February 3, 2005
CSFB Smart Card and RFID Conference
Axel DeiningerSenior Director, Product MarketingBusiness Unit Chip Card & Security ICsBusiness Group Automotive, Industrial & Multi-Markets
Please note that while you are reviewing this information, this presentation was created as of the date listed, and reflected management views as of that date.
This presentation contains certain forward-looking statements that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to the Risk Factors noted in the Company's Earnings Releases and the Company's filings with the Securities and Exchange Commission.
Disclaimer
Chip Card ICs: Market Development
Source: Frost & Sullivan 2004
Chip Card IC marketrevenue developmentChip Card IC marketrevenue development
CY03 CY04 CY05 CY06 CY07
3.0
2.0
1.0
0
[USD bn]
CAGR14 %
! Mobile Communication- High-end SIM ICs
- Subscriber growth
! Government ID projects- Passports
- National ID
- Healthcare cards
! Contactless technology- Secure travel documents
- Payment and Transport
! Banking- EMV migration push
! Mobile Communication- High-end SIM ICs
- Subscriber growth
! Government ID projects- Passports
- National ID
- Healthcare cards
! Contactless technology- Secure travel documents
- Payment and Transport
! Banking- EMV migration push
Key market driversKey market drivers
Benefit from a Growing Contactless Market through a Complete Product Offering
Transport SIN: EZLink
Transport SIN: EZLink
ePassportGER / NL / UK /
Denmark
ePassportGER / NL / UK /
Denmark
MifareMifare
CalypsoB-Type
Transport
CalypsoB-Type
TransportFelica: C�less
Banking
Felica: C�less
Banking
ePassportUSA/ CDAePassportUSA/ CDA
NYC PortAuthoritiesNYC Port
Authorities
MastercardPaypass
MastercardPaypass
JapanDriver License
JapanDriver License
Contactless project overviewContactless project overviewContactless marketContactless market
121
516
CY03 CY08
CAGR34%
[units mio.]
Source: Gartner Dataquest, May 2004
Complete Product Offering:! Contactless Crypto Controller
with 32/64KB E²PROM for Passports! Contactless Security Controller
with 8KB E²PROM for Transport and Finance
! Infineon Mifare and my-d contactlessmemory IC�s for Transport and Industry ID
Complete Product Offering:! Contactless Crypto Controller
with 32/64KB E²PROM for Passports! Contactless Security Controller
with 8KB E²PROM for Transport and Finance
! Infineon Mifare and my-d contactlessmemory IC�s for Transport and Industry ID
Infineon is well Positioned to Serve the Key Growth Markets
CommunicationsPrepaidMobile
EntertainmentPay TV, GamingVideo/Audio
PaymentCredit/Debit, e-purse
Transport, Ticketing
IdentificationePassport, Nat. IDSocial, AccessRFID, e-Government
Contact-basedchip cards
Contact-basedchip cards
Contactlesschip cards, RFID
Contactlesschip cards, RFID Security ICsSecurity ICs
Infineon40%
985
1,176
Market Shares: Infineon Achieved a Positive Development
1257,6
Market shares (USD)Source: Gartner Dataquest
0
200
400
600
800
1000
1200
1400
2000 2001 2002 2003
others
Samsung
Atmel
Philips
Renesas
STM
Infineon
34% 41%38%
30% 14%23%
16%12%13%
10%13%17%12%7%7%6%
1,228
40%
15%
14%
14%10%4%
Successful in the Chip Card Market for more than 15 Years
Security memories Security controllers Others
88/89 89/90 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04
CAGR = 49%
first launch"Geldkarte"first launch"Geldkarte"
second launch"Geldkarte"
second launch"Geldkarte"
ramp-upGSM
ramp-upGSM
first launchphonecard
first launchphonecard
first launchhealth insurance card
first launchhealth insurance card
213%
123%
61%
32%
56%
37%
25%
GSM market �drop�
GSM market �drop�
Chip Card & Security ICs: Strategy Overview
! Communications
! Identification
! Payment
! Entertainment
! Communications
! Identification
! Payment
! Entertainment
! Security expertise
! High volume productionin NVM technologies
! Module Assembly
! Focused System Know-How
! Engineering Excellence
! Strategic partnerships
! Security expertise
! High volume productionin NVM technologies
! Module Assembly
! Focused System Know-How
! Engineering Excellence
! Strategic partnerships
! Chip Card ICs
! Contactless Systems
! Security ICs
! Chip Card ICs
! Contactless Systems
! Security ICs
FOCUS on sustainable andgrowing market segments
FOCUS on sustainable andgrowing market segments
LEVERAGE and enforcecore competencies
LEVERAGE and enforcecore competencies
SHAPE the market with leading products
SHAPE the market with leading products
Product Portfolio SecurityControllers for Enhanced Security, C'less for Convenience
Low-end µC Mid-range µC High-end µCLow-end µC Mid-range µC High-end µC
Microcontrollers (µCs) for Chip Cards
C'less µC (incl. dual-interface)Identification, Transport, FinanceC'less µC (incl. dual-interface)Identification, Transport, Finance
CounterTelecom
Data CarrierIdentification
CounterTelecom
Data CarrierIdentification
Contactless memories & RFIDsContactless memories & RFIDs
MemoriesTrusted Platform
Modules (µC)
PC´s, Notebooks
Trusted PlatformModules (µC)
PC´s, Notebooks
TPM
Modules & Standard Packages
ID, Finance MobCom, ID, Finance, Pay-TV
MobCom, Multi-Appl.
Object ID,TransportISO 15693
IdentificationISO 14443
ISO14443 (13.56MHz) - est. standards A, B, C/Felica
Significant Manufacturing Cost Reductions in Chip Card ICs
Microslim technologyMicroslim technology 130nm shrink130nm shrink
! Volume roll-out of microslimtechnology (66PE family) since mid 2004
- Move from 2 transistor/bit to1 transistor/bit cell design
- Significant reduction of chip area
- Higher performance (30 MHz) and increased memory sizes
! Volume roll-out of microslimtechnology (66PE family) since mid 2004
- Move from 2 transistor/bit to1 transistor/bit cell design
- Significant reduction of chip area
- Higher performance (30 MHz) and increased memory sizes
! Volume roll-out of first chip card products on 130nm technologyin mid 2004
- First 32bit controller with flash memory dramatically improves flexibility and manufacturing timefor customer
- 32bit architecture enables applications with higher memory-and security-requirements
- Low power consumption (1.8V) and increased performance (66MHz)
! Volume roll-out of first chip card products on 130nm technologyin mid 2004
- First 32bit controller with flash memory dramatically improves flexibility and manufacturing timefor customer
- 32bit architecture enables applications with higher memory-and security-requirements
- Low power consumption (1.8V) and increased performance (66MHz)
Introduction of FCOS modulesIntroduction of FCOS modules
! Ramp-up of �Flip-Chip on Substrate� packaging technology since 01/2005
! Ramp-up of �Flip-Chip on Substrate� packaging technology since 01/2005
Frontend Backend
Dresden
Altis
UMC
WuxiRegensburg
Hejian
Customer
FAB Cluster Concept for MicrocontrollersCertificated Manufacturing Concept within Infineon
0.22µ
0.13µ / 0.22µ / 0.25µ
0.22µ
0.22µ
Infineon is a Proven Technology Leader in the Chip Card Segment
First 0.25 µm technology on
the market
First 0.25 µm technology on
the market
2000 ...2002 2004
First 0.22 µm technology on
the market
First 0.22 µm technology on
the market
2005
First 0.13 µm technology on
the market
First 0.13 µm technology on
the market
First Face-to-Face*technology
on the market
First Face-to-Face*technology
on the market
Leader in CMOS technology platformsLeader in CMOS technology platforms
Prepared for new technology trends in the futurePrepared for new technology trends in the future
" New NVM technologies are under development with partners: NROM, FeRAM, MRAM
*3D chip stacking technology
First CL module on the market to meetICAO requirements
First CL module on the market to meetICAO requirements First FCOS module
technology on the market
First FCOS moduletechnology on
the market
2004
ICIC + Module < 50%
2009IC
IC + Module>> 50%
ongoing trend towards
IC shipments with
Module
Watermark / LOGO
Face-to-FaceFCOS
c'less MOLD
c'less FlipChip
Infineon backend! Technology leadership! Security leadership ! Manufacturing performance! Contactless know-how
Infineon backend! Technology leadership! Security leadership ! Manufacturing performance! Contactless know-how
ModulesBring Infineon's Outstanding Module Technology to the Market
Chip Card Certification at InfineonProof for Infineon Leading Position with Security Controller
! Proactive security evaluations at the highest levels worldwide
! Recent certification high-lights: � 66P ZKA/Seccos (German e-purse) approval
� 66P 6 x ITSEC E4 / high certificates
� 66P Approval for German signature card
� 66S/P 18 x Visa Type 3 approval
� 66P CAST approval for the whole family
� 66P Mondex Type approval
� 66P Proton World approval
� 66P Common Criteria EAL5+ SSVG Protection Profile BSI-PP0002
� 66M ITSEC E3 / high for French application
� 88P Common Criteria EAL5+ SSVG Protection Profile BSI-PP0002
source: Nokia, 2003
High-Density SIM - Market EnvironmentHD SIMs enable Operators to Increase their ARPU
! Operators need a high-density SIM to push this market and to avoid dependency on handset giants
! Up to 10% of all SIM cards will be shipped with memory >1MB (>100m pcs)
! Price for end user 10� and less
! Operators need a high-density SIM to push this market and to avoid dependency on handset giants
! Up to 10% of all SIM cards will be shipped with memory >1MB (>100m pcs)
! Price for end user 10� and less
! Operators� ARPU will grow only through a significant increase of data traffic
! Operators� ARPU will grow only through a significant increase of data traffic
Mobile ARPU (*) 2001-2007
4MB
PersonalService
Enhance address book with audio and video information
Infotainmentservices
Streamed en-/decryption
R-Call
Group mgmt for SMS
Prepaid card mgmt
Web access,logins
Personal media storage (also DRM)
(*) ARPU = Average Revenue Per User
source: Nokia, 2003
16MB
High-Density SIM � IFX PositionBest-in-class Technology from the Market Leader
High-end 32bit platform
(available)
High-end 32bit platform
(available)
Face-to-Face Technology(available)
Face-to-Face Technology(available)
High-density NROM Technology
(available)
High-density NROM Technology
(available)
Philips10%Renesas
19%
Atmel13%
Samsung13%
Others10%
STM4%
IFX31%
SIM IC shipments 2003
source: Frost & Sullivan 2004
Leading SIM supplier All leading card vendors trust in IFX products
All leading card vendors trust in IFX products
Never stop thinking.
