *** Including D&A on tangible and intangible assets from purchase price allocation of about €60m

Increase of 5%

+/- 2%-points

At the mid-point of the

revenue guidance:

~16%

Outlook Q2 FY20*

(compared to Q1 FY20)

Agenda

Infineon at a glance

Planned acquisition of Cypress

Quarterly highlights

Automotive

Industrial Power Control

Power Management & Multimarket

Digital Security Solutions

Selected financial figures

The deal shapes a portfolio that perfectly links the

real and the digital world

Real-world

applications

Digital

world

Battery-powered devices

Consumer IoT

Power supplies

Drives

Industrial IoT

Connectivity

Software

Ecosystem

Automotive

Linking the real and the digital world

Infineon Cypress

Sense  sensors

Compute  microcontrollers,

memories

Actuate  power semiconductors

Connectivity  Wi-Fi, Bluetooth, BLE,

USB/USB-C/USB-PD

Infineon and Cypress can together offer full system

solutions

Outdoor Unit

Fan +

Compressor

PFC

Indoor Unit

User Interface

MCU

HMI

IPM

Gate

Driver IGBT /

MOSFET

MCU

Dual Motor + PFC

Connectivity

WIFI /

Bluetooth

Frontend

MCU

Connect

Security

(Trust)

Supply (ACDC)

UART

Touch / Button

LED / LCD

Audio Out

Infineon Cypress

Legend

Indoor Fan

Control

IPM

Main Control

Gate

Driver

MOSFET

MCU Main

Control

Sensor

RadarProximity

Heater

Motor Louver

Air Quality

UART

MCU

FAN

Example: air-conditioning

What makes system solution

attractive to customers?

› Ease of design

 combined portfolio covers all relevant system components

› Superior quality

 integrated solution ensures MCU, power stage and peripherals work perfectly together

› Faster time-to-market

 no addl. integration or software dev. costs

Infineon and Cypress portfolios complement each

other covering entire range of auto applications

Body

Cluster/

Infotainment

Chassis Powertrain ADAS

MCU

Sensors

compute power / application complexity

Low High

Application examples

Infineon Cypress

Legend

NOR Flash

Connectivity

Creating the #1

auto semi vendor

Complementary MCU

portfolio results in:

› broader customer access › cross-selling opportunities

Portfolio expansion through:

› connectivity (Wi-Fi,

Bluetooth, USB-PD)

› external NOR flash for

processors in cars

NOR Flash

Power

Sensors

Power

MCU (AURIX™)

› HVAC

› door control

› hybrid cluster › WiFi

› touch control

› USB-C

› braking › steering

› domain

› engine › transmission

› inverter

› radar

› sensor fusion

Full coverage of all application fields within automotive Benefits of combination

COGS

› Procurement for materials and manufacturing services

OpEx

› R&D: Optimize portfolio, reduce overhead › S&M: Efficiency gains in account coverage › G&A: Optimize corporate service providers

Planned ramp up of cost synergies Planned ramp up of revenue synergies

(A) Near-term revenue synergy ramp up

› Improved customer access and cross-selling › Optimize Cypress digital marketing potential to address

revenue opportunities and grow customer numbers

(B) P2S for long-term revenue synergy ramp up

› Sensor solutions › Security-hardened controllers and connectivity › Motor control solutions

FY22e FY25e FY28e

(A) (B)

€1bn

€1.5bn

FY20e FY21e FY22e

COGS

S&M R&D

G&A

ca. €180m

Expected cost synergies of ca. €180m p.a. by FY22

Revenue synergy potential > €1.5bn p.a. long-term

Further improvement of through-cycle

Target Operating Model

Current

(as announced

at CMD 2018)

Integrated

company*

Revenue

growth 9% 9%+

Segment

result margin 17%+ 19%

Investment

-to-sales 15% 13%

* Infineon financial performance to approach new targets as integration progresses

Financing: Major steps already accomplished

STEP 1

STEP 2

STEP 3

STEP 4

Underwriting of full acquisition amount by 3 banks

Confirmation of investment grade rating by Standard & Poor's

Equity de-risking: Raise of €1.5bn via ABB

Successful syndication of acquisition facility to 20 national and international banks

STEP 5

   



› Refinancing of remaining bridge and term loan through capital

markets

› Deleveraging: return to target level ≤ 2x gross debt / EBITDA in

2023

Successful launch of €1.2bn dual-tranche hybrid bond

Agenda

Infineon at a glance

Planned acquisition of Cypress

Quarterly highlights

Automotive

Industrial Power Control

Power Management & Multimarket

Digital Security Solutions

Selected financial figures

Major European tier-1 awards Infineon with triple-digit million Euro design-win for 48 V mild-hybrid platform

TOLT package

Electro-mobility: Infineon enforces footprint

top side cooling pad

top-side view

bottom-side view

x-ray view

› Through deep understanding of our customer system

requirements, we developed a new product combining

the latest 80 V MOSFET technology and the new TOLT

package featuring top-side cooling

› The top-side cooling concept significantly improves thermal

management by enabling the heatsink to be connected directly to the top of the component instead of having the thermal dissipation through the printed circuit board

› Application: starter generator for 48 V mild-hybrid vehicles

Defining the benchmark for MEMS microphones; Infineon’s

new sealed dual-membrane technology

› Unique sealed dual-membrane (SDM) XENSIV™ MEMS

microphone design boosts audio pick-up quality

› Sealing of the capacitive area enables practically noise-

free audio signal capturing

› Inhouse developed packages enable our customers to

create outstanding audio experiences:

› noise cancellation: in the smallest possible form factor › transparent hearing: clear understanding

› binaural recording: create a truly immersive experience

Up to 3 microphones per earbud (6 per set)

top view

XENSIV™ SDM MEMS microphone

bottom view

Sealed dualmembrane design

Sealing of capacitive area for

noise free audio signal capturing

Sweeping success of our XENSIV™ MEMS microphones driven by unparalleled audio characteristics

4.0%

4.7%

5.2%

37.0%

42.8%

MEMSensing

NJRC

Omron

Infineon

Knowles

Source: Informa Tech, "MEMS Microphone Database 2019", January 2020

Infineon’s market share development in MEMS microphones

2018 MEMS die market share

total market: 4.6bn units

Technological progression of Infineon XENSIV™ MEMS microphones

SNR = 58 – 64 dB(A)

Single-back plate

Dual-back plate

SNR = 63 – 69 dB(A)

Sealed dual-membrane

SNR = 68 – 75 dB(A)

3.5%

5.2%

8.8%

26.5%

34.7%

33.5%

37.0%

2006 2008 2010 2012 2014 2016 2018

While photovoltaic is partially in grid parity, there is a clear trend towards string inverter-based set-ups

› Approaching grid parity through reduced capex and opex spending

› Different inverter concepts allow for efficient and customized plant designs

Market developments

› multiple strings of solar panels are connected

together

› application: utility-scale PV plants › output: 600 kW – 1,250 kW › power semi content: €2,000 – €3,000 per MW

New set-up: string inverter

Traditional set-up: central inverter

› solar panels are connected together into strings

› application: commercial and utility-scale PV plants

› output: 1 kW – 200 kW › power semi content: €2,500 – €5,000 per MW

Easy 1B

Easy 2B

Easy 3B

TO247-3

TO247-4

Driver ICs

PrimePACK™ 3

PrimePACK™ 3+

EconoDUAL™ 3

62 mm

central inverter

string inverter

Infineon provides innovative SiC products to SMA, the European

market leader of PV inverters

Customer-specific SiC-based solution

› Almost doubles the power density to 1.76 kW/kg › Efficiency of > 99% › Leads to reduced system complexity of the PV

inverter resulting in easier maintenance and

extended product lifetime

Gate drivers of the EiceDRIVER™ family

CoolSiC™ EasyPACK™ 2B

Sunny Highpower PEAK3

36x

SMA Sunny Highpower PEAK3

› 150 kW output power per unit

› Designed for decentralized photovoltaic power plants

› Compact inverter design: Easy transportation and installation

Infineon’s SiC business so far dominated by

industrial; design-in momentum clearly on automotive

Cumulated SiC design-ins of ~€1.8bn*

Strong growth in SiC business; very balanced product and customer portfolio

FY17 FY18 FY19 FY20e

automotive

industrial

* as per end of FY19; as a cautious assumption, lifetime of all projects is capped after five years.

** only customers with > €10k revenue considered

CAGR

(FY17-FY20)

: ~50%

› > 125 different CoolSiC™ products in FY19 › ~ 90 different customers** in FY19

› ~ triple-digit €m revenue expected for FY20

› automotive: diodes, MOSFETs, MOSFET modules › industrial (IPC): diodes, MOSFETs, hybrid modules,

MOSFET modules

› industrial (PMM): diodes, MOSFETs

60% – 80%

[EUR m]

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