Infineon to Cooperate with Taiwanese Winbond and Mosel Vitelic to Secure Higher Memory Chip Production Capacity

Infineon Technologies AG (FSE/NYSE: IFX) today announced that it has successfully concluded its talks with the Taiwanese semiconductor manufacturers Winbond Electronics Corp. and Mosel Vitelic Inc., both Hsinchu. Further strengthening its position in the memory market, Infineon has signed a non-binding Memorandum of Understanding (MoU) with Winbond and agreements with Mosel Vitelic. With these steps Infineon will increase its total production capacity for DRAM chips by more than 20,000 wafer starts per month.

Under the terms of the MoU with Winbond, Infineon will license its advanced DRAM trench technology to Winbond and, beginning in 2003, gain exclusive access to standard DRAM chips manufactured using this technology. Under the terms of the agreement with Mosel Vitelic, Infineon is increasing its share in the output of their joint venture ProMOS Technologies Inc. from 38 to 48 percent, effective as of March 1, 2002.

“Executing on our strategy to further strengthen our ties with Taiwanese partners, Infineon considers these cooperations as a major step to prepare for the upcoming market recovery”, commented Dr. Ulrich Schumacher, President and CEO of Infineon Technologies. “Shifting production capacity to Infineon along with building on our leading technology and cost position will pave the way for further augmenting our worldwide market position in the consolidating DRAM industry.”

The technology transfer from Infineon will enable Winbond to manufacture standard DRAM products exclusively for sale to Infineon and to develop and sell proprietary products using Infineon’s DRAM technology. Furthermore, Infineon will receive license fees and royalties for any proprietary products designed and sold by Winbond using the relevant DRAM technology. Winbond will upgrade its DRAM facilities in Hsinchu to Infineon’s 0.11-micron technology which will lead to a cost advantage per chip. Subject to market conditions, Infineon expects that production at Winbond will begin with 256-Mbit DDR memory chips, with a potential future migration to 512-Mbit components.

In 1996 Infineon (formerly Siemens Semiconductors) and Mosel Vitelic formed their ProMOS joint venture for DRAM production in Hsinchu, Taiwan. Since then, Infineon also entered into several technology transfer agreements with ProMOS including 300mm technology and various generations of manufacturing process technology. ProMOS is publicly traded at the TAISDAQ stock exchange since May 1999.

Following Infineon’s 300mm manufacturing ramp up in Dresden, ProMOS is preparing to introduce 300mm technology as well. ProMOS is now qualified for production with the leading edge 0.14-micron-based technology licensed from Infineon last fall. The manufacturer’s main products include 128-Mbit and 256-Mbit DRAM chips in synchronous (SDRAM) and double data rate (DDR) configurations, primarily for use in servers and other computer applications.