SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

July 26, 2005

INFINEON TECHNOLOGIES AG

St.-Martin-Strasse 53
D-81541 Munich
Federal Republic of Germany
Tel: +49-89-234-0
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___.

 

 

This Report on Form 6-K contains a press release of Infineon Technologies AG dated July 26, 2005, announcing the Company’s results for the third quarter of financial year 2005.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		INFINEON TECHNOLOGIES AG
Date: July 26, 2005		By:		/s/ Wolfgang Ziebart
				Dr. Wolfgang Ziebart
				Chairman, President and Chief Executive Officer
		By:		/s/ Peter J. Fischl
				Peter J. Fischl
				Chief Financial Officer

 
 
 
 
 

Infineon Reports Results for Third Quarter of Financial Year 2005

•

Revenues of Euro 1.61 billion in the third quarter were stable compared to the second quarter, reflecting increased revenues of the Memory Products segment, offset by reduced revenues in the Communication and the Automotive, Industrial and Multimarket segments.

•

Third quarter EBIT loss included charges of Euro 81 million, primarily in connection with the planned phase-out of production at the company’s Munich-Perlach facility and impairment charges in the Communication segment; third quarter EBIT loss increased to Euro 234 million from Euro 117 million in the prior quarter. Second quarter EBIT was negatively impacted by a net aggregate charge of Euro 74 million resulting primarily from reorganization measures in the Communication segment.

•

Net loss in the third quarter was Euro 240 million compared to a net loss of Euro 114 million in the prior quarter.

•

Total revenues for the first nine months of financial year 2005 were Euro 5.03 billion, down 3 percent from Euro 5.20 billion in the same period last year. EBIT loss in the first nine months of financial year 2005 was Euro 140 million, compared with positive Euro 143 million in the same period last year. Net loss for the first nine months amounted to Euro 212 million, compared to net income of Euro 17 million in the same period last year.

		3 months ended				3 months ended				+ /- in %				3 months ended				+/- in %
In Euro million		Jun 30, 2005				Mar 31, 2005				sequential				Jun 30, 2004				year-on-year
Revenues			1,606				1,606				+0	%			1,908				-16	%
EBIT			(234	)			(117	)			-100	%			2				—
Net loss			(240	)			(114	)			—				(56	)			—
Loss per share
(in Euro)			(0.32	)			(0.15	)			—				(0.08	)			—

Munich, Germany – July 26, 2005 – For the third quarter of financial year 2005, Infineon Technologies AG (FSE/NYSE:IFX) reported a stable overall development of revenues. Revenues of the Memory Products segment increased in the third quarter, primarily as

a result of an approximate 45 percent bit-shipment growth, which more than offset a price-per-bit decline of approximately 30 percent compared to the previous quarter. In the Communication segment, revenues in the wireline business were stable in the third quarter, whereas demand for baseband components continued to decline. In the Automotive, Industrial and Multimarket segment, slight improvements in revenues of the automotive and industrial businesses could not fully offset further deterioration in the security and chip-card business.

As expected, sequential EBIT loss increased significantly. The EBIT loss increase was mainly driven by significantly lower price levels in the Memory Products segment compared to the previous quarter, as well as continuous pricing pressure primarily in the security and chip-card businesses. In addition, EBIT was negatively impacted by charges of Euro 81 million, primarily in connection with the planned phase-out of production at the company’s Munich-Perlach facility and impairment charges in the Communication segment. Second quarter EBIT was negatively impacted by a net aggregate charge of Euro 74 million resulting primarily from reorganization measures in the Communication segment.

“We have made good progress in our corporate restructuring. However, in the third quarter we have seen adverse effects on memory products and security and chip-card ICs as well as at some of our baseband customers,” said Dr. Wolfgang Ziebart, CEO and President of Infineon Technologies AG. “In spite of this, we expect an improved fourth quarter compared to the third quarter.”

Business groups’ 2005 third quarter performance and outlook

Infineon began to report its financial position and results of operations in accordance with its new organizational structure during the second quarter of financial year 2005. The former Mobile and Wireline Communication segments were combined into the new Communication segment to align the company’s structure with market developments. At the same time, the company’s security and chip-card activities and the ASIC & Design Solutions business were integrated into the extended Automotive, Industrial and Multimarket segment. The results of periods prior to the second quarter of financial year 2005 have been reclassified to conform to the new presentation.

Automotive, Industrial and Multimarket

		3 months ended				3 months ended				+ /- in %				3 months ended				+/- in %
In Euro million		Jun 30, 2005				Mar 31, 2005				sequential				Jun 30, 2004				year-on-year
Revenues			625				634				-1	%			669				-7	%
EBIT			23				36				-36	%			74				-69	%

In the third quarter of financial year 2005, revenues in the Automotive, Industrial and Multimarket segment decreased slightly compared to the previous quarter. This was mainly due to higher than expected pricing pressure in the security and chip-card business, primarily caused by a rapid decline of market demand during the third quarter. Despite strong pricing pressure in the industrial business, revenues in the company’s automotive and industrial businesses increased slightly. EBIT in the Automotive, Industrial and Multimarket segment sequentially decreased. This was mainly due to very strong pricing pressure in the security and chip-card business, which was not fully offset by productivity measures. In addition, EBIT was negatively impacted by costs related to product transfer in connection with the planned phase-out of production at Munich-Perlach and the investment in the new production site in Kulim, Malaysia.

Automotive, Industrial and Multimarket’s outlook for the fourth quarter of financial year 2005

Communication’s outlook for the fourth quarter of financial year 2005

Other Operating Segments

		3 months ended				3 months ended				+ /- in %				3 months ended				+/- in %
In Euro million		Jun 30, 2005				Mar 31, 2005				sequential				Jun 30, 2004				year-on-year
Revenues			3				4				-25	%			1				+ + +
EBIT			(1	)			11				—				(9	)			+ + +

EBIT results during the previous quarter were positively impacted by a gain of Euro 13 million realized on the sale of Infineon’s venture capital activities, which did not recur in the current quarter.

Corporate and Reconciliation

		3 months ended				3 months ended				+ /- in %				3 months ended				+/- in %
In Euro million		Jun 30, 2005				Mar 31, 2005				sequential				Jun 30, 2004				year-on-year
Revenues			5				3				+67	%			8				-38	%
EBIT			(43	)			(39	)			-10	%			(15	)			—

The sequential EBIT loss increased in the third quarter of financial year 2005 compared to the previous quarter, mainly due to charges of Euro 35 million, resulting primarily from the restructuring activities in connection with the planned phase-out of production at the Munich-Perlach facility.

For major business highlights of Infineon’s segments in the third quarter of financial year 2005, click http://www.infineon.com/news/.

FINANCIAL INFORMATION
According to US GAAP — Unaudited

Condensed Consolidated Statements of Operations

		3 months ended												9 months ended
in Euro million		Jun 30, 04				Mar 31, 05				Jun 30, 05				Jun 30, 04				Jun 30, 05
Net sales			1,908				1,606				1,606				5,202				5,028
Cost of goods sold			(1,213	)			(1,174	)			(1,347	)			(3,432	)			(3,636	)
Gross profit			695				432				259				1,770				1,392
Research and development expenses			(308	)			(354	)			(320	)			(888	)			(1,003	)
Selling, general and administrative expenses			(194	)			(164	)			(157	)			(544	)			(483	)
Restructuring charges			(5	)			(23	)			(30	)			(15	)			(55	)
Other operating expense, net			(183	)			(41	)			(24	)			(182	)			(59	)
Operating income (loss)			5				(150	)			(272	)			141				(208	)
Interest (expense) income, net			(24	)			—				9				(55	)			14
Equity in earnings of associated companies			—				25				18				4				44
Gain on associated company share issuance			—				—				—				1				—
Other (expense) income, net			(6	)			9				22				(10	)			21
Minority interests			3				(1	)			(2	)			7				3
Income (loss) before income taxes			(22	)			(117	)			(225	)			88				(126	)
Income tax (expense) benefit			(34	)			3				(15	)			(71	)			(86	)
Net income (loss)			(56	)			(114	)			(240	)			17				(212	)
Earnings (loss) per share (EPS) Shares in million
Weighted average shares outstanding — basic			748				748				748				730				748
Weighted average shares outstanding — diluted			748				748				748				741				748
Earnings (loss) per share — basic and diluted (in Euro)			(0.08	)			(0.15	)			(0.32	)			0.02				(0.28	)

EBIT

Infineon defines EBIT as earnings (loss) before interest and taxes. Infineon management uses EBIT among other measures to establish budgets and operational goals, to manage the Company’s business and to evaluate its performance. Infineon reports EBIT information because it believes that it provides investors with meaningful information about the operating performance of the company and especially about the performance of its separate business segments.

Segment Results

		3 months ended												9 months ended
Net sales in Euro million		Jun 30, 04*				Jun 30, 05				+/– in %				Jun 30, 04*				Jun 30, 05				+/– in %
Automotive, Industrial and Multimarket			669				625				(7	)			1,832				1,890				3
Communication			419				314				(25	)			1,223				1,060				(13	)
Memory Products			811				659				(19	)			2,119				2,058				(3	)
Other			1				3				+++				8				10				25
Corporate and Reconciliation			8				5				(38	)			20				10				(50	)
Infineon consolidated			1,908				1,606				(16	)			5,202				5,028				(3	)

		3 months ended												9 months ended
EBIT in Euro million		Jun 30, 04*				Jun 30, 05				+/– in %				Jun 30, 04*				Jun 30, 05				+/– in %
Automotive, Industrial and Multimarket			74				23				(69	)			162				107				(34	)
Communication			2				(88	)			—				29				(249	)			—
Memory Products			(50	)			(125	)			—				20				88				+++
Other			(9	)			(1	)			+++				(40	)			8				+++
Corporate and Reconciliation			(15	)			(43	)			—				(28	)			(94	)			—
Infineon consolidated**			2				(234	)			—				143				(140	)			—

*		Prior period segment results are reclassified to be consistent with the current period presentation and organizational structure.
**		Includes acquisition related expenses (amortization of acquired intangible assets and deferred compensation) of Euro 17 million and Euro 7 million for the three months ended June 30, 2004 and 2005 (primarily Communication), respectively, as well as Euro 33 million and Euro 23 million for the nine months ended June 30, 2004 and 2005 (primarily Communication).

		3 months ended
Net sales in Euro million		Mar 31, 05				Jun 30, 05				+/– in %
Automotive, Industrial and Multimarket			634				625				(1	)
Communication			332				314				(5	)
Memory Products			633				659				4
Other			4				3				(25	)
Corporate and Reconciliation			3				5				67
Infineon consolidated			1,606				1,606				—

		3 months ended
EBIT in Euro million		Mar 31, 05				Jun 30, 05				+/– in %
Automotive, Industrial and Multimarket			36				23				(36	)
Communication			(142	)			(88	)			38
Memory Products			17				(125	)			—
Other			11				(1	)			—
Corporate and Reconciliation			(39	)			(43	)			(10	)
Infineon consolidated*			(117	)			(234	)			(100	)

*		Includes acquisition related expenses of Euro 8 million and Euro 7 million for the second and third quarters of the 2005 financial year (primarily Communication), respectively.

Regional Sales Development

		3 months ended
Regional sales in %		Jun 30, 04				Mar 31, 05				Jun 30, 05
Germany			22	%			21	%			20	%
Other Europe			18	%			19	%			19	%
North America			22	%			23	%			24	%
Asia / Pacific			32	%			30	%			31	%
Japan			5	%			5	%			4	%
Other			1	%			2	%			2	%
Total			100	%			100	%			100	%
Europe			40	%			40	%			39	%
Outside-Europe			60	%			60	%			61	%

Condensed Consolidated Balance Sheets

in Euro million		Sep 30, 04				Jun 30, 05
Assets
Current assets:
Cash and cash equivalents			608				918
Marketable securities			1,938				1,466
Trade accounts receivable, net			1,056				870
Inventories			960				960
Deferred income taxes			140				136
Other current assets			590				565
Total current assets			5,292				4,915
Property, plant and equipment, net			3,587				3,855
Long-term investments, net			708				745
Restricted cash			109				89
Deferred income taxes			541				525
Other assets			627				566
Total assets			10,864				10,695

in Euro million		Sep 30, 04				Jun 30, 05
Liabilities and shareholders’ equity
Current liabilities:
Short-term debt and current maturities of long-term debt			571				548
Trade accounts payable			1,098				1,023
Accrued liabilities			555				477
Deferred income taxes			16				38
Other current liabilities			630				655
Total current liabilities			2,870				2,741
Long-term debt			1,427				1,524
Deferred income taxes			21				25
Other liabilities			568				634
Total liabilities			4,886				4,924
Total shareholders’ equity			5,978				5,771
Total liabilities and shareholders’ equity			10,864				10,695

Condensed Consolidated Statements of Cash Flows

		3 months ended												9 months ended
in Euro million		Jun 30, 04				Mar 31, 05				Jun 30, 05				Jun 30, 04				Jun 30, 05
Net cash provided by operating activities			506				164				202				1,289				789
Net cash (used in) provided by investing activities			(34	)			18				(494	)			(909	)			(586	)
Net cash provided by (used in) financing activities			(334	)			(19	)			90				(255	)			107
Net increase (decrease) in cash and cash equivalents			138				163				(202	)			125				310
Depreciation and amortization			329				317				326				986				977
Purchases of property, plant and equipment			(271	)			(385	)			(294	)			(740	)			(1,135	)

Gross and Net Cash Position

Infineon defines gross cash position as cash and cash equivalents and marketable securities, and net cash position as gross cash position less short and long-term debt. Since restricted cash no longer includes amounts for the repayment of debt, the gross and net cash positions exclude restricted cash. Since Infineon holds a substantial portion of its available monetary resources in the form of readily marketable securities, which for US GAAP purposes are not considered to be “cash”, it reports its gross and net cash positions to provide investors with an understanding of the company’s overall liquidity.

The gross and net cash position is determined as follows from the balance sheets, without adjustment to the US GAAP amounts presented:

in Euro million		Jun 30, 04				Mar 31, 05				Jun 30, 05
Cash and cash equivalents			1,094				1,120				918
Marketable securities			1,536				1,229				1,466
Gross Cash Position			2,630				2,349				2,384
Less: short-term debt			174				548				548
long-term debt			2,060				1,469				1,524
Net Cash Position			396				332				312

Free Cash Flow

Infineon defines free cash flow as cash from operating and investing activities excluding purchases or sales of marketable securities. Since Infineon holds a substantial portion of its available monetary resources in the form of readily marketable securities, and operates in a capital intensive industry, it reports free cash flow to provide investors with a measure that can be used to evaluate changes in liquidity after taking capital expenditures into account.

The free cash flow is determined as follows from the cash flow statements, without adjustment to the US GAAP amounts presented:

		3 months ended												9 months ended
in Euro million		Jun 30, 04				Mar 31, 05				Jun 30, 05				Jun 30, 04				Jun 30, 05
Net cash provided by operating activities			506				164				202				1,289				789
Net cash (used in) provided by investing activities			(34	)			18				(494	)			(909	)			(586	)
Thereof: Purchase (sale) of marketable securities, net			(326	)			(379	)			280				(244	)			(469	)
Free cash flow			146				(197	)			(12	)			136				(266	)

Employee Data		Jun 30, 05
Infineon worldwide			36,151
Thereof: Research and Development			7,254

Analyst and press telephone conferences

Infineon Technologies AG will host a telephone conference (in English only) with analysts and investors on July 26, 2005, 10:00 a.m. Central European Summer Time (CEST), 4:00 a.m. Eastern Daylight Time (U.S. EDT), to discuss operating performance during the third quarter of financial year 2005. In addition, the Infineon Management Board will conduct a telephone conference with the media at 11:30 a.m. (CEST), 5:30 a.m. (U.S. EDT). It can be followed in German and English over the Internet. Both conference calls will be available live and for download on Infineon‘s web site at http://www.infineon.com.

D I S C L A I M E R

This discussion includes forward-looking statements about our future business. These forward-looking statements include statements relating to future developments of the world semiconductor market, especially the market for memory products, Infineon’s future growth, the benefits of research and development alliances and activities, our planned levels of future investment in the expansion and modernization of our production capacity, the introduction of new technology at our facilities, the transitioning of our production processes to smaller structure sizes, cost savings related to such transitioning and other initiatives, our successful development of technology based on industry standards, our ability to offer commercially viable products based on our technology, and our ability to achieve our cost savings and growth targets. These forward-looking statements are subject to a number of uncertainties, including trends in demand and prices for semiconductors generally and for our products in particular, the success of our development efforts, both alone and with our partners, the success of our efforts to introduce new production processes at our facilities and the actions of our competitors, the availability of funds for planned expansion efforts, the outcome of antitrust investigations and litigation matters, as well as the other factors mentioned herein. As a result, our actual results could differ materially from those contained in the forward-looking statements.

Infineon, the stylized Infineon Technologies design are trademarks and service marks of Infineon Technologies AG. All other trademarks are the property of their respective owners.

For the Finance and Business Press: INFXX200507.070e

Media Relations Corporate:		Name:		Phone / Fax:		Email:
Worldwide Headquarters		Barbara Reif		+49 89 234 20166 / 28482		barbara.reif@infineon.com
U.S.A.		Christoph Liedtke		+1 408 501 6790 / 2424		christoph.liedtke@infineon.com
Asia		Kaye Lim		+65 6876 3070 / 3074		kaye.lim@infineon.com
Japan		Hirotaka Shiroguchi		+81 3 5449 6795 / 6401		hirotaka.shiroguchi@infineon.com
Investor Relations		EU/APAC +49 89 234 26655		USA/CAN +1 408 501 6800		investor.relations@infineon.com