Infineon and TSMC Extend Technology and Production Partnership Agreement

Infineon and TSMC Extend Technology and Production Partnership Agreement; Will Jointly Develop 65nm Embedded Flash Process Technology For Automotive and Chip Card Applications.

Neubiberg, Germany and Hsinchu, Taiwan, R.O.C. – November 5, 2009 – Infineon Technologies AG (FSE: IFX / OTCQX: IFNNY) and Taiwan Semiconductor Manufacturing Company (TWSE: 2330, NYSE: TSM) today announced that they are extending their development and production partnership to a 65nanometer (nm) embedded flash (eFlash) process technology targeting next generation automotive, chip card and security applications. Based on the agreement, Infineon and TSMC will jointly develop 65nm process technologies for eFlash microcontrollers (MCUs) that fulfill the stringent quality requirements of the automotive industry, as well as the demanding security requirements of the chip card and security markets.

The partnership extension with TSMC is in line with Infineon’s strategy to outsource manufacturing and to engage in technology co-development for 65nm and smaller geometry processes. The 65nm eFlash technology for automotive applications supports the high degree of functional integration required that drive the performance and features called for in upcoming safety and emission standards. The 65nm eFlash technology for chip card and security applications will support Infineon’s innovation focus on tailored security that offers the appropriate level of security at the best cost-performance ratio, for applications in the smart card form factor and beyond.

Process and product qualification for security MCUs is scheduled for the second half of 2012. Automotive MCU qualification and production start is scheduled for the first half of 2013. Infineon’ s 32-bit TriCore™ family MCUs will be the first automotive products produced on the 65nm eFlash process. Ultimately, TSMC will manufacture Infineon’s broad range of security microcontrollers that feature contact-based, contact-less or dual interface.

“We are pleased to extend our collaboration with TSMC as a stable and reliable partner into new applications,” explained Jochen Hanebeck, President of the Automotive Division at Infineon Technologies. “We are confident that TSMC with its strong manufacturing excellence background will be able to fulfill the stringent automotive market requirements with their particular focus on quality.”

Dr. Helmut Gassel, President of Infineon’s Chip Card & Security Division, added: “For smart card and security applications, Infineon has safeguarded a long-term production partner. We trust in TSMC to master the demanding obligations of Infineon as an innovative and reliable source providing long-term and stable supply of security microcontrollers. Indicating our firm and ongoing commitment to highest security standards, it is understood that TSMC will be audited under the most stringent international security specifications as being provided by Infineon.”

“Infineon is an acknowledged leader in a number of technology and application segments. They have a world-class reputation in embedded flash development and have earned the respect of the automotive and chip card industry for their product quality and innovation. TSMC is committed to providing the manufacturing quality required by our automotive customers. We will provide that same level of excellence and the security required for their smart card applications,” said C.C. Wei, Senior Vice President, Business Development, TSMC.

Infineon and TSMC have compiled more than a decade-long partnership covering several Infineon’ s applications, such as industrial and wireline. Based on a manufacturing agreement to use TSMC 65nm low-power technology for Infineon’s products employed in mobile devices, which started about two years ago, the move to automotive and chip card applications signals a firm and ongoing commitment on the part of both companies to a strong development alliance and a stable and long-term production partnership.

Infineon is one of two market leaders that both hold a 9.5% share of the worldwide automotive electronics market in 2008, worth about US$18.3 billion. Infineon is the number one chip card semiconductor vendor, with 25.5 percent of the worldwide market valued at US$2.4 billion in 2008.

TSMC is the only dedicated foundry to offer 0.25-micron and 0.18-micron embedded flash IP that meet AEC-Q100 specification.