Annual Report 2023

Infineon Technologies AG

www.infineon.com
 1

Contents
2 Infineon key data 19 Combined Management Report 88 Consolidated Financial Statements
20 Business model 89 Consolidated Statement of Navigation in the report per mouse click
3 Infineon at a glance
27 Group strategy Profit or Loss Last page viewed
4 Management Board and 34 Research and development 90 Consolidated Statement of Search
Supervisory Board 37 Internal management system Comprehensive Income Main table of contents
4 Letter to shareholders 40 Review of the semiconductor 91 Consolidated Statement of Previous page
10 The Management Board industry Financial Position Next page
12 Report of the Supervisory Board 42 2023 fiscal year 92 Consolidated Statement of Cash Flows
to the Annual General Meeting 58 Infineon on the capital market 93 Consolidated Statement of Further information
61 Overall statement on Infineon’s Changes in Equity Page reference
financial condition 95 Notes to the Consolidated Chart reference
62 Report on outlook, risk and Financial Statements (Chart overview on p. 184)
opportunity Reference
79 Infineon Technologies AG 172 Further information (List of references on p. 87)
82 Corporate Governance 172 Responsibility Statement by Reference to external documents
87 List of references the Management Board
173 Independent Auditor’s Report This interactive pdf is optimized for use
180 Applications and product range with Adobe Acrobat.
184 Chart overview
184 List of abbreviations
185 Financial calendar 2024
Infineon | Annual Report 2023 186 Imprint
Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 2

Infineon key data1

Fiscal year from 1 October to 2023 2022 Fiscal year from 1 October to 2023 2022
30 September 30 September
€ in in % of € in in % of Change in € in € in Change in
millions revenue millions revenue % millions millions %
Revenue by segment 16,309 14,218 15 Selected liquidity key data
Automotive 8,242 51 6,516 45 26 Cash flows from operating activities
Green Industrial Power 2,205 13 1,790 13 23 from continuing operations 3,962 3,986 (1)

Power & Sensor Systems 3,798 23 4,070 29 (7) Cash flows from investing activities (2,264) (2,441) 7

Connected Secure Systems 2,046 13 1,822 13 12 Cash flows from financing activities (1,301) (1,869) 30

Other Operating Segments 18 0 20 0 (10) Free Cash Flow4 1,158 1,648 (30)

Corporate and Eliminations – – – – – Adjusted Free Cash Flow5 1,638

Selected results of Adjusted Free Cash Flow as percentage of revenue 10.0%

operations key data Depreciation and amortization 1,754 1,664 5
Gross profit/Gross margin 7,413 45.5 6,131 43.1 21 Investments4 2,994 2,310 30
Research and
As of 30 Sep- As of 30 Sep- Change
development expenses (1,985) 12.2 (1,798) 12.6 (10)
€ in millions (unless otherwise stated) tember 2023 tember 2022 in %
Selling, general and
administrative expenses (1,599) 9.8 (1,565) 11.0 (2) Gross cash position4 3,590 3,717 (3)
Operating profit 3,948 2,845 39 Net cash position4 (1,143) (1,945) 41
Profit (loss) for the period 3,137 2,179 44 Selected financial condition key data
Segment Result/ Total assets 28,439 26,912 6
Segment Result Margin 4,399 27.0 3,378 23.8 30 Total equity 17,044 14,944 14
Basic earnings per share in € 2.38 1.65 44 Equity ratio6 59.9% 55.5% 440 bp
Diluted earnings per share in € 2.38 1.65 44 Return on Capital Employed (RoCE)4 16.6% 12.6% 400 bp
Adjusted earnings per share Market capitalization7 40,879 29,574 38
in € – diluted 2 2.65 1.97 35
Infineon employees (in total figures) 58,590 56,194 4
Dividend per share in € 3 0.35 0.32 9
1 Percentage changes of more than +/– 99.5% are shown as “+++” or “–––” in the tables in the Annual Report.
2 See the chapter “Review of results of operations” for definition. p. 52
3 A dividend per share of €0.35 for the 2023 fiscal year will be proposed to the Annual General Meeting on 23 February 2024.
4 See the chapter “Internal management system” for definition p. 37 ff.
5 See the chapter “Review of liquidity” for definition. p. 55 f.
6 Equity ratio = Total equity/Total assets.
7 The calculation is based on unrounded figures. Own shares were not taken into consideration for the calculation of market capitalization.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 3

Dividend of

35 cents
per share planned
Revenue

Infineon at €16.309 bn
+15%
a glance
Infineon Technologies AG is a world
leader in semiconductor solutions
that make life easier, safer and greener. Segment Result
Microelectronics from Infineon is and Margin
the key to a better future. In the 2023
fiscal year (ending 30 September), €4.399 bn
the Company reported revenue of
approximately €16.3 billion with 27.0%
some 58,600 employees worldwide.
Infineon is listed on the Frankfurt
Stock Exchange (ticker symbol: IFX)
and in the USA on the over-the-counter
market OTCQX International Premier
(ticker symbol: IFNNY).

58,590
employees

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 4
Letter to shareholders

Letter to shareholders
Neubiberg, November 2023

Infineon can look back on a remarkable 2023 fiscal year. On the one hand, electro­mo­
bility and renewable energy and the applications associated with them have ensured
a continuing high level of demand. On the other hand, demand for consumer applica-
tions, such as PCs and smartphones, has fallen in the wake of the Covid pandemic.
In this challenging market environment, your company has set new records for both
revenue and profitability. Our revenue rose to €16.3 billion, and we achieved a Segment
Result Margin of 27.0 percent.

Both figures exceeded our original annual forecast and are an initial confirmation
on the more ambitious course we have adopted as a company. A year ago, we raised
our long-term financial targets through the semiconductor cycle. Now we have proven
that we are also delivering at this higher level of expectation.

In our target markets, we are expecting strong growth drivers to continue and we
are anticipating big opportunities for Infineon. We want to grow and be sustainably
profitable, advance at a rapid rate, and make full use of strategic investments to lay
the important groundwork for Infineon’s future.

I would like to express my gratitude to all the 58,600 people working for Infineon for
their exceptional commitment in the past fiscal year. I would also like to thank you,
our shareholders, for your continuing confidence in our company. At our forthcoming
Annual General Meeting, we will propose an increase in the dividend payment to
€0.35 per share. Thus, we would like to ensure that you participate appropriately in
Infineon’s success while at the same time retaining the financial headroom we need
for the future development of your company.

Jochen Hanebeck
Chief Executive Officer
Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 5
Letter to shareholders

Following the last Annual General Meeting, the Supervisory Board elected a new We are driving decarbonization and digitalization with our partners
Chairman. On behalf of the Management Board, I would like to express my sincere Efforts to tackle the climate crisis are being intensified worldwide. At the same time,
thanks to the long-standing Chairman, Dr. Wolfgang Eder, for the good working rela- we are seeing rapid development in the area of digitalization. Semiconductors are
tion we have enjoyed over the past few years. Particular highlights include reorga­ essential in order to overcome the energy challenges of our time and help shape the
nizing the Management Board team, setting higher financial targets and ­preparing digital transformation. They are the building blocks of technological progress and
for the expansion of our manufacturing facilities on our site in Dresden (Germany). the engine of sustainable global development. At Infineon, we are actively doing
Dr. Wolfgang Eder was always a trusted guide and support to the ­Management Board. everything possible to drive forward decarbonization and digitalization. We are a
global leader in power systems and IoT. Together with our partners, we enable game-­
With Dr. Herbert Diess, his successor as Chairman of the Supervisory Board, Infineon changing solutions in three growth areas: green and efficient energy, clean and safe
has gained a proven expert in the major topics affecting the future of our business. mobility, and a smart and secure IoT.
Our working relation with Dr. Herbert Diess is also respectful, constructive and built
on trust, which is very important to Infineon maintaining its successful course. Five core applications are particularly strong drivers for our business: electromobility,
renewable energy, automated driving, data centers – propelled by the ever-increasing
Having successfully established the Management Board position for Digital Trans­ use of artificial intelligence – and IoT. These applications will account for around
formation, our colleague Constanze Hufenbecher decided not to renew her expiring 60 percent of our expected revenue growth over the coming years. So that Infineon
contract and has handed over the baton to Elke Reichart on 1 November 2023. can make the most of these major growth opportunities, we are setting the course
­Constanze Hufenbecher contributed significantly to the good progress made by and laying the groundwork early on.
Infineon in the areas of digitalization and sustainability. She has laid important
­foundations with the Digital Agenda and the Sustainability Strategy. Moreover, she Investments in manufacturing capacities and security of supply
established a culture of cross-departmental collaboration at Infineon. I would like will set Infineon up for long-term growth
to express my sincere personal gratitude for her achievements. Our manufacturing strategy is based on clear principles. We focus on expanding our
in-house manufacturing in those areas in which added value for our customers
Digitalization is a crucial lever for our company. I am very much looking forward to and differentiation for Infineon is created. This is the case, for example, for power
working together with Elke Reichart. She will bring new perspectives and impetus to semiconductors and sensors. However, in the case of highly integrated digital
the Management Board team and use her extensive experience to help lead Infineon ­products such as microcontrollers and connectivity and security components, we
into an even more successful future. prefer to work together with contract manufacturers, as the design and software
are the main sources of differentiation in those areas. We also pursue this strategy
when ­making our investment decisions.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 6
Letter to shareholders

The groundbreaking ceremony for our “Smart Power Fab” at the Dresden site took In August 2023, we therefore announced that we would be significantly increasing
place at the beginning of May 2023. This factory will link our two major growth areas, the scope of the ongoing expansion of our manufacturing facilities on our Kulim site
decarbonization and digitalization. We are strengthening our manufacturing base (Malaysia). In a second expansion phase, we want to build the world’s largest and
for both analog mixed-signal technologies and power semiconductors. Analog mixed-­ most competitive SiC power semiconductor factory based on 200-millimeter manufac­
signal components are used in power supply systems (such as those in energy-efficient turing technology there. Together with the planned conversion to 200-millimeter
chargers), in small motor control units for cars, in data centers and in IoT applications. production of our existing SiC manufacturing lines at the sites in Villach (Austria) and
The interaction between power semiconductors and analog mixed-signal compo- Kulim, this investment offers Infineon annual revenue potential of around €7 billion
nents makes particularly energy-efficient and intelligent system solutions possible. by the end of the decade.
We therefore want to use our in-house manufacturing to create some of these prod-
ucts in the future, from both a differentiation and a resilience perspective. Our investment decision is backed by numerous long-term agreements with high-­
profile customers in the automotive sector and in the field of renewable energy.
The great importance of the project for Infineon, the region, Germany and Europe has ­Additional design wins worth €5 billion and associated advance payments of around
become clear, not least due to visits to the Dresden site by high-ranking politicians €1 billion are evidence of the great confidence our customers place in Infineon as
– especially the President of the European Commission and the German Federal a reliable partner and driver of innovation.
Chancellor – and the resulting high level of media interest. Support provided by the
German Federal Government as funding body and the European Chips Act is giving In the global competition for the leading position in SiC technologies, certain strengths
our project a tailwind. The additional capacity provided by the fab will enable us to differentiate Infineon from its competitors. First of all, the trench architecture we use
meet increasing demand from our customers in the second half of the decade and in chip manufacture has advantages in terms of performance and productivity. ­Second,
will reinforce our position as a world-leading supplier of power systems. we offer all markets the most comprehensive product and packaging port­folio. Third,
we score with our excellent systems understanding and first-class access to customers.
Silicon chips of the type we make in Dresden will be the technically appropriate and
economically viable solution in many applications in the long term. Compound However, we see few opportunities for differentiation in manufacturing the SiC base
­semiconductors based on silicon carbide (SiC) and gallium nitride (GaN) expand the material used in chip production, so this we buy in. We ensure access to this material
options presented by silicon-based solutions. They enable particularly efficient, through a broad and regionally diversified supplier network. Infineon’s own laser-
fast-switching and compact system solutions that consume less power. We see rising based cold split technology enables particularly efficient use of the base material.
demand for these, especially for use in electric cars, charging stations and solar ­systems.
Your company has all the key factors at its disposal for sustainable success with SiC
We want to lead the way across the whole range of power semiconductors – for s­ ilicon solutions. We are therefore very well placed to benefit from similar economies of
chips as well as for technologies based on SiC and GaN. We are therefore ­constantly scale with SiC as has previously been the case with silicon – both in manufacturing
expanding our portfolio for different application areas. We are also increasing our and in research and development. We are very confident that we will be able to
manufacturing capacity for both types of technology, while adopting an entrepreneur- achieve a market share in SiC of 30 percent by the end of the decade.
ial and long-term approach.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 7
Letter to shareholders

So that we are equipped to handle the expected increase in demand for semiconductors We are continuing to enhance our competence in power systems
from our customers and are able to deliver in the long term, we are not only boosting and IoT with targeted acquisitions
our in-house manufacturing but also increasing the supply of semiconductors we In addition to SiC, GaN is developing into a key material for power semiconductors. It
purchase from contract manufacturers. Especially against the backdrop of geopoliti- has advantages especially at higher switching frequencies. In particular, for applications
cal uncertainty, we want to make our supply chain even more resilient in the future. such as mobile charging, power supplies for data centers, solar inverters for private
households, and onboard chargers for electric vehicles, GaN is on the brink of a break­
Together with Taiwan Semiconductor Manufacturing Company (TSMC), the world’s through and promises very strong market growth. We therefore want to continue to
largest silicon contract manufacturer based in Taiwan, and the companies Bosch and enhance our technical skills in the field of GaN.
NXP Semiconductors, we want to invest in a joint company. As we and our partners
announced in August, the European Semiconductor Manufacturing Company (ESMC) In October 2023, we completed the acquisition of the company GaN Systems. The
in Dresden is to build an ultra-modern fab for semiconductors with small feature company, which is headquartered in Ottawa (Canada), brings with it a broad port­
sizes of 12 to 28 nanometers. TSMC is to operate the fab for the entity. The project is folio of GaN-based solutions for power conversion as well as first-class application
planned under the framework of the European Chips Act. know-how. We are delighted that the team from GaN Systems, comprising more than
200 employees, is now part of Infineon.
The planned fab is an ideal complement to our own manufacturing landscape. Whereas
the projects in Dresden and Kulim mentioned above are designed to expand capacity The strengths of both companies in terms of intellectual property and application
for power semiconductors and analog mixed-signal technologies, our participation understanding ideally complement each other. Together, we now have over 450 GaN
in ESMC secures us access to capacity for our automotive microcontrollers and IoT experts, as well as more than 350 GaN patent families and a large number of highly
semiconductors, further improving our ability to meet growing demand. promising customer projects in the pipeline. This puts our company in an outstand-
ing position, opening up huge opportunities in various high-growth markets. This
This investment will bring the first FinFET fab to Europe. FinFET is a transistor techno­ will significantly accelerate our development roadmap for GaN solutions and further
logy used in state-of-the-art digital chips. Even more transistors can be housed on strengthen our leading position in power systems.
the smallest three-dimensional structures. As a result, the semiconductors are even
more powerful and energy-efficient. FinFET technology is becoming increasingly Another exciting key topic for Infineon is artificial intelligence (AI). Machine learning is
important for our high-performance microcontrollers. With this fab, we are ensuring being used in more and more IoT applications and enables new functionalities.
Infineon will have direct access to this technology in Europe, and we are strengthen-
ing the European semiconductor ecosystem in the long term. In May 2023, we acquired the company Imagimob. The startup, based in Stockholm
(Sweden), is a leading platform provider for machine learning solutions for energy-­
efficient edge devices. Imagimob’s platform enables a variety of applications, such as
audio event detection, voice control, gesture recognition, predictive maintenance,
signal classification and material detection.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 8
Letter to shareholders

With this acquisition, we are strengthening our position as a provider of machine against signal interference. This makes it extremely attractive for many IoT applications.
learning solutions, complementing our range of embedded AI solutions. This will These include secure access to vehicles and buildings, indoor navigation and pres-
enable us to transfer the capabilities of machine learning, which have until now been ence detection of people in rooms. UWB complements our connectivity technologies
used mainly in large server farms, to our microcontrollers. (Wi-Fi, Bluetooth®/ Bluetooth® Low Energy and NFC) and offers Infineon additional
opportunities in an interesting growth market.
Artificial intelligence also offers Infineon huge growth potential in the area of power
systems. More and more data are being recorded, processed, stored and linked. To Besides the targeted enhancement of our technological skills through acquisitions,
make the data usable for different applications, the major cloud computing providers we are rapidly advancing with the company’s research and development activities.
are increasingly employing generative AI. As the example of ChatGPT shows, large The focus here is the benefit provided to customers. Our aim is to roll out differentiat-
language models (LLMs) have the potential to take digitalization to a completely new ing solutions at an even faster rate. It is therefore crucial that we recognize product
level. and customer requirements at an early stage and that we understand our customers’
systems. Our “from product thinking to system understanding” approach, which
In the coming years, AI will be used in more and more application areas. The volume we have applied for many years, has proved its worth. Given the growing number of
of data to be processed and the computing power required as a result will mean applications served by Infineon, this approach is now more important than ever.
a significant increase in the quantity and value of the semiconductors needed in
the data center servers. Energy-efficient power stages help reduce power losses and Particularly in application areas that are new to Infineon, we work closely together
cooling efforts This allows operators to significantly reduce their costs – and avoid with key customers on development. Our teams develop new solutions in tandem
CO2. Demand is growing strongly. We offer highly energy-efficient power solutions with customers in an iterative process. By exchanging ideas directly, they learn to
for the entire supply chain, from the grid to the central processor (GPU), making a understand customer and market requirements even better and more quickly and
broader use of AI possible. Green computing is an ideal application area for Infineon. can therefore offer tailor-made system solutions within a short period of time.
This is a good example of how decarbonization and digitalization are closely linked
with one another. We are making Infineon CO2-neutral by 2030
At Infineon, as a leading manufacturer of semiconductors, our objective is not only to
Networks, data centers, servers and the IT infrastructure form the backbone of digi­ be a technological leader but also a pioneer in sustainability. Infineon will become
talization. Another crucial element of the IoT is wireless connectivity between end CO2-neutral by the end of the 2030 fiscal year. Our target includes all direct emissions
devices. In October 2023, we acquired the company 3db Access, a move designed to (scope 1) as well as indirect emissions from purchased electricity and heat (scope 2).
enhance our skills in this area as well. The startup based in Zurich (Switzerland) is By the end of the 2025 fiscal year, we want to have reduced our emissions by 70 percent
a pioneer in energy-efficient ultra-wideband (UWB) technology. UWB technology can compared with 2019. To achieve these targets, we are working in particular on avoid-
be used to precisely determine positions and distances while being robustly protected ing direct emissions.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 9
Letter to shareholders

Here we are making good progress. At the end of the 2023 fiscal year, our scope 1 and A challenging market environment in the 2024 fiscal year
scope 2 emissions were around 56.8 percent below the emissions of the base year 2019. At the beginning of the 2024 fiscal year, we are operating in an environment that con-
The installation of new PFC abatement systems in our frontend manufacturing in tinues to present challenges. The mobility of the future and renewable energies
Kulim (Malaysia) has already enabled us to reduce our scope 1 emissions by 21 percent. are currently the strongest growth drivers for our business. In all other areas, we see
In the past fiscal year, we also launched a similar project at our site in Austin (Texas, a temporarily difficult, cyclical market environment.
USA). This means that we will have equipped all our prime manufacturing facilities
with highly efficient PFC abatement systems. The new manufacturing facilities Overall, we are expecting revenue growth to continue in the 2024 fiscal year but at
referred to above will of course be equipped with such systems right from the start, a lower rate. We are assuming an increase in revenue of 4 percent. Hence, after the
so that they are in line with our CO2 neutrality goal. two boom years of 2022 and 2023, we anticipate growth will be below the target we
have set ourselves of average revenue growth of “more than 10 percent per year”
In addition to avoiding direct emissions, other key levers for reducing CO2 are energy over the semiconductor cycle. However, the sequence of different growth phases is
conservation and the use of green electricity. In the 2023 fiscal year, we were able nothing unusual in the semiconductor market and as a company we know how to
to use green electricity to meet over three quarters of our electricity requirements. deal with this situation.

We are continuing to develop our corporate culture With regard to structural growth opportunities, we are continuing to implement our
Infineon is seeing strong growth. Over the past few years, our business has become strategy consistently and we are reinforcing our leading position in power systems
bigger and, at the same time, more complex. We therefore make adjustments in the and IoT with long-term investments in our manufacturing landscape and technological
company, adapt our processes and, last but not least, continue to develop our corpo- leadership. Decarbonization and digitalization remain the foundations of our busi-
rate culture. Crucial to our success is not only what we do but how we do it. ness. With our solutions, we are driving forward the green and digital transformation,
thus providing our customers and you, our shareholders, with tangible added value.
When I assumed my role as CEO, we launched the SPIRIT project. This is designed to
deliberately promote three behaviors in the company. We set ourselves ambitious
targets at all levels. We are accountable for our results and clarify our responsibilities. Neubiberg, November 2023
We make timely decisions that are implemented consistently.

Whether you are setting ambitious targets or clarifying responsibilities, you need to
begin at the corporate level. We therefore made a decision in the summer that, in the
future, we would combine accountability with functional management roles across
the Group. This will make us significantly faster, because it will reduce the complexity
in our organization and create strong global functions – with local teams, where this is Jochen Hanebeck
expedient. Furthermore, we promote a sense of responsibility and purposefulness as Chief Executive Officer
elements of our corporate culture. All this makes us even more attractive as an employer.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 10
The Management Board

The Management Board

(From left to right)

Andreas Urschitz
Chief Marketing Officer

Dr. Sven Schneider

Chief Financial Officer

Jochen Hanebeck
Chief Executive Officer

Elke Reichart
Chief Digital
Transformation Officer

Dr. Rutger Wijburg

Chief Operations Officer

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 11
The Management Board

The Management Board

Andreas Urschitz Dr. Sven Schneider Jochen Hanebeck Elke Reichart Dr. Rutger Wijburg
Chief Marketing Officer Chief Financial Officer Chief Executive Officer Chief Digital Transformation Officer Chief Operations Officer

Andreas Urschitz has been a Sven Schneider has been Chief Jochen Hanebeck has been a Elke Reichart has been a member of Rutger Wijburg has been a mem-
member of the Management Board Financial Officer at Infineon member of the Management the Management Board of Infineon ber of the Management Board of
and Chief Marketing Officer of Technologies AG since 2019 Board of Infineon Technologies AG Technologies AG and Chief Digital Infineon Technologies AG and Chief
Infineon Technologies AG since (appointed until 30 April 2027). since 2016. He has been CEO Transformation Officer since 2023 Operations Officer since 1 April 2022
2022 (appointed until 31 May 2025). He is responsible for Group since 1 April 2022 (appointed until (appointed until 31 October 2026). (appointed until 31 March 2025).
He is responsible for Group Sales, Finance; Group Financial Con- 31 March 2027). He is responsible She is responsible for Groupwide He is responsible for Group Manufac­
Marketing & Distribution; Customer trolling & Planning; Treasury; for Divisions; Group Strategy; Digitalization Strategy, Information turing, Supply Chain, Procurement,
Engagement Strategy; Application Taxes; Accounting, Consolidation Mergers & Acquisitions; Organization Technology, Digital Sales & Market- Customs, Quality Management, Real
Framework & Services; Organization & Reporting; Investor Relations; and Strategy enablement/imple- ing Platforms and Services, Business Estate and Facility Management
and Strategy enablement/imple- Compliance; Audit; Risk Manage- mentation of region Americas; Continuity, Business Excellence, (Manufacturing Sites).
mentation of Regions Greater China, ment; Internal Controls. Communications & Public Policy; Group Processes.
Asia Pacific and Japan; Marketing Human Resources (Labor Director); Rutger Wijburg was born in
Communications. Sven Schneider was born in 1966 in Legal & Patents; Research & Devel- Elke Reichart was born in 1965 in Nijmegen, Netherlands, in 1962.
Berlin, Germany. After completing opment (CTO). Stuttgart, Germany. She received He studied Electrical and Electronics
Andreas Urschitz was born in his studies in business administration her diploma in Romance Languages Engineering at the University of
1972 in Klagenfurt, Austria. He (Diplom-Kaufmann), he received Jochen Hanebeck was born in and Economics as well as a post- Twente, Netherlands, and received
obtained his master’s degree in his doctorate in business adminis­ 1968 in Dortmund, Germany. graduate degree in Applied Com- his PhD in 1990. He started his
commercial science at the Vienna tration from the University of Trier, He received a degree in electrical puter Science from the University career in 1990 at the University
University of Economics and Busi- Germany. From 1995 to 2019, he engineering from RWTH Aachen of Gießen, Germany. She began of Twente. Before joining Infineon
ness, Austria. He has been with held several positions at Linde AG, University, Germany. He has been her career at Hewlett-Packard Inc. in 2018, he held various leading
Infineon (Siemens AG until 1999) most recently as Spokesman of with Infineon since 1994 (Siemens in 1991. positions at Philips, NXP and
since 1995. the Executive Board, Chief Finan- AG until 1999). Globalfoundries.
cial Officer and Labor Director.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 12
Report of the Supervisory Board

Report of the Supervisory Board

to the Annual General Meeting
Main activities of the Supervisory Board
During the 2023 fiscal year, the Supervisory Board again performed its duties with
utmost diligence in accordance with the law, Infineon’s Articles of Association and
the Supervisory Board’s own rules of procedure. Its work was based in particular on
reports presented by the Management Board at Supervisory Board and committee
meetings regarding all issues relevant to Infineon. For the most part, the focus was
again on corporate strategy, current business performance and the economic situa-
tion, financial and investment planning, and the risk profile, as well as issues relating
to risk management and compliance. In addition, the Supervisory Board addressed
the replacement of the Chairman of the Supervisory Board and other personnel
Dr. Herbert Diess changes on the Supervisory Board, as well as preparing for the appointment of a new
Chairman of the Supervisory Board Management Board member responsible for digital transformation. The Supervisory
Board was provided with written quarterly reports on the economic environment,
Infineon’s business performance, including investment and acquisition activities, key
financial data, risks and opportunities, and major areas of litigation, as well as other
specific topics of relevance. Between quarterly reports, the Management Board also
provided the Supervisory Board with additional information in the form of monthly
reports on current business performance and developments.
The times we live in are being affected by so much change. What sets us apart at
Infineon is that we see this as an opportunity and are actively working to shape that As Chairman of the Supervisory Board, I was also in regular contact with both the Chief
change. Our forward-looking technologies and products are making an important Executive Officer and other members of the Management Board between meetings.
contribution towards halting (or at least slowing down) climate change and towards The CEO kept me well-informed at all times of other key events for Infineon. My work-
using digitalization with human beings in mind. I can see how Infineon employees ing relationship with the CEO was respectful, constructive and based on trust.
around the world are playing their part with enthusiasm, skill and a positive mindset.
This is not only making us an innovative high-tech company but also ensures sustain- In the 2023 fiscal year, the full Supervisory Board convened nine times, holding
able economic success. The 2023 fiscal year has demonstrated this once again. We six ordinary meetings and three extraordinary meetings. Additionally, two resolutions
want you, dear shareholders, to be able to participate in this success in the usual way were passed on the basis of written communication. The attendance rate at Super­
and will therefore submit a proposal jointly with the Management Board to the Annual visory Board meetings was just under 98 percent; Diana Vitale was excused from attend­
General Meeting for another increase in the dividend to €0.35 per share entitled ing one meeting and Dr. Manfred Puffer from two meetings. The attendance rate at the
to a dividend. For many years, Infineon’s success story has been built on outstanding Supervisory Board’s committee meetings was 100 percent. Details of the individual
technological and business performance combined with added value for society attendance record of Supervisory Board members at full Supervisory Board and com-
as a whole, and I would be delighted if you continued to accompany us on our way. mittee meetings are provided in a table in the Statement on Corporate Governance.
www.infineon.com/declaration-on-corporate-governance

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 13
Report of the Supervisory Board

The three extraordinary meetings of the full Supervisory Board were conducted virtu- › F inally, the Supervisory Board examined measures relating to the Group’s inorganic
ally, and all the ordinary meetings were face-to-face meetings. Of the six meetings of growth in promising new fields and granted its approval for the acquisition of
the Executive Committee, two were virtual. One of the five meetings of the Investment, the Canadian company GaN Systems, the technological leader in the development
Finance and Audit Committee and four of the six meetings of the Nomination Com- of GaN-based solutions for power conversion. The acquisition will significantly
mittee were in a virtual format. All the meetings of the Strategy and Technology Com- strengthen Infineon’s leading position in power systems. The Supervisory Board
mittee, without exception, were face-to-face meetings. also agreed on strategic portfolio management measures with the Management
Board and endorsed the sale of its HiRel (High Reliability) DC-DC converter business to
In preparation for ordinary Supervisory Board meetings, separate preliminary meet- Micross Components, a transaction that enables Infineon to focus in the future on
ings were held for both the shareholder representatives and the employee representa- those HiRel business areas that benefit from its leading semiconductor technologies.
tives. The Supervisory Board and the Investment, Finance and Audit Committee also
convened regularly without the presence of the Management Board. In the 2023 fiscal year, separately from the examination of specific strategic projects,
the Supervisory Board also considered various aspects of Infineon’s corporate strategy
Corporate strategy at a daylong strategy meeting that took place on the Dresden site. Topics discussed
The 2023 fiscal year was characterized by a variety of strategic projects that were included strategic fundamentals, portfolio management, parameters for organic and
closely monitored and then all approved by the Supervisory Board: inorganic growth, geopolitical issues, financial targets and, last but not least, Infineon’s
sustainability strategy.
› F irst, the Supervisory Board approved a more ambitious target operating model
and thereby an upward revision of Infineon’s long-term financial targets. Like the Personnel matters relating to the Management Board
­Management Board, the Supervisory Board is convinced that decarbonization and In the course of the fiscal year, Constanze Hufenbecher, Management Board member
digitalization will ensure structurally increasing demand for semiconductors and and Chief Digital Transformation Officer (CDTO), informed the Supervisory Board
that, thanks to its strategic focus, Infineon will benefit disproportionately from this of her intention not to renew her contract which was due to expire in April 2024. The
development. Supervisory Board accepted her decision with regret. Immediately thereafter, the
Supervisory Board initiated the process of finding a replacement for the CDTO position
› I n addition, the past fiscal year has involved major investment – the construction on the Management Board. Based on the Supervisory Board’s continuous succes-
of a new factory in Dresden (Germany), significant expansion of manufacturing sion planning and with the support of a human resources consultant, an extensive
in Kulim (Malaysia) and, finally, the participation of Infineon in a joint venture search process was launched. Infineon was eventually able to recruit Elke Reichart,
with TSMC, Bosch and NXP to build a modern semiconductor fab, also in Dresden. an experienced digitalization expert. Elke Reichart was appointed as a member of the
Infineon is therefore creating the production capacity required to reliably meet Management Board for three years with effect from 1 November 2023. Constanze
growing demand from its customers over the long term. Moreover, the investment Hufenbecher resigned from the Management Board with effect from 31 October 2023.
in Dresden is an important milestone that will reinforce the European semicon­ The Supervisory Board thanks Constanze Hufenbecher for her achievements and
ductor ecosystem and strengthen supply chain resilience in Europe. Accordingly, ­personal commitment and wishes Elke Reichart a successful start in her new role.
the Supervisory Board was satisfied that these investments were necessary for
the business and made economic sense and approved the plans.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 14
Report of the Supervisory Board

Management Board remuneration Supervisory Board topics

In November 2022, the Supervisory Board established a new remuneration system
for the Management Board. This created a remuneration structure with higher variable Personnel matters relating to the Supervisory Board
remuneration components, whereby the Management Board remuneration will in Dr. Wolfgang Eder and Hans-Ulrich Holdenried resigned from the Supervisory Board
the future be even more closely linked with the success of the business. Moreover, with effect from the end of the Annual General Meeting on 16 February 2023. Based
the maximum remuneration for longer-serving Management Board members will on a proposal by the Supervisory Board, Klaus Helmrich and I were newly elected to
be increased, giving the Supervisory Board more scope to offer experienced Manage- the Supervisory Board. At its meeting immediately after the Annual General Meeting,
ment Board members competitive remuneration. The restriction of the STI modifier the Supervisory Board elected me as the new Chairman of the Supervisory Board,
to extraordinary developments brought the system more in line with the provisions as a member and the Chairman of the Strategy and Technology Committee, and as
set out in the German Stock Corporation Act (AktG) and the German Corporate Gover- the Chairman of the Nomination Committee. I am grateful for this vote of confidence
nance Code. Finally, the opportunity was provided to weight ESG targets in the long- from Infineon’s Supervisory Board and would like to take the opportunity here to
term variable remuneration even more heavily in the future. At the Annual General thank once again Dr. Wolfgang Eder and also Hans-Ulrich Holdenried for their success­
Meeting in February 2023, this new remuneration system for the Management Board ful work over the past years.
was approved by a large majority. It was thereupon implemented in all Management
Board employment contracts as of 1 April 2023. Following the resignation of Géraldine Picaud from the Supervisory Board at the
beginning of 2023, Ute Wolf was appointed as a member of the Supervisory Board by
Further information on Management Board remuneration is available in the detailed court order in April 2023 and elected by the Supervisory Board as a member of the
Remuneration Report. As in the previous year, the Management Board and the Super- Investment, Finance and Audit Committee. Until shortly before her appointment by
visory Board decided to ask the auditors to perform an additional review of the Infineon, Ute Wolf was the Chief Financial Officer of a public limited company listed
­content of the Remuneration Report in addition to their formal audit of the report. in Germany. In addition, she has already spent several years as the Chair of audit
KPMG issued an unqualified audit opinion on the Remuneration Report. committees of listed companies. She therefore increases the level of financial expertise
on the Supervisory Board. At the Annual General Meeting to be held in February 2024,
Litigation the Supervisory Board will propose that Ute Wolf be elected to the Supervisory Board
The Supervisory Board was regularly provided during the 2023 fiscal year with in-depth for a regular four-year term of office.
information regarding major legal disputes, which it then discussed at length with
the Management Board. These included, in particular, the legal dispute with the insol­ Basic and ongoing training
vency administrator of Qimonda AG pertaining to alleged residual liability claims, Supervisory Board members are responsible for undertaking any basic or ongoing
which has been ongoing for years. training considered necessary to perform their duties, and they receive appropriate
support from Infineon to do so. In-house information events are held to provide targe­
ted training. In the 2023 fiscal year, for example, events took place that covered the
EU Taxonomy and governance topics as well as current regulatory developments affec­
ting the Supervisory Board. As part of the onboarding process for new Supervisory
Board members, Infineon also conducts comprehensive briefings covering a broad
range of topics, including its individual operating segments, the principles and key
elements of its corporate strategy, investment planning and its manufacturing strategy.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 15
Report of the Supervisory Board

Committee work Its activities centered on monitoring the financial reporting process, reviewing the
The Supervisory Board’s various committees are responsible for drawing up resolutions half-year and quarterly financial statements, conducting the preliminary audit of the
and preparing other major topics that need to be dealt with by the full Supervisory Separate Financial Statements, Consolidated Financial Statements and Combined
Board. Moreover, the Supervisory Board has delegated certain decision-making powers Management Report for Infineon Technologies AG and the Infineon Group, and dis-
to its committees. The chairpersons of each committee are required to report on cussing the audit reports with the auditor. The Committee also conducted an assess-
committee meetings at the next full Supervisory Board meeting. ment of the quality of the audit. In addition, the Committee examined Infineon’s
financial and investment budget. It also received regular reports on the internal con-
Mediation Committee trol, internal audit, risk management and compliance management systems and
The Mediation Committee did not need to convene during the reporting year. deliberated on their appropriateness and effectiveness. The Committee was also
­provided with continuous updates on additional risks and significant legal disputes.
Nomination Committee
The Nomination Committee held six meetings in total during the 2023 fiscal year. The Committee’s recommendation to the full Supervisory Board to propose to share-
The topics discussed at the meetings included the replacements for Supervisory holders at the 2023 Annual General Meeting that KPMG AG Wirtschaftsprüfungs-
Board positions referred to above following the resignations of Dr. Wolfgang Eder, gesellschaft, Munich (KPMG) be elected for the last time as Company and Group audi-
Hans-Ulrich Holdenried and Géraldine Picaud. Klaus Helmrich and I were elected at tor was based on a Declaration of Independence obtained from KPMG as well as an
the 2023 Annual General Meeting and Ute Wolf was appointed by the court. The analysis of the non-audit services provided by KPMG. There were no indications of
committee also prepared the nomination for election at the 2024 Annual General conflicts of interest, grounds for exclusion or other lack of independence on the part
Meeting of Ute Wolf, as well as of Prof. Hermann Eul, an acknowledged expert in of the auditor. The Committee also considered the fee arrangements, issued con-
semiconductors. tracts for the relevant audit engagements and defined supplementary areas for audit
emphasis.
Executive Committee
At its ordinary meetings, the Executive Committee focused primarily on preparing the Representatives of the auditor attended all the meetings of the Investment, Finance
Supervisory Board’s resolutions to determine the level of variable remuneration to be and Audit Committee and reported in detail on the audit procedures performed. At
paid to Management Board members. These included, firstly, determining the Short- each of the meetings, there was also a closed session involving the auditor and the
Term Incentive (STI) target achievement levels for the 2022 fiscal year and setting new members of the Investment, Finance and Audit Committee without the Management
target values for the 2023 fiscal year and, secondly, determining the STI modifier cri- Board being present. This also applied to the full Supervisory Board meeting that
teria, confirming the ESG targets for limiting carbon emissions and increasing diversity considered the financial statements.
that are relevant for the Long-Term Incentive (LTI) and confirming the composition
of the TSR (Total Shareholder Return) peer group. The topics discussed at the extra­ The Committee also devoted time to the Remuneration Report and the separate
ordinary meetings were the personnel and remuneration issues referred to above. ­combined Non-Financial Report and, in this context, considered other sustainability
issues, including the German Supply Chain Act (LkSG).
Investment, Finance and Audit Committee
The Investment, Finance and Audit Committee held five ordinary meetings in the
2023 fiscal year.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 16
Report of the Supervisory Board

Strategy and Technology Committee and the full Supervisory Board, the framework for the Supervisory Board’s engage-
The Supervisory Board’s Strategy and Technology Committee convened three times ment with strategic topics, and the parameters of the Supervisory Board’s continuous
during the reporting year. The Management Board provided it with reports on a num- succession planning for Management Board positions.
ber of topics, including key aspects of the macroeconomic market and competitive
environment and the progress of the Group’s digital agenda. Other areas discussed Skills and expertise profile and list of objectives for
at committee meetings were strategic considerations with regard to the expansion of the Supervisory Board/qualifications matrix
manufacturing capacity and the value contribution of software at Infineon. The Supervisory Board decided to make a modification to the skills and expertise
profile and list of objectives. One of the reasons for this was to make explicit refer-
ence in the skills and expertise profile to sustainability expertise. It was also decided
Corporate Governance to modify the age limit of 70 previously set for Supervisory Board members to the
extent that, in the future, it will no longer be simply a rule but a strict limit. Moreover,
Declaration of Compliance 2023 the Supervisory Board looked in detail at the qualifications matrix published in the
In the Declaration of Compliance dated November 2023, the Management Board and Statement on Corporate Governance.
Supervisory Board jointly declared that, since the submission of the last Declaration
of Compliance in November 2022, all the recommendations of the German Corporate Examination of potential conflicts of interest
Governance Code contained in the version dated 28 April 2022 have been complied The members of the Management Board and of the Supervisory Board are required
with and will continue to be complied with in the future. to disclose any conflicts of interest to the Supervisory Board without delay. One
Super­visory Board member disclosed a potential conflict of interest in respect of an
The actual wording of the Declaration of Compliance 2023 and all previous Declara- M&A project. Thereafter, this Supervisory Board member was not given access to
tions of Compliance are available on Infineon’s website. the ­relevant documents and also did not participate in the meetings and decision-­
www.infineon.com/declaration-of-compliance making process of the Supervisory Board in this respect.

Self-assessment by the Supervisory Board Prior to Management Board members assuming sideline activities, particularly super-
The Supervisory Board regularly assesses how effectively it performs its duties. It visory board mandates outside the Company, the German Corporate Governance
conducted such a self-assessment in the 2023 fiscal year. Given that in the 2022 fiscal Code requires that permission be granted by the Supervisory Board. No conflicts of
year, the self-assessment was carried out with the support of an external consultant interest were discernible in any of the sideline activities performed. In fact, they were
(including personal interviews with all the members of the Management Board and all in Infineon’s best interests and were therefore approved by the Supervisory Board
the Supervisory Board), Infineon reverted in the 2023 fiscal year to the use of an inter- and/or Executive Committee.
nal questionnaire. The results of the questionnaire were discussed in the course of
a Supervisory Board meeting in August 2023 and a full-day Supervisory Board work- Further information on the topic of corporate governance is available in the Statement
shop in November 2023. Issues discussed included reinforcing the expertise of of Corporate Governance.
the Supervisory Board in the area of semiconductors, which led to Prof. Hermann Eul www.infineon.com/declaration-on-corporate-governance
being nominated to the Supervisory Board, cooperation between the committees

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 17
Report of the Supervisory Board

Rules of procedure for the Supervisory Board and KPMG has audited the Separate Financial Statements of Infineon Technologies AG
the Management Board and the Consolidated Financial Statements of the Infineon Group and reviewed the
All the rules of procedure for the Supervisory Board and the Management Board are Interim Consolidated Financial Statements since the 1999 fiscal year (short fiscal year
available on the Infineon website. from 1 April 1999 to 30 September 1999). Martin Schmitt, the auditor responsible for
www.infineon.com/cms/en/about-infineon/investor/corporate-governance/articles-of-association/ the engagement, signed the auditor’s report for the first time for the 2021 fiscal year
(1 October 2020 to 30 September 2021) and Angelika Huber-Straßer, as co-signatory,
Related party transactions for the first time for the 2023 fiscal year (1 October 2022 to 30 September 2023).
Publicly listed companies such as Infineon require the approval of the Supervisory
Board or one of its committees before entering into certain transactions with related At the meeting of the Investment, Finance and Audit Committee held on 14 November
parties. In order to identify related party transactions that require approval and to 2023 and continued in a conference call on 21 November 2023, thorough discussions
treat them in accordance with the law, Infineon has implemented a procedure based were held with the auditor regarding the Separate Financial Statements, the Consoli-
on guidelines that apply worldwide across the Group. The Supervisory Board has dated Financial Statements, the Combined Management Report, the appropriation
­delegated responsibility in this area to the Investment, Finance and Audit Committee, of profit and the auditor’s findings. The Committee deliberated at length on the key
particularly for resolutions requiring approval. There were no related party trans­ audit matters disclosed in the auditor’s report as well as on the related audit proce-
actions requiring approval in the 2023 fiscal year. dures. Based on the insights gained in the course of these deliberations, the Investment,
Finance and Audit Committee resolved to suggest to the Supervisory Board that the
financial statements drawn up and presented by the Management Board be approved
Separate and Consolidated Financial Statements and the proposed appropriation of profit agreed to.

KPMG audited the Separate Financial Statements of Infineon Technologies AG and The Separate Financial Statements, the Consolidated Financial Statements, the Com-
the Consolidated Financial Statements as of 30 September 2023, as well as the bined Management Report, the Management Board’s proposal for the appropriation
­Combined Management Report of Infineon Technologies AG and the Infineon Group, of unappropriated profit (all prepared by the Management Board), and KPMG’s long-
and issued unqualified opinions thereon. form audit reports were all made available to the Supervisory Board at its meeting on
23 November 2023. At this meeting, the Chairman of the Investment, Finance and
The Half-Year Financial Report was also reviewed by KPMG. No issues were identified Audit Committee reported in depth on the corresponding recommendations of the
that might indicate that the condensed Interim Consolidated Financial Statements Committee. In addition, all material issues relevant to the financial statements and
or the Interim Group Management Report were not prepared in accordance with the the audit, including the key audit matters, were exhaustively discussed with the audi-
applicable provisions in all material respects. tor and closely examined by the Supervisory Board. The examination also covered
the proposal to pay a dividend of €0.35 per share entitled to dividend.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 18
Report of the Supervisory Board

After detailed discussions, the Supervisory Board concluded that it had no objections the Investment, Finance and Audit Committee at its meeting on 14 November 2023,
to the financial statements and the audits performed by the auditor. In its opinion, the which was continued in a conference call on 21 November 2023, and by the Super­
Combined Management Report complied with all legal requirements. The Supervisory visory Board at its meeting on 23 November 2023. The Supervisory Board approved
Board also concurred with the assertions regarding Infineon’s future development the Remuneration Report and positively acknowledged the combined separate
contained therein, as well as with the results of the audit of the financial statements. Non-Financial Report prepared by the Management Board.
It therefore approved the Separate Financial Statements of Infineon Technologies AG
and the Consolidated Financial Statements of the Infineon Group for the 2023 fiscal The Supervisory Board wishes to thank all Infineon employees and the Management
year. The Separate Financial Statements were adopted accordingly. The Supervisory Board for their great commitment and their excellent performance in the 2023 fiscal
Board also approved the Management Board’s proposal for the appropriation of year, which has again been a challenging year.
unappropriated profit.
Neubiberg, November 2023
Moreover, the Investment, Finance and Audit Committee and the full Supervisory On behalf of the Supervisory Board
Board deliberated on the combined separate Non-Financial Report for the year ended
30 September 2023 drawn up by the Management Board and the Remuneration
Report prepared together with the Management Board. KPMG performed a reason-
able assurance engagement for the Remuneration Report and a limited assurance
engagement for some parts of the combined separate Non-Financial Report and a Dr. Herbert Diess
reasonable assurance engagement for other parts of that report. In both cases, KPMG Chairman of the Supervisory Board
issued an unqualified opinion thereon. The documents were carefully examined by

Infineon | Annual Report 2023

 19

Combined Management Report

20 Business model 42 2023 fiscal year This report combines the Group Management Report of Infineon (“Infineon”
21 Overview 42 Group performance or “the Group”) – comprising Infineon Technologies AG (hereafter also
referred to as “the Company”) and its consolidated subsidiaries – and the
22 Value chain and manufacturing 44 Segment performance Management Report of Infineon Technologies AG.
24 The segments 49 Review of results of operations
The Combined Management Report contains forward-looking statements
27 Group strategy 53 Review of financial condition
about the business, financial condition and earnings performance of
27 Long-term growth trends 55 Review of liquidity Infineon. These statements are based on assumptions and projections on
27 Strategic targets 58 Infineon on the capital market the basis of currently available information and present estimates. They
are subject to a multitude of uncertainties and risks. Actual business devel­
29 Strategic guidelines 61 Overall statement on Infineon’s financial condition opment may therefore differ materially from what has been expected.
33 Human resources strategy Beyond disclosure requirements stipulated by law, Infineon does not
62 Report on outlook, risk and opportunity
34 Research and development undertake any obligation to update forward-looking statements.
62 Outlook
37 Internal management system 65 Risk and opportunity report With effect from 1 April 2023, the “Industrial Power Control” segment
was renamed “Green Industrial Power”. Decarbonization, electrification
40 Review of the semiconductor industry 79 Infineon Technologies AG and energy efficiency are important drivers of the business in this seg-
82 Corporate Governance ment. This focus and the significant contribution made by this segment
to CO2 reduction are reflected in its new name. The change of name has
82 Information pursuant to section 289a, paragraph 1 no impact on the organizational structure, strategy or scope of business.
and section 315a, paragraph 1 of the German
Commercial Code (HGB) The content of these sections is voluntary content that has not been
86 Statement on Corporate Governance pursuant to sections checked by the auditor but only read critically. In the case of cross-­
references, the information to which the cross-references refer has not
289f and 315d of the German Commercial Code (HGB) been checked either.
86 Remuneration Report
87 List of references

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 20
Business model


Business model

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 21
Business model
Overview

Overview
Semiconductors are essential to mastering the challenges of decarbonization and
digital transforma­tion. They make our everyday lives easier, safer and greener. With
around 58,600 employees worldwide, Infineon is a leading global provider of semi-
conductor solutions that pave the way for green and efficient energy, clean and safe
mobility, and intelligent and secure IoT. Infineon develops, manufactures and markets
a large number of semiconductors and semiconductor-based solutions, focusing
on the key markets in the automotive, industrial and consumer sectors. Its products
range from standard components to special components for digital, analog and
mixed-signal applications, all the way to customer-specific solutions and the appro-
priate software.

Our core business includes power semiconductors based on silicon (Si), silicon carbide
(SiC) and gallium nitride (GaN) in the form of individual components, modules and
system solutions. Over the years, Infineon has acquired in-depth knowledge about
the use of power semiconductors in all applications and the specific challenges
­associated with them, developing a very broad portfolio. By adopting our strategic
approach “Product to System”, we combine these power semiconductors with
­microcontrollers (including software and driver components), so that we can provide
perfect solutions for energy conversion systems and enable decarbonization.

In the area of digitalization, we have a broad portfolio of microcontrollers with hard-

ware-based security, sensors and connectivity products, such as Wi-Fi and Bluetooth, In addition to our established core business, we also service new and adjacent busi-
supplemented by software. These are used in the automotive, industrial and consumer ness areas. Links may arise between the different areas, not only in terms of products
sectors, as well as in end applications such as mobile payment and governmental or technology but also in terms of markets or applications.
identity documents.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 22
Business model
Value chain and manufacturing

Value chain and manufacturing C01 The main stages of the semiconductor value chain

Infineon covers the main stages of the semiconductor value chain: from development Frontend Backend
and design, via frontend and backend manufacturing and marketing, to delivery manufacturing manufacturing

to customers (see C01). Increasingly, it also provides software and other services,
In-house In-house
such as application-specific support for the implementation of its solutions. manufacturing manufacturing
Distribution
Customer
center
In frontend manufacturing, the wafers are processed. Optical, physical and chemical By foundry By
methods are used to create transistors and their interconnections, thus determining partners sub-contractors

the function of the chip. The wafers are transferred from the frontend site to a back-
Design
end site, where the remaining processing steps take place in backend manufacturing. Services

Application Digital
Software
support services

These steps include sawing the wafer into individual chips as well as assembly and
testing. Following the backend manufacturing, the chips are sold to customers via
regional distribution centers.

In order to optimize the use of capital and increase flexibility, we use external manufac­
turing partners in addition to our in-house manufacturing. In frontend manufacturing,
this applies primarily to manufacturing processes with little potential for differen­
tiation and, in backend manufacturing, to standardized package types. More informa-
tion about our manufacturing strategy is given in the chapter “Group strategy”. p. 27 ff.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 23
Business model
Value chain and manufacturing

Headquarters and manufacturing sites

2
5 3 10
8
4 9
4
6 6
2
2 1
5
3
1
7 5

3
4
6 1

Americas Europe, Middle East, Africa Asia-Pacific

Mexico USA Austria Hungary Indonesia Singapore
■ 1 Tijuana ■ 2 El Segundo, CA ■ 1 Villach ■6 Cegléd ■ 1 Batam ■ ■ 6 Singapore

■ 3 Austin, TX

■ 4 Leominster, MA
Germany Korea Thailand
■ 2 Neubiberg ■ 2 Cheonan ■ 7 Bangkok
■ 5 Mesa, AZ

■ 6 San José, CA
near Munich
Malaysia
■ 3 Dresden
■ 3 Kulim
Greater China
■ ■ 4 Regensburg
■ 4 Melaka Mainland China
■ 5 Warstein
■ 8 Shanghai
Philippines ■ 9 Wuxi
■ 5 Cavite

Japan
■ 10 Tokyo

■ Corporate headquarters ■ Regional headquarters ■ Frontend manufacturing ■ Backend manufacturing

For the definition of frontend/backend manufacturing, see chapter “Value chain and manufacturing”. p. 22

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 24
Business model
The segments

The segments C02 Core competencies in the segments

In addition to general areas within the Group, such as manufacturing and various cor- ATV GIP PSS CSS
porate functions, Infineon comprises four segments (also known as divisions). Each
Core competencies Automotive Green Power & Sensor Connected
segment focuses on the needs of its own target markets and customers and also has Industrial Power Systems Secure Systems
individual responsibility for specific areas that reflect its core competencies. The
Automotive segment is responsible for the semiconductor business for automotive Sensor technologies ✓ ✓
electronics. The Green Industrial Power segment concentrates on power semicon-
ductors primarily used in industrial applications and renewable energy, while the
Radio frequency ✓ ✓
Power & Sensor Systems segment addresses not only sensor technologies but also Embedded control ✓ ✓ ✓
power supplies in general, including those for data centers, telecommunications
Control of
­networks and more consumer-oriented applications. Activities relating to IoT and power semiconductors ✓ ✓ ✓ ✓
­traditional and new security applications are bundled within the Connected Secure
Systems segment. The segments often cooperate with one another to ensure com- Power semiconductors ✓ ✓ ✓
prehensive coverage of the requirements of the various target markets. As a result, Memories for
the sales activities of one segment are generally, but not always, focused on its specific applications ✓
own target market.
Connectivity ✓ ✓
Chart C02 provides an overview of the core competencies of the individual segments.
Security ✓ ✓
Software ✓ ✓ ✓ ✓

A detailed presentation of the applications and product range of the individual

segments is given in the chapter “Applications and product range”. p. 180 ff.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 25
Business model
The segments

ATV Automotive GIP Green Industrial Power

The Automotive segment shapes the future of mobility with products and solutions The Green Industrial Power segment specializes in semiconductor solutions for the
to make cars clean, safe and smart. We cover all application areas in the vehicle: pow- intelligent management and efficient conversion of electric energy along the entire
ertrain and energy management, connectivity and infotainment, body and comfort conversion chain, comprising the generation, transmission, storage and use of electri­
electronics, safety and data security. Infineon is the world market leader in semicon- city. The product portfolio comprises mainly IGBT power transistors and the driver
ductor solutions for cars. Our range of products and solutions helps to navigate the ICs to control them, as well as power semiconductors based on SiC. We offer products
transition from internal combustion engines to hybrid and electric drives, enabling in the Green Industrial Power segment, whether Si-based or SiC-based, in various
an ever-increasing degree of automated driving, electric-electronic (E/E) vehicle form factors and with different levels of functionality. The segment’s broad application
architecture, greater connectivity and digitization, and a higher level of data security spectrum includes motor control units for industrial manufacturing and building
in vehicles. We also offer our customers innovative solutions in the areas of safety, technology, inverters for photovoltaic and wind power systems, major home appliances,
digital cockpit, infotainment, comfort and lighting technology. In addition to sensors, traction, electric utility vehicles (such as buses and construction and agricultural
microcontrollers, software solutions, a reliable power supply, memories for specific vehicles), systems for high-voltage direct current transmission and energy storage,
applications and power semiconductors based on Si and SiC, our product portfolio industrial power supplies and the charging infrastructure for electric vehicles.
also comprises components for human-machine interaction and vehicle connectivity.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 26
Business model
The segments

PSS Power & Sensor Systems CSS Connected Secure Systems

The Power & Sensor Systems segment encompasses a wide selection of technologies The Connected Secure Systems segment supplies comprehensive systems for a
relating to power semiconductors, radio frequency and sensors. We use these tech- secure, connected world based on reliable, game-changing microcontrollers and
nologies to make electronic devices like power supplies, power tools, lighting systems, wireless connectivity and security solutions. In particular, we offer microcontroller
mobile devices and industrial and consumer applications smaller, lighter and more solutions, Wi-Fi and Bluetooth solutions and combined connectivity solutions
energy-efficient, as well as to develop new functionalities. We are drawing on the (known as combo chips), along with hardware-based security technologies and an
next generation of new, innovative solutions based on Si, SiC and GaN for applications efficient software environment for the programming and configuration of the micro-
in the areas of 5G, data centers, power supplies and adapters, battery-powered devices, controllers and connectivity components that cover many application areas. These
and renewable energy. Our portfolio of products for power supplies, comprising con- include devices for IoT applications, connected home appliances and smart home
trol ICs, drivers and MOSFET power transistors, addresses the two key requirements appliances, IT equipment, consumer electronics, cloud security and connected vehicles,
of the market: efficiency and power density. Infineon is the clear market leader in as well as credit and debit cards, electronic passports and national identity cards.
the global Si MOSFET market. Our high-precision sensor solutions give IoT devices With our technologies in the areas of computing, connectivity and security, we are
“human senses”, enabling them to react intuitively to their surroundings. The port­ contributing significantly towards ensuring that current and future connected systems
folio is rounded off with USB controllers and radio frequency products such as RF are reliably protected.
antenna switches, RF power transistors and low-noise amplifiers.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 27
Group strategy
Long-term growth trends | Strategic targets

Group strategy
Long-term growth trends Infineon sees itself as a trailblazer for a carbon-neutral and digital future: “Driving
decarbonization and digitalization. Together.” This applies to large parts of our
As a leading global provider of semiconductor solutions, Infineon focuses its business ­portfolio. Sensors record mostly analog information from the world around us and
activities on two issues that are fundamental to society and where it sees major long- transform it into digital data; microcontrollers process these data and generate
term growth trends: decarbonization and digitalization. ­control s­ ignals; memory ICs enable the microcontrollers to store data and program
codes; actuators such as power semiconductors convert the control signals into actions
and make the efficient generation and conversion of energy possible; security solu-
Decarbonization tions protect the integrity of devices and data, while connectivity chips transfer these
data within the digital world. Software enhances the benefit to customers of our semi­
Decarbonization is a necessity to contain global warming and therefore the key respon­ conductor solutions, allowing for more flexible adjustment. We thereby establish a link
sibility of humanity over the next decades. We will need to make drastic changes to between the real world and the digital world and enable a carbon-neutral future.
the ways in which we generate, transport, store and use energy. To halt global warm-
ing, it is imperative that we waive the use of fossil fuels to a great extent and that we
make a consistent transition to renewables and widely adopt electrification. Effecting Strategic targets
this transition requires not only the use of wind and solar power but also of systems
for the storage and efficient transportation of energy. We believe that one of the key To generate value from decarbonization and digitalization for our customers, the
tasks for Infineon is to provide semiconductor solutions for more efficient generation, company, our shareholders and society with our semiconductor solutions, we pursue
conversion and use of electric energy. Our business operations are thereby making a clear and m
­ easurable strategic targets.
significant contribution to the quality of life of generations to come.

Profitable growth
Digitalization
We want to continue to grow in the markets in which we operate and to increase our
Digitalization is another key trend. This involves connectivity between ever-smarter profitability. Our long-term financial targets reflect this aspiration and apply over the
devices with an ability to perceive their environment; devices that make life easier, semiconductor cycle. At the beginning of the 2023 fiscal year, we revised our target
safer and more pleasant. The possibilities are huge: greater convenience and security operating model and significantly raised our long-term financial targets. This reflects
in the smart home, more efficiency in manufacturing, higher productivity together Infineon’s success over the past few years and, at the same time, is an expression
with better environmental sustainability in farming, and new services to support older of our greater ambitions, especially with regard to profitability and value generation.
people. Infineon’s products in these areas include microcontrollers with software We want to create even more value by focusing consistently on the long-term growth
and sensors that make it possible to produce connected and smart IoT devices with trends of decarbonization and digitalization and implementing our strategic guidelines
increasing performance in both the industrial sector and the end user sector. (see the chapter “Strategic guidelines”, p. 29 ff.).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 28
Group strategy
Strategic targets

Target 1: Average annual revenue growth of Target 3: Adjusted Free Cash Flow within a range of
more than 10 percent over the cycle 10 to 15 percent of revenue over the cycle
We hold leading positions in our core markets and have expanded systematically Looking at value generation, we include a Free Cash Flow target in our target operating
over the years into new and adjacent markets. Our four segments focus on the model. Free Cash Flow, adjusted for large investments in frontend buildings as well
­long-term growth trends of decarbonization and digitalization. With our strategic as large M&A transactions (acquisitions and disposals), should fall within a range of
approach “Product to System”, we use our extensive technological and product 10 to 15 percent of revenue over the cycle. This will be achieved by ensuring our oper-
expertise to provide more comprehensive solutions and thus create more value for ating cash flow grows at a faster rate in the long term than our investment expenditure.
our customers. In the areas of electromobility, advanced driver assistance systems
(ADAS), renewable energy, data center/AI and IoT in particular, we expect to achieve
above-average growth, resulting in total average annual revenue growth for the Capital structure targets
Group over the cycle of more than 10 percent (“>10%”).
Our capital structure targets link together the concepts of environmental and economic
Target 2: Average Segment Result Margin of sustainability and ensure that Infineon remains a trusted partner in the long term.
25 percent over the cycle An investment grade rating is the key element of Infineon’s conservative financial
A key criterion for our success is sustainable profitability. Infineon can consistently pur- policy. From this cornerstone, we derive our long-term capital structure targets, which
sue its targets even in weaker market phases by engaging in economic activity that consist of a liquidity target and a leverage target.
is sustainably profitable. We have set ourselves the target of achieving an average
Segment Result Margin of 25 percent over the cycle. Key elements that will enable Our liquidity target is €1 billion, plus at least 10 percent of revenue. The fixed base
us to achieve our profitability target are our system solutions, which are based on our amount of €1 billion provides a solid liquidity reserve for contingent liabilities and
strategic approach “Product to System”, and generate higher value and greater cus- pension liabilities, which are unrelated to revenue. The additional amount of at least
tomer benefit. In the future, software will play a larger role. We enjoy economies of scale 10 percent of revenue means that we always have access to sufficient cash to be
and cost advantages while continuing to develop our leading market position and able to finance our operating business and investment throughout all phases of the
innovative manufacturing technologies (such as those used to produce 300-millimeter semiconductor cycle.
thin wafers) and accelerating the expansion of silicon carbide manufacturing facili-
ties. At the same time, we make sure that, if we consider our overall portfolio, all our Our leverage target is expressed as an upper limit on gross financial debt of two times
businesses are making an adequate contribution to Infineon’s success. We also aim EBITDA. Infineon defines EBITDA as earnings from continuing operations before inter-
to ensure that our research and development expenses as well as our selling, general est, taxes, depreciation and amortization.
and administrative expenses increase at a slower rate than the rate of growth in our
revenue. This is supported by our digitalization strategy.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 29
Group strategy
Strategic targets | Strategic guidelines

Sustainable corporate governance Strategic guidelines

We are convinced that economic success must go hand in hand with environmental To achieve our strategic targets, we rely on a number of strategic guidelines to ensure
and social commitment. This includes contributing towards more sustainable devel- sustainable corporate governance and profitable growth.
opment in society. With our products, solutions and systems, we are enabling greater
efficiency and making an active contribution towards climate protection. Sustain­
ability is of crucial importance both within the Group and in relation to our supply “Product to System” (P2S) and software
chains. We manage Infineon sustainably and are committed to acting sustainably
for the benefit of society. Making a contribution towards containing global warming With our approach “Product to System” (P2S), we are fostering our leading positions
forms part of our mission. We have therefore set ourselves the target of becoming in the area of power systems and IoT. P2S helps us to better adapt our solutions and
carbon-neutral by the end of the 2030 fiscal year; by 2025, our emissions are to be products to customer requirements. We understand new trends early on and can
reduced by 70 percent compared with 2019. This target relates to Infineon’s own develop innovative approaches together with our customers. As a result, our custom-
greenhouse gas footprint and includes not only all direct emissions but also indirect ers can realize sustainable benefits, among others, in terms of systems performance,
emissions from electricity and heat. Already by the end of the 2023 fiscal year, our system costs and development time.
scope 1 and scope 2 emissions were 56.8 percent below the emissions for the base
year 2019. The development of intelligent exhaust air abatement systems, the For this to succeed, we have to understand the environment in which our customers’
­purchase of electricity from renewable sources and the implementation of energy products are used, how these products are embedded in larger systems, with which
efficiency schemes have all contributed to this reduction. other devices the products interact, what requirements they have to fulfill and what
function they are intended to perform. We also have to consider which other active
Our other sustainability activities are described in the separate report “Sustainability and passive components and control concepts they use and what capabilities our custo­
at Infineon”. This report, including the summarized separate Non-Financial Report, mers themselves contribute to the value creation process. Equipped with this know­
which is based on the requirements set out in the German CSR Directive Implementa- ledge, we can make the most of our competencies. We want to translate the technolo­
tion Act, can be downloaded from the internet at www.infineon.com/csr_reporting. gically possible into marketable products that provide the greatest possible benefit
to our customers. This helps us to continue to develop leading positions in our markets.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 30
Group strategy
Strategic guidelines

In the context of P2S, software is playing an increasingly significant role. We have From a technological perspective, compound semiconductors are of particular impor-
intensified our activities in this area in recent years through our own organic growth tance. Whereas most semiconductor components to date have been based on pure
and strategic partnerships, as well as through the acquisitions of Cypress, Industrial silicon, silicon carbide and gallium nitride are two chemical compounds with physical
Analytics and Imagimob. This means that we have at our disposal an entire ecosystem properties, in particular a wide band gap, that make it possible to produce semi­
comprising software components and a development environment, as well as refer- conductors with even greater performance. These compounds allow for particularly
ence designs, product support, blogs, a developer community and online tutorials. efficient electric switches in the smallest space; for example, they make efficient charg­
An important element of this ecosystem is the ModusToolbox™ development environ- ing stations for electric vehicles much more compact, allowing them to be installed
ment. This includes reusable firmware that makes it easier for customers’ developers in more places. We consider a strong position in compound semiconductors essential
to program microcontrollers and Wi-Fi and Bluetooth components. With software, to reinforcing our leading position in power semiconductors and, thereby, in power
we enable smaller customers in particular to make even better use of our products systems. The acquisition of GaN Systems Inc., which was successfully completed after
and thus increase our profitability. the end of the past financial year on 24 October 2023, will make a significant contri-
bution to this. The Ottawa (Canada)-based company contributes a broad portfolio of
GaN-based energy conversion solutions and first-class application expertise.
Technology leadership and customer-focused
innovation Value creation through differentiating in-house
In accordance with our strategic approach of thinking in application trends, our manufacturing and high quality
developers identify challenges early, together with our customers. This enables us to
fulfill the promise of technological leadership. Through close cooperation, we learn We are continuing to expand our in-house manufacturing in areas in which we create
to understand applications better, allowing us to identify future trends at an early added value for the customer and differentiation for Infineon. Thus, we manufacture
stage and develop products that are tailored accordingly. In this way, we can offer products in our own fabs when doing so means that our customers benefit from lower
­our customers either individual components or complete solutions, including the cost, higher performance or improved availability. This has been the case until now,
necessary software, depending on their requirements. for example, for power semiconductors and sensors. Customers are increasingly recog­
nizing the competitive advantage offered by our in-house manufacturing by entering
We are continuing to enhance our leading technological position and expertise in our into long-term supply contracts and capacity reservation arrangements. Some cus-
core markets through radical and customer-focused innovation. As a result, we are tomers make multi-year advance payments that support the cashflow during times of
strengthening our core business and identifying long-term growth opportunities in investments to expand production capacity. However, where manufacturing in our
adjacent business areas. As one of the market leaders in the field of power electronics, own fabs offers no additional customer benefit or opportunity to differentiate our-
we began researching new materials such as silicon carbide and gallium nitride at an selves from the compe­tition, we work together with contract manufacturers. This is
early stage, building up our expertise, and we are constantly broadening our product predominantly the case for highly integrated digital products such as microcontrollers,
portfolio in order to generate added value for our customers. connectivity components and security ICs, where the differentiation arises mainly

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 31
Group strategy
Strategic guidelines

from the design and the ­software. To ensure and improve our delivery capability, even Our supply chains and our production are both particularly resilient. Our manufacturing
in times of scarce pro­duc­tion capacity in standard technologies, we have signed sup- facilities are spread across all major regions of the world, and our contract manufac-
ply agreements with our contract manufacturers, sometimes covering a period of turer and supplier base is broadly diversified. The investment in a production company
several years. in Germany (European Semiconductor Manufacturing Company, ESMC), which will
be founded under the leadership of TSMC (Taiwan Semiconductor Manufacturing
Our 300-millimeter thin wafer manufacturing technology for power semiconductors Company) and in which Infineon will hold a 10 percent stake, will play an important
is a clear indication of the value of differentiating manufacturing in our own fabs: role in the geographical diversification of the supply chains.
As pioneers of this technology, the scale of manufacturing we have now reached
allows us to achieve significant economies of scale. Compared with manufacturing High quality and reliability are key values for us, differentiating us from our competitors.
on 200-millimeter wafers, we benefit from significantly lower costs and lower Therefore, quality plays a key role in the lifecycle of an Infineon product – from its
­capital investment. This has enabled us to maintain our lead: With the factory at development and production to its supply and product-related services. Infineon is
the ­Villach site (Austria), together with our 300-millimeter manufacturing facility certified worldwide in accordance with the leading quality standards and has an
in Dresden (Germany), we have established a closely coordinated manufacturing ­efficient management system.
­network across the two sites. In line with our “One Virtual Fab” concept, we are
using the same processes, equipment, and automation and digitalization concepts In addition, clearly defined quality principles provide guidance for our employees.
in Villach and in Dresden. This generates economies of scale, but it also benefits These principles have the overriding aim of honoring the pledges we have made
the customer, as we have the flexibility to shift production volumes between the to our customers relating, among other things, to product functionality and reliabil-
sites. We are applying a similar concept in the area of compound semiconductors ity. To achieve this, we attach great importance to understanding our customers’
between our sites in Villach and Kulim (Malaysia). The third module under construc- ­concerns and clearly defining their product requirements. Honoring our pledges is
tion in Kulim is also able to generate synergies with the existing 200-millimeter pro- an essential guiding principle that is also reflected in the in-house cooperation we
duction infrastructure. see at Infineon.

Expanding our capacity in line with expected market trends over the cycle has proved Tried-and-tested processes, methods and tools, together with continuous improve-
very effective and forward-thinking. For this reason, we have now decided to extend ment programs, form the basis for the high priority Infineon attaches to quality.
the third module significantly beyond its original specifications, creating the world’s Our quality departments are embedded in the global organization. Regular events
largest and most competitive manufacturing facility for silicon carbide semiconductors, such as Quality Days at our global sites promote a greater awareness of quality,
reflected in a particularly efficient production landscape and substantial economies with the result that all Infineon employees are responsible for honoring our quality
of scale. We are also expanding our site in Dresden as planned to include an additional pledge within their own sphere of responsibility.
300-millimeter module for analog mixed-signal products as well as power semicon-
ductors. These can be used in a wide variety of applications, such as data centers,
auto­motive and IoT. The new factory combines the two growth areas, decarbonization
and digitali­zation, and is designed to meet demand from our customers in the second
half of the decade.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 32
Group strategy
Strategic guidelines

Portfolio management and inorganic growth The accompanying software products and digital services are increasingly being pro-
vided using appropriate licensing models via our digital customer interfaces, such
We conduct regular reviews to ascertain whether our operations, both individually and as the Infineon Developer Center. A major focus is on scaling up technical support, so
as part of our overall portfolio, make an appropriate contribution to the success of that, even in fragmented markets, we can provide support to customers during their
Infineon. This enables us to target the use of our financial resources and, as a result, product choice and design-in. The Infineon Developer Community offers round-the-clock
to continue to improve our profitable growth. We consider individual operations technical support to all customers and continues to expand and improve by learning
from various points of view, such as value creation, current and expected market posi- from customer queries and customer experience. With the specific usage of AI-based
tion, significance to the customer and risk assessment. On this basis, we decide the methods, we enable even better support for our customers through the use of power-
extent to which we will invest in or divest an operation. Growth prospects and prof­ ful generative language models. This makes access to our resources faster and easier.
itabil­ity are mutually dependent here, with profitability enabling investment and We will therefore continue to expand the AI-based portion in the next few years. This
ensuring sustainable innovation and growth as a result. is a particularly efficient way for us to ensure that customers use our products and,
indeed, use them in a more effective and targeted way.
We will continue to supplement our organic growth in the future with selective acquisi-
tions. These acquisitions will need to fulfill three criteria: a) be strategically beneficial As a user, we also use digitization to optimize our internal processes and make them
based on the portfolio process, b) be financially advantageous and c) be a good cultural as efficient and future-proof as possible. So, for example, we connect our sites and
fit. A purchase must strengthen Infineon’s market position in accordance with our contract manufacturers in accordance with Industry 4.0 in a virtual manufacturing net­
strategic focus, usefully complementing our range of competencies. The corporate work. In sales and marketing, we use applications based on methods for analyzing
culture of any potential acquisition must be a good fit with Infineon’s culture or must big data that enable us to provide our customers with targeted personal and increas-
add valuable elements. ingly customized support via our digital platforms. In addition, we evaluate customer
behavior and customer requirements in a structured way and incorporate these results
into the development of our solutions and products. In manufacturing, we are focus-
A pioneer of digitalization ing to a greater extent on a high level of automation and the increasing use of artificial
intelligence methods in order to continue to improve our productivity and quality. In
An important topic for us is Infineon’s digital transformation, which we are driving all of these areas, we systematically analyze which processes can be further improved
forward using a strategic roadmap. As a global semiconductor manufacturer, we and optimized through the use of generative AI language models.
­benefit from the digital transformation in two ways: on the one hand, as a provider
and, on the other, as a user of digital solutions. As a provider, we use digitization As part of our digital roadmap, we are focusing on the rapid implementation of
and efficient platforms to support our customers in the best possible way throughout ­projects. When selecting projects, we are guided by the direct value contribution to
the customer relationship and the development process. We are constantly optimiz- improving the customer experience through efficiency or productivity gains and
ing and expanding our website and web content, and it is important for us that all by their function as the necessary basis for future digitization initiatives.
product-related information and support services are easily accessible.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 33
Group strategy
Human resources strategy

Human resources strategy

Our human resources (HR) strategy is a key component of Infineon’s success. It sup-
ports us in our efforts to achieve our growth and profitability targets and enables us to
successfully navigate our way through varying economic phases and challenges. Our
HR understanding is “People create value. Engagement drives people”. Our overriding
objective is to foster our employees’ engagement and to take targeted measures to
achieve this. When employees are enthusiastic about their job, have the relevant skill
sets, and can take advantage of suitable opportunities for continuing professional
development, the outcome is a higher level of creativity, productivity and innovation,
as well as better results. We use regular pulse checks of our employees worldwide
to measure their level of engagement and thus keep our finger on the pulse of their
needs, enabling Infineon to make continuous progress.

We consider it our responsibility to contribute to addressing the key societal challenges.

Decarbonization and digitalization are having an impact not only on our world but
also on the future of work. From this, we derive the key action areas of our HR strategy.
Our main focus is on

1) attracting the best talent in the market, optimizing the onboarding process,
­developing internal talent and keeping it loyal to Infineon,
2) continuing to drive digitalization and standardization forward in HR and
positioning ourselves in a scalable way to support Infineon’s growth,
3) strengthening hybrid working where possible and practical,
4) pushing ahead with leadership development programs as well as employee
training and skill enhancement, and People are the main focus of our activities, as dedicated, healthy, successful employees
5) strengthening the area of organizational development in order to be prepared are key to maintaining and improving our market-leading position, thereby creating a
for further growth and to promote the desired internal cultural change (SPIRIT). successful future for us all.

Further information, including detailed statistics, is available in the HR Report 2023

and the 2023 Sustainability Report.
 www.infineon.com/hrreport
www.infineon.com/csr_reporting

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 34
Research and development

Research and
development

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 35
Research and development

Research and development expenses were €1,985 million in the 2023 fiscal year,
C03 R&D expenses
­compared with €1,798 million in the previous year. This increase of €187 million, or
€ in millions
10 percent, was less than the increase in revenue. Accordingly we invested 12.2 percent
of revenue in research and development in the 2023 fiscal year, compared with 1,985
1,798
12.6 percent in the previous year. Capitalized development costs in the 2023 fiscal year
were €214 million (previous year: €209 million). The amortization of capitalized devel­
opment costs in the 2023 fiscal year was €93 million (previous year: €94 million). Sub- 12.6% 12.2%
R&D expenses
sidies and grants received for research and development increased from €113 million
Percentage of revenue
in the 2022 fiscal year to €130 million in the 2023 fiscal year.
2022 2023

At the end of the 2023 fiscal year, Infineon employed 12,830 people (22 percent of the
total workforce) in research and development worldwide. Of these, 1,645 worked on Artificial intelligence (AI) methods are being used in a wide variety of applications
software. At the end of the 2022 fiscal year, 12,005 people were employed by Infineon to improve products and processes. In the field of edge computing, for example,
in research and development worldwide (21 percent of the workforce). The number of AI is used in combination with our smart sensors and microcontrollers to classify
research and development sites in the 2023 fiscal year was 69 (2022: 64) in 25 countries. tone, key words or gestures to enable the adoption of new and innovative approaches
in human-machine communication. In addition, AI supports many processes such
Infineon’s research and development activities are in accord with its strategy of con- as chip design, marketing and production.
tinuing to strengthen its leading technological position through customer-focused
innovation. Research and development activities therefore concentrate on continuing We are also addressing longer-term future-related topics in areas such as quantum
to improve our power semiconductors, with a particular focus on the use of new computing and post-quantum cryptography.
materials such as silicon carbide and gallium nitride. Important development goals
are to improve efficiency and increase power density while at the same time main-
taining a high level of reliability. Patents
Research and development activities are also focused on the digitization of products Another indication of Infineon’s innovative power and long-term competitiveness is
and solutions as an essential prerequisite for the implementation of our P2S strate- the number of our patents. In the 2023 fiscal year, we applied for around 1,850 patents
gic approach. The opportunity to offer customers all-in-one solutions is particularly worldwide (previous year: around 1,700). In addition to patent applications and
impor­tant and provides them with benefits in terms of system performance, system ­expirations, there were changes in the portfolio due to regular strategic patent port-
costs and development time. The main development fields here are microcontrollers, folio adjustments. Maintenance of the patent portfolio is carried out on a regular
connectivity and security solutions, and software. basis. This has resulted, along with new patent applications for inventions, in a signi­f­
icant increase in the relevance of the patents, as highlighted again by LexisNexis®
and Clarivate® in their innovation reports. At the end of the 2023 fiscal year, the world­
wide patent portfolio comprised around 29,700 patents and patent applications
(previous year: around 29,600).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 36
Research and development

R&D sites and application centers

5
20
4
20 19
16 3
11 19 29 30 24
14 15 16 11 8 21
3 12 13
9 9 10 15
31
6 12 7 14
10 17 3 27
16 18
15 1 25 17 18
12 13 14
7 2 17
6 4
5
8 23 22
13 4 28 26
2
1 11 9

1
8
6
5
21 7
10 2

Americas Europe, Middle East, Africa Asia-Pacific

Mexico USA Austria 12 Langen Netherlands India Philippines Taiwan
1 Guadalajara 3 Andover, MA 1 Graz 13 Neubiberg 24 Nijmegen 1 Bangalore 9 Muntinlupa 17 Hsinchu
2 Tijuana 4 Austin, TX 2 Klagenfurt 14 Regensburg 18 Taipeh
Romania Indonesia Singapore
5 Chandler, AZ 3 Linz 15 Soest
6 Colorado Springs, CO 4 Villach 16 Warstein
25 Braşov 2 Batam 10 Singapore Japan
26 Bucharest
7 El Segundo, CA Korea Thailand 19 Nagoya
Denmark Hungary 27 Iaşi
8 Irvine, CA 3 Cheonan 11 Nonthaburi 20 Sendai
5 Herlev 17 Budapest
9 Leominster, MA Serbia 4 Seoul 21 Tokyo
18 Cegléd
10 Lexington, KY France 28 Belgrad Greater China
11 Lynnwood, WA Malaysia
6 Le Puy-Sainte- Ireland
12 Morrisville, NC UK 5 Ipoh Mainland China
Réparade 19 Cork
13 Murrieta, CA 29 Bristol 6 Kulim 12 Chengdu
20 Dublin
14 Portland, OR Germany 30 Redhill 7 Melaka 13 Shanghai
15 San Diego, CA 7 Augsburg Israel 8 Penang 14 Shenzhen
Ukraine
16 San José, CA 8 Dresden 21 Netanya 15 Wuxi
31 Lviv
17 Warwick, RI 9 Duisburg 16 Xi’an
Italy
10 Erlangen
22 Padua
11 Ilmenau
23 Pavia

Sites > 10 employees.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 37
Internal management system

Internal management system

The internal management system at Infineon is designed to help implement Group As part of the process of managing business performance, management also attaches
strategy and the related long-term financial targets. Accordingly, performance indica- great importance to ensuring that Infineon acts in strict compliance with legal require­
tors are used that enable profitable growth and efficient employment of capital to ments and that it also complies with its internal corporate governance standards (see
be measured. the chapter “Corporate Governance”, p. 82 ff.).

Overall, the achievement of our long-term financial targets will lead to a sustainable
increase in the value of Infineon by generating a permanent premium on the cost Performance indicators
of capital.
Principal performance indicators
In this context, growth, profitability, liquidity and investments are all interdependent. In order to measure its success in implementing its strategy, Infineon uses the follow-
Profitability is the prerequisite for being able to finance operations internally, which, ing three principal performance indicators:
in other words, means opening up potential opportunities for growth. Growth, in turn,
requires continual investment in research and development as well as manufactur- ›  egment Result Margin/Segment Result,
S
ing capacities. Growing at a commensurate rate enables Infineon to achieve leading › Free Cash Flow from continuing operations, and
market positions and generate economies of scale that contribute to greater profit- › Return on Capital Employed (RoCE).
ability. Employing financial resources efficiently is a critical factor in achieving these
goals. These financial performance indicators are also the cornerstones of the system for vari-
able remuneration. Most of the variable salary components pertaining to employees
Infineon deploys a comprehensive controlling system to manage its business with and management are directly linked to these performance indicators.
respect to the strategic targets it has set itself. The system involves the use of financial
and operating performance indicators. Information for controlling purposes is derived Segment Result Margin/Segment Result
from annual long-term planning, quarterly outlooks, actual monthly data and infor- Segment Result Margin/Segment Result is the key figure used by the Group to measure
mation available with even greater frequency, such as the volume of orders received. operating performance (for an analysis of the development of the Segment Result
This knowledge enables management to base its decisions in a timely manner on Margin/Segment Result of Infineon and of the individual segments in the 2023 fiscal
sound information about the current situation and future expected financial and year, see the chapter “2023 fiscal year” p. 42 ff.). The Segment Result Margin is the
operational developments. Segment Result expressed as a percentage of revenue and is a measure of the profit-
ability of revenue and the success of Infineon’s operating business. The activities
Sustainable business practices and the consideration of forward-thinking qualitative of the segments are managed on the basis of the Segment Result Margin/Segment
factors are important for Infineon’s long-term success. As an enterprise very much aware Result. Responsibility for optimizing the Segment Result Margin/Segment Result
of its responsibilities towards society, Infineon also takes account of non-financial within the framework of the Group strategy (as approved by the Management Board)
factors, mainly in relation to the environment and employee diversity. See the report rests with the management teams of the relevant segments, acting, however, in
“Sustainability at Infineon” on our website www.infineon.com/csr_reporting close coordination with the Management Board.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 38
Internal management system

Segment Result is defined as follows: Return on Capital Employed (RoCE)

The performance indicator RoCE measures the return on capital and shows the corre­
Operating profit, adjusted for: la­­tion between profitability and the capital resources required to run the business
Certain reversal of impairments (impairments) (in particular on goodwill) (for the mathematical derivation and development of RoCE in the 2023 fiscal year, see
Gains (losses) on earnings of restructuring and closures the chapter “Review of financial condition”, p. 54). RoCE describes how efficiently
Share-based payment a company uses its resources and, through the comparison with cost of capital, serves
Acquisition-related depreciation/amortization and other expenses as an instrument for value-based corporate management. It is also analyzed by Infineon
Gains (losses) on sales of businesses, or interests in subsidiaries at Group level only and not at segment level.
Other income and expenses
= Segment Result RoCE is defined as follows:

Free Cash Flow Operating profit, plus/minus:

Free Cash Flow measures the ability to generate sufficient cash flows to finance day-to-­ Financial result excluding interest result
day operations and to fund required investments out of the ongoing business. It is Share of profit (loss) of associates and joint ventures accounted for using the equity method
Infineon’s stated target to sustainably generate positive Free Cash Flow (for an expla- Income taxes
nation of changes in Free Cash Flow during the 2023 fiscal year, see the chapter = Operating profit from continuing operations after tax 1
“Review of liquidity”, p. 55 f.). Free Cash Flow is managed by Infineon at Group level
only and not at segment level. Assets, plus/minus:
– Cash and cash equivalents
The main factors influencing Free Cash Flow are a positive earnings trend combined – Financial investments
with effective management of inventories, trade accounts receivable and payable, – Assets classified as held for sale
and capital expenditures. – Total current liabilities
+ Short-term financial debt and current maturities of long-term financial debt
Free Cash Flow at Infineon is defined as follows: + Liabilities classified as held for sale
= Capital employed 2
Cash flows from operating activities from continuing operations
+ Cash flows from investing activities from continuing operations RoCE 1 / 2
+ Purchases of (proceeds from sales of) financial investments, net
= Free Cash Flow

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 39
Internal management system

Selected supplementary performance indicators For an analysis of changes in these performance indicators during the 2023 fiscal
The principal performance indicators are supplemented by the following additional year, see the chapter “Review of liquidity”. p. 55 ff.
performance indicators.
Non-financial performance indicators
Growth and profitability indicators Non-financial performance indicators at Infineon include CO2 emissions and indicators
Since the three principal performance indicators, especially Segment Result/Segment relating to diversity.
Result Margin, positively correlate with revenue growth, the latter is not used as a
principal performance indicator in its own right but is covered by the three performance Already at the 2020 Annual General Meeting, Infineon announced that it wanted to
indicators indirectly. become carbon-neutral by 2030. By 2025, Infineon would like to reduce its CO2 emis-
sions by 70 percent compared to the 2019 calendar year.
In order to analyze operating profitability in detail, the result and cost block compo-
nents of the Segment Result are considered. These are gross profit, research and The degree of target achievement for these non-financial performance indicators
development expenses, and selling, general and administrative expenses, as well as is also reflected in the remuneration of the Management Board (see the chapter
their relation to revenue. “Remuneration Report”, p. 86).

These indicators are analyzed both at Group level and at segment level (for changes Actual and target values for performance indicators
in these indicators for the Group in the 2023 fiscal year, see the chapter “Review of The chapter “Outlook”, p. 62, contains a table comparing the actual values achieved
results of operations”, p. 49 ff.). in the 2023 fiscal year for principal and selected supplementary performance indicators
with the values forecasted and the expectations for the 2024 fiscal year.
Liquidity performance indicators
A rolling cash flow forecast helps ensure that Infineon has appropriate levels of liquidity
at its disposal and an optimal capital structure. Liquidity is managed only at Group
level, and not at segment level, using the following performance indicators:

›  ross cash position: Cash and cash equivalents plus financial investments
G
› Net cash position: Gross cash position less short-term and long-term financial debt
› Investments: The total amount invested in property, plant and equipment and in
other intangible assets, including capitalized development costs

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 40
Review of the semiconductor industry

Review of the
semiconductor
industry

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 41
Review of the semiconductor industry

Review of the global economy in the Revenue in Infineon’s reference market (i.e., the market for semiconductors exclud-
2022 and 2023 calendar year ing DRAM and NAND flash memory chips and microprocessors) was €364 billion in
the 2023 fiscal year, 1 percent less compared with €367 billion in the 2022 fiscal year.
Following exceptionally strong growth in the global economy in the 2021 calendar Expressed in US dollars, the decrease was 2 percent ( R02). The relatively steady
year in the wake of the post-Covid recovery, growth returned to a more normal level performance in the Infineon reference market was primarily due to the automotive
in the 2022 calendar year of 3.0 percent ( R01). and industrial market segments, in which growth was driven by the decarbonization
and digitalization trends. Semiconductor content in vehicles increased, partly as a
For the 2023 calendar year, experts at the International Monetary Fund (IMF) expect a result of growing demand for electric vehicles, comfort features and efficient driver
global economic growth of 2.5 percent ( R01). This would mean growth in the 2023 assistance systems. Growing demand for semiconductors was also evident again in
calendar year would be slightly below the long-term growth trend. The reasons for this the renewable energy sector ( R03).
include the impact of the energy crisis, high rates of inflation, sharp increases in inter-
est rates, a drop in consumer and business confidence, and the unexpectedly slow
recovery of the Chinese economy after the removal of pandemic-related restrictions. Market position
The growth figures relate to market size, translated into US dollars at market In the 2022 calendar year, Infineon was ranked in 13th place in the global semiconduc-
exchange rates. tor market, with a market share of 2.6 percent. In the Infineon reference market,
Infineon ranked in seventh place worldwide in the 2022 calendar year, with a market
share of 4.0 percent. This puts Infineon in second place among European semicon-
Review of the semiconductor market ductor manufacturers in both markets ( R04).
in the 2023 fiscal year In the first nine months of the 2023 fiscal year, Infineon achieved a market share of
Worldwide semiconductor revenue totaled €480 billion in the 2023 fiscal year. This was 3.4 percent in the global semiconductor market and was ranked in 11th place. In the
13 percent lower than the figure for the 2022 fiscal year of €550 billion. Expressed in Infineon reference market, Infineon achieved a market share of 4.7 percent in the
US dollars, the decrease was 14 percent ( R02). This was mainly due to the significant first nine months of the 2023 fiscal year and was ranked in sixth place. In the first nine
fall in demand in the computing, smartphone and consumer market segments, with months of the fiscal year, Infineon was ranked in second place among European
a double-digit contraction in revenue in some areas ( R03). semiconductor manufacturers in both markets ( R04). Data for the full 2023 fiscal
year was not yet available at the time this report was prepared.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 42
2023 fiscal year
Group performance

2023 fiscal year

Group
performance

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 43
2023 fiscal year
Group performance

In the 2023 fiscal year, Infineon has set new records for revenue and profitability. The Group revenue up by 15 percent
results are an initial confirmation of our more ambitious course we embarked on as a
company a year ago. Nevertheless, we find ourselves in an environment that continues Infineon generated Group revenue of €16,309 million in the 2023 fiscal year, a 15 percent
to present challenges. We are seeing different trends in our target markets. Structural increase on the previous year’s figure of €14,218 million. Around half the growth in
semiconductor growth in the areas of renewable energy, electromobility (especially revenue was due to price increases and around half to higher volumes and product mix
in China) and microcontrollers for the automotive industry remains unabated. In con- adjustments. Continuing high levels of demand for semiconductors in the automotive
trast, consumer, communication, computing and IoT applications are experiencing and renewable energy sectors, in particular, had a positive impact here. At the same
a temporary period of low demand. Details about the performance of the segments time, manufacturing capacity is continually being expanded. This was also the case
can be found in the chapter “Segment performance”. p. 44 ff. in the 2023 fiscal year at our sites in Villach (Austria), Dresden (Germany) and Kulim
(Malaysia). Production corridors of contract manufacturers also contributed to the
increase in revenue.In addition, there were positive exchange rate effects during
the reporting period.

Segment Result Margin of 27.0 percent achieved

Infineon improved its Segment Result by 30 percent from €3,378 million in the 2022
fiscal year to €4,399 million in the 2023 fiscal year. The main reasons for this were
price increases, higher volumes and improvements in the product mix. Moreover,
operating expenses rose at a lower rate than revenue. This was offset by higher idle
costs and write-downs on increased inventories.

Taking all this into account, the Segment Result Margin of 27.0 percent was signifi-
cantly higher than the figure for the previous fiscal year of 23.8 percent.

Details about Infineon’s two other principal performance indicators, Free Cash Flow
and RoCE, and about its other performance indicators can be found in the chapters
“Review of results of operations”, p. 49 ff., “Review of financial condition”, p. 53 f.,
and “Review of liquidity”, p. 55 ff..

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 44
2023 fiscal year
Segment performance

ATV GIP PSS CSS

Segment
performance

Infineon | Annual Report 2023

 Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 45
2023 fiscal year
Segment performance

Review of the Automotive segment

ATV fuses and relays. With PROFET™, Infineon offers an extensive portfolio of smart semi-
in the 2023 fiscal year conductor switches. They enable decentralized configurable power distribution that
at the same time complies with the highest safety standard.
In the Automotive segment, Infineon generated revenue in the 2023 fiscal year of
€8,242 million, an increase of 26 percent compared with the figure for the previous Moreover, during the reporting period, there was a further increase in comfort fea-
fiscal year of €6,516 million. The segment contributed 51 percent of Infineon’s Group tures across all vehicle segments. Examples of these include retractable door handles,
revenue. electrically controlled seat adjustment, sun visors and tailgates. All these functions
require power switches, sometimes several per function, around a hundred on average
Electromobility, driver assistance systems, software-defined vehicle architecture and per vehicle. As Infineon has an extensive portfolio of semiconductor switches, it
the trend towards higher levels of electronic features in vehicles continued to be the achieved above-average growth in this area in the past fiscal year.
main drivers of our growth in the 2023 fiscal year. Electromobility benefited not only
from purchase incentive schemes but also from the increasing availability of charging Higher prices also contributed to the increase in revenue.
stations, the wider range of models being produced by almost all vehicle manufacturers
and a change in attitude in society towards sustainable mobility. We were able to win additional contracts worldwide for our microcontrollers and
power semiconductors, particularly for silicon carbide both in the power train and
Our business with microcontrollers developed particularly well. These include the onboard chargers as well as in DC-DC converters. We therefore anticipate achieving
AURIX™, TRAVEO™ and PSoC™ families. The transition to new vehicle architectures by significant increases in revenue in this area over the next few years.
many manufacturers, expanded driver assistance systems and the electrification of
vehicles ensured above-average demand. Our AURIX™ family was developed specifi- The Segment Result in the 2023 fiscal year was €2,380 million, an increase of 60 percent
cally for embedded control systems with the highest safety requirements and is there­ compared with the Segment Result for the previous fiscal year of €1,490 million. Based
fore used in addition to driver assistance systems for engine control, security and in on revenue, the Segment Result Margin was 28.9 percent (previous year: 22.9 perc­ent),
high-speed onboard networks. Real-time capability, high computing power and low see C04. The increase in the Segment Result Margin was mainly due to positive price
power consumption are the decisive characteristics. The TRAVEO™ family benefited effects, the higher level of revenue and improvements in the product mix.
from the trend towards digital instrument and display systems. In addition, the delivery
situation at our manufacturing partners continued to improve in the past financial
C04 Revenue and Segment Result of the Automotive segment
year, which also had a positive impact on sales development.
€ in millions

Infineon was also able to benefit from the fact that electromobility, automated driving 8,242

and mobility services are increasingly requiring more powerful software. This software 6,516

needs to be updatable throughout the lifecycle of the vehicle. This flexibility, as well 28.9%
22.9%
as higher safety requirements for automated driving, require a new architecture for 2,380
Revenue
Segment Result
onboard networks used for data transmission and power distribution. For the latter, in 1,490
Segment Result Margin
particular, special safety-certified semiconductor solutions are used, replacing existing
2022 2023

Infineon | Annual Report 2023

 Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 46
2023 fiscal year
Segment performance

Review of the Green Industrial Power segment

GIP Revenue in the fields of automation and electric drives benefited from demand in the
in the 2023 fiscal year area of factory equipment and automation.

In the Green Industrial Power segment, Infineon generated revenue in the 2023 fiscal Revenue in transportation grew strongly from a weak basis. Besides the recovery
year of €2,205 million, an increase of 23 percent compared with the figure for the in trains, new business areas such as the electrification of buses, trucks and farm
­previous fiscal year of €1,790 million. The revenue growth was the result of higher machinery contributed to the improved result.
volumes as well as positive price effects. The segment contributed 13 percent to
Infineon’s Group revenue. In home appliances, the revenue declined due to the weak construction activity in
China. The trend towards inverterized motor control systems continued but could not
Demand in the area of renewable energy remained high. The generation of clean energy compensate for the weak demand.
is an essential prerequisite for the achievement of global carbon emission targets.
Thanks to its strong market position in the area of renewable energy, Infineon was In the 2023 fiscal year, the Segment Result was €662 million, an increase of 72 percent
able to benefit directly from this megatrend. compared with the figure for the previous fiscal year of €384 million. As a result of the
growth in volumes and positive price effects, the Segment Result Margin improved from
There was an increase in revenue from products for wind power as well as from PV 21.5 percent in the 2022 fiscal year to 30.0 percent in the 2023 fiscal year, see C05 .
inverter products. In many regions of the world, solar and wind power are now the
cheapest way of generating electricity. Capacity is therefore being expanded accord-
C05 Revenue and Segment Result of the Green Industrial Power segment
ingly, especially in the form of utility-scale installations.
€ in millions
2,205
As the proportion of renewable energy in the energy mix continues to grow, so too
1,790
does the importance of storage solutions to stabilize the grids. The energy infrastruc-
30.0%
ture business comprises the transmission, distribution and storage of energy, as
21.5% Revenue
well as the charging infrastructure for electromobility and enjoyed strong demand. 662 Segment Result
384
Segment Result Margin

2022 2023

Infineon | Annual Report 2023

 Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 47
2023 fiscal year
Segment performance

Review of the Power & Sensor Systems segment

PSS Demand for products in the consumer market also remained weak in the 2023 fiscal
in the 2023 fiscal year year. Sales figures for consumer electronic devices of all types (e.g., smartphones, PCs,
laptops and notebooks, games consoles, as well as television) rose sharply during
In the Power & Sensor Systems segment, Infineon generated revenue in the 2023 fiscal the Covid pandemic before returning to more normal levels, which led to a decrease
year of €3,798 million, a decrease of 7 percent compared with the figure for the pre- in revenue in this area. Bucking the generally weak trend, interest in chargers, adapters
vious fiscal year of €4,070 million, see C06. In the first quarter of the fiscal year, weak and power supplies based on the new material GaN is continuing to grow. This led to
demand in the consumer business was still partially offset by increasing demand for an increase in revenue in this market segment, even if this was from a relatively low
semiconductors used in servers and industrial applications. In the following quarters, base. As a result of the acquisition of GaN Systems, the number of GaN specialists in
demand for semiconductors used in servers also declined significantly, following high our Group has virtually doubled. We are therefore now in a position to gain even faster
growth rates in previous years. Combined with continuing weak demand for semicon- access to the market of various GaN applications.
ductors for computers, consumer electronics and telecommunications infrastructure,
this led to a decrease in revenue in the 2023 fiscal year. The segment contributed Demand in our industrial business and for applications in the automotive sector
23 percent of Infineon’s Group revenue. ­continued on an upward trend. The growing number of electric vehicles being sold
resulted in steadily increasing demand for charging stations and onboard chargers.
In past years, there was significant growth in demand in the server market, mainly In addition, the number of vehicles with in-cabin USB-C ports for charging mobile
driven by high levels of investment from cloud computing service providers. However, devices is continuing to rise. Good revenue growth was also to be seen in the compo-
this growth slowed considerably in the course of the 2023 fiscal year. Furthermore, nents business for light electric vehicles such as eBikes, eScooters and forklift trucks.
investment in cloud servers was deferred, and more AI accelerators were ordered Demand for microinverters for roof-top solar systems remained steady, although it
instead. AI accelerators are special parts of servers that significantly accelerate artificial began to weaken towards the end of the fiscal year.
intelligence (AI) learning. In principle, this deferral should be seen as a positive devel-
opment for semiconductor demand, as the power supply of an AI accelerator processor
C06 Revenue and Segment Result of the Power & Sensor Systems segment
has a significantly higher semiconductor content than that required for the power
€ in millions
supply of a processor for standard servers. The increase in demand for semiconductors
for AI was not yet sufficient in the 2023 fiscal year to offset the decline in revenue in 4,070
3,798
the area of traditional servers. Demand for power semiconductors in the area of tele-
communications infrastructure also slowed in the 2023 fiscal year. 27.9%
22.7% Revenue
1,137 Segment Result
861
Segment Result Margin

2022 2023

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 48
2023 fiscal year
Segment performance

As a result of the decline in demand for smartphones and other mobile devices, CSS  eview of the Connected Secure Systems segment
R
there was a decrease in revenue from MEMS microphones, TVS (transient voltage in the 2023 fiscal year
suppressor) diodes, as well as antenna tuners and RF antenna switches in the
2023 fiscal year. In the Connected Secure Systems segment, Infineon generated revenue in the 2023
fiscal year of €2,046 million, an increase of 12 percent compared with the figure
Our software business becomes more important year to year. For a variety of products, for the previous fiscal year of €1,822 million. The segment contributed 13 percent of
software offers an additional benefit and helps us to differentiate via the enhance- Infineon’s Group revenue.
ment of our product portfolio. We provide software either directly to complement the
firmware already integrated into the end product or as an additional service. In both The growth in revenue was driven by higher prices, an improved product mix and
cases, software enables us to augment our revenue, either by selling a greater number ­volume growth in dedicated applications. The security solutions business in particular
of higher-quality products at correspondingly higher prices or by producing additional benefited from the stabilization of the supply situation in the past fiscal year, which
revenue with our software services. In the 2023 fiscal year, we generated increasing meant it was possible to meet the outstanding demand, especially for payment and
revenue from software, primarily related to USB-C chargers. Turnkey products that can ID solutions. Moreover, demand for eSIM solutions for automotive and industrial
still subsequently be configured and programmed by the customer were particularly applications remained high.
in demand in this product area.
Demand for connectivity solutions and microcontrollers was adversely impacted by
In the 2023 fiscal year, we generated our first revenue from ion traps for quantum a worsening macroeconomic climate, which had a dampening effect on consumer
computing. Together with the German firm eleQtron GmbH, a pioneer in quantum spending. Despite macroeconomic obstacles, the digitalization of applications in the
computers, Infineon is now manufacturing quantum processors based on ion-trap context of IoT remains one of our principal long-term growth areas. This growth is
technology and supplies continuously improved generations of ion traps for eleQtron driven primarily by an increase in the penetration rate of end devices, especially in
to incorporate into its quantum computers. Several other partnerships have already the area of industrial and consumer applications.
been established with regard to the manufacture of quantum computers. One example
of these is the English company Oxford Ionics. These collaborations with partners in The trend towards cashless and contactless payment is continuing. There was strong
the quantum industry will continue to be expanded in the future. demand for our solutions across all regions.

As a result of the decrease in revenue described above, there was also a decline in Around the world, there was a significant increase in travel in the past fiscal year.
the Segment Result and the Segment Result Margin. The Segment Result in the 2023 In addition to this trend, other major ID projects contributed significantly to strong
fiscal year was €861 million, compared with €1,137 million in the 2022 fiscal year, a revenue growth in this business area.
decrease of 24 percent. The Segment Result Margin was 22.7 percent, compared with
27.9 percent in the 2022 fiscal year, see C06.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 49
2023 fiscal year
Segment performance | Review of results of operations

There was an increase in revenue from embedded SIMs (eSIMs), which are used in
vehicles with an automatic emergency call function as well as in the industrial sector.
Review of results of operations
Progress with Industry 4.0 applications is also leading to growing demand for eSIMs.
Change
Manufacturing machinery, tools and other technical devices are becoming more and
€ in millions, except earnings per share 2023 2022 absolute in %
more connected and can therefore be monitored, serviced and maintained remotely.
Revenue 16,309 14,218 2,091 15
Given the growth in revenue, both the Segment Result and Segment Result Margin Gross profit 7,413 6,131 1,282 21
were higher than in the 2022 fiscal year. Higher prices, a better product mix and Research and development expenses (1,985) (1,798) (187) (10)
­volume growth in dedicated applications led to this improvement. The Segment Selling, general and administrative expenses (1,599) (1,565) (34) (2)
Result in the 2023 fiscal year was €488 million, an increase of 29 percent compared Other operating income and expenses, net 119 77 42 55
with the prior-year figure of €378 million. Based on revenue, the Segment Result Operating profit 3,948 2,845 1,103 39
­Margin was 23.9 percent (previous year: 20.7 percent), see C07. Net financial result
(financial income and expenses, net) (54) (161) 107 66
Share of profit (loss) of associates and joint
C07 Revenue and Segment Result of the Connected Secure Systems segment ­ventures accounted for using the equity method 27 39 (12) (31)

€ in millions Income tax (782) (537) (245) (46)

Profit (loss) from continuing operations 3,139 2,186 953 44
2,046
1,822 Profit (loss) from discontinued operations,
net of income taxes (2) (7) 5 71
Profit (loss) for the period 3,137 2,179 958 44
23.9% Revenue
20.7% Basic earnings per share (in euro) 2.38 1.65 0.73 44
378 488 Segment Result
Segment Result Margin
Diluted earnings per share (in euro) 2.38 1.65 0.73 44
Adjusted earnings per share (in euro) – diluted 2.65 1.97 0.68 35
2022 2023

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 50
2023 fiscal year
Review of results of operations

High demand and positive price and exchange rate effects Slight shifts in the regional distribution of revenue
have resulted in an increase in revenue
Revenue grew by €2,091 million or 15 percent in the 2023 fiscal year to €16,309 million € in millions, except percentages 2023 2022
(previous year: €14,218 million). Around half the growth in revenue was due to price Europe, Middle East, Africa 4,360 27% 3,399 24%
increases and around half to higher volumes and product mix adjustments. Conti­ therein: Germany 2,017 12% 1,594 11%
nuing high levels of demand for semiconductors in the automotive and renewable Asia-Pacific (excluding Japan, Greater China) 2,594 16% 2,343 16%
energy sectors, in particular, had a positive impact here. At the same time, manu­ Greater China1 5,275 32% 5,204 37%
facturing capacity is continually being expanded. This was also the case in the 2023 therein: Mainland China, Hong Kong 4,124 25% 4,063 29%
fiscal year at our sites in Villach (Austria), Dresden (Germany) and Kulim (Malaysia). Japan 1,706 10% 1,415 10%
Pro­duction corridors released by contract manufacturers also contributed to the Americas 2,374 15% 1,857 13%
increase in revenue. therein: USA 1,982 12% 1,564 11%
Total 16,309 100% 14,218 100%
In addition, there were positive exchange rate effects during the reporting period.
A significant proportion of revenue in the 2023 fiscal year was earned in foreign 1 Greater China comprises Mainland China, Hong Kong and Taiwan.

­currencies, primarily in US dollars. The average euro/US dollar exchange rate was
around 1.08 in the 2022 fiscal year and 1.07 in the 2023 fiscal year. The decrease in the proportion of revenue generated in the Greater China region is
primarily due to the decline in revenue from consumer applications such as PCs
Revenue by segment is disclosed below: and smartphones.

Disproportionately low increase in cost of goods sold;

C08 Revenue by segment
significant improvement in gross margin
€ in millions
Change
8,242
€ in millions, except percentages 2023 2022 absolute in %
6,516
Cost of goods sold 8,896 8,087 809 10
4,070 3,798
As percentage of revenue 54.5% 56.9% (240 bp)
1,790 2,205 1,822 2,046 2022 Gross profit 7,413 6,131 1,282 21
20 18 2023 Gross margin 45.5% 43.1% 240 bp
Automotive Green Power & Sensor Connected Other Operating
Industrial Power Systems Secure Systems Segments
At €8,896 million, cost of goods sold during the reporting year was €809 million or
10 percent higher than the previous year’s figure of €8,087 million. The increase in the
Details on the performance of the segments can be found in the chapter “Segment cost of goods sold was therefore less than the increase in revenue. This was primarily
performance”. p. 44 ff. due to positive price effects and improvements in the product mix. The increase in idle
costs and inventory write-downs had an opposite effect.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 51
2023 fiscal year
Review of results of operations

Cost of goods sold also includes expenses of €276 million incurred mainly in connec- Expressed as a percentage of revenue, research and development expenses comprised
tion with the acquisition of Cypress (previous year: €288 million). These expenses 12.2 percent of revenue in the 2023 fiscal year, which was lower than the prior-year
include the amortization of fair value adjustments of €250 million (previous year: figure of 12.6 percent.
€278 million) identified in the course of purchase price allocations and other acquisi-
tion-related expenses. Selling, general and administrative expenses
Change
Gross profit (revenue less cost of goods sold) in the 2023 fiscal year was €7,413 million,
€ in millions, except percentages 2023 2022 absolute in %
21 percent higher than the prior-year figure of €6,131 million. The gross margin
Selling, general and administrative expenses 1,599 1,565 34 2
improved accordingly, from 43.1 percent in the 2022 fiscal year to 45.5 percent in the
As percentage of revenue 9.8% 11.0% (120 bp)
2023 fiscal year.

Operating expenses have fallen as a percentage of revenue Despite the 15 percent increase in its revenue, Infineon was able to keep its selling,
Operating expenses (research and development expenses, and selling, general and general and administrative expenses at a stable level of €1,599 million. Expressed as
administrative expenses) rose at a lower rate than revenue by €221 million in the a percentage of revenue, selling, general and administrative expenses comprised
2023 fiscal year to €3,584 million (previous year: €3,363 million), corresponding to 9.8 percent of revenue in the 2023 fiscal year, which was lower than the prior-year
22.0 percent of revenue (previous year: 23.7 percent). ­figure of 11.0 percent. The impact on earnings of the purchase price allocations and
acquisition-­related expenses included in Infineon’s selling, general and administrative
Research and development expenses expenses in the 2023 fiscal year was €168 million (previous year: €177 million).
Change

€ in millions, except percentages 2023 2022 absolute in %

Increase in net amount of other operating income and expenses
The net amount of other operating income and expenses improved in the course of
Research and development expenses, gross 2,329 2,120 209 10
the 2023 fiscal year to €119 million (previous year: €77 million). This includes income
Minus:
from the sale of Infineon’s HiRel DC-DC converter business to Micross Components,
Grants received (130) (113) (17) (15)
Inc. and from the sale of the Temecula site (USA).
Capitalized development costs (214) (209) (5) (2 )
Research and development expenses 1,985 1,798 187 10
Improvement in financial result
As percentage of revenue 12.2% 12.6% (40 bp)
The financial result in the 2023 fiscal year was a net loss of €54 million (previous year:
net loss of €161 million). The improvement in the financial result arose mainly from
Research and development expenses increased by €187 million or 10 percent, from higher interest income due to increased interest rates and from positive valuation
€1,798 million in the 2022 fiscal year to €1,985 million in the 2023 fiscal year. The effects. In contrast, interest expenses relating to financial liabilities were subject to
increase reflects the higher volume of business and results mainly from the intensi­ almost no fluctuations due to contractually agreed fixed interest rates. In addition,
fication of research and development activities and the higher headcount in this in June 2023, a bond with a nominal volume of €750 million was repaid on schedule.
area. A total of 12,830 employees were engaged in research and development as of Further information is provided in note 4 to the Consolidated Financial Statements.
30 September 2023, an increase of 7 percent over the figure for 30 September 2022 p. 110
of 12,005.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 52
2023 fiscal year
Review of results of operations

Effective tax rate of 19.9 percent Adjusted earnings per share (diluted) increased from €1.97 in the 2022 fiscal year to
The income tax expense in the 2023 fiscal year increased to €782 million (previous €2.65 per share in the 2023 fiscal year and is calculated as follows:
year: €537 million). Based on the profit from continuing operations before income Change
taxes of €3,921 million (previous year: €2,723 million), the tax rate for the reporting
€ in millions (unless otherwise stated) 2023 2022 absolute in %
year was 19.9 percent (previous year: 19.7 percent).
Profit (loss) from continuing operations – diluted 3,139 2,186 953 44
Compensation of hybrid capital investors1 (29) (29) – –
Further details regarding the income tax expense are provided in note 6 to the
Profit (loss) from continuing operations
­Consolidated Financial Statements. p. 111 ff. ­attributable to shareholders
of Infineon Technologies AG – diluted 3,110 2,157 953 44
Profit for the period and earnings per share up on previous year Plus/minus:
After deducting income taxes and adjusting for the profit/loss from discontinued Certain impairments (reversal of impairments)
operations, Infineon recorded a profit for the period of €3,137 million in the 2023 (in particular on goodwill) – (6) 6 +++

­fiscal year (previous year: €2,179 million). Losses (gains) on earnings of restructuring
and closures (4) – (4) –––
Share-based payment 92 62 30 48
The higher profit for the period resulted in a corresponding increase in earnings
Acquisition-related depreciation/amortization
per share. and other expenses 464 484 (20) (4)
Losses (gains) on sales of businesses,
Both basic and diluted earnings per share stood at €2.38 for the 2023 fiscal year or interests in subsidiaries (30) – (30) –––
(­previous year: €1.65). Other income and expenses (71) (7) (64) –––
Acquisition-related expenses within
financial result – 4 (4) –––
The calculation of earnings per share in accordance with IFRS is presented in detail
Tax effect on adjustments (95) (116) 21 18
in note 8 to the Consolidated Financial Statements. p. 115
Revaluation of deferred tax assets resulting
from the annually updated earnings forecast – (15) 15 +++
Increase in adjusted earnings per share Adjusted profit (loss) for the period from
Earnings per share in accordance with IFRS is influenced by amounts relating to pur- continuing operations attributable to shareholders
chase price allocations for acquisitions (in particular Cypress) and other exceptional of Infineon Technologies AG – diluted 3,466 2,563 903 35

items. To enable better comparability of operating performance over time, Infineon Weighted-average number of shares outstanding
(in millions) – diluted 1,306 1,304 2 0
­calculates adjusted earnings per share (diluted). Adjusted profit (loss) for the period Adjusted earnings per share (in euro) – diluted2 2.65 1.97 0.68 35
and adjusted earnings per share (diluted) should not be seen as a replacement or as
superior performance indicators, but rather as additional information to the profit (loss) 1 Including the cumulative tax effect.
2 The calculation of the adjusted earnings per share is based on unrounded figures.
for the period and earnings per share (diluted) determined in accordance with IFRS.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 53
2023 fiscal year
Review of financial condition

Review of financial condition Increase in business volume results in a rise in inventories

Inventories, and in particular work in progress, rose by €893 million to €3,974 million
Increase in property, plant and equipment due to expansion as of 30 September 2023. This increase is mainly attributable to our Automotive
in frontend manufacturing facilities ­segment, where delivery reliability is a key factor in winning and retaining orders.
Property, plant and equipment increased by €1,500 million to €7,045 million as of
30 September 2023. Additions of €2,729 million significantly exceeded depreciation Currency-related decrease in goodwill
of €1,143 million. The main focus of Infineon’s investing activities in the 2023 fiscal Goodwill decreased by €536 million to €6,547 million as of 30 September 2023.
year was on the expansion of its frontend manufacturing facilities in Villach (Austria) The decline was almost exclusively due to currency effects, in particular the weaker
and Dresden (Germany), as well as the development of the frontend manufacturing US dollar compared to the euro as of the reporting date.
site in Kulim (Malaysia).
Change Decrease in other intangible assets
30 Septem- 30 Septem- Other intangible assets decreased by €506 million to €2,977 million as of
€ in millions ber 2023 ber 2022 absolute in %
30 Sep­tember 2023. Amortization of €531 million significantly exceeded additions
ASSETS
of €255 million. Currency effects of €208 million also contributed to the decline.
Cash and cash equivalents and
financial investments 3,590 3,717 (127) (3)
Trade receivables 1,991 1,887 104 6
Repayment of financial debt
Inventories 3,974 3,081 893 29
Financial debt decreased by €929 million to €4,733 million, mainly as a result of the
Property, plant and equipment 7,045 5,545 1,500 27
repayment of a €750 million bond. Exchange rate effects of €182 million arising
Goodwill 6,547 7,083 (536) (8)
from financial debt denominated in US dollars also contributed to the reduction in
Other intangible assets 2,977 3,483 (506) (15)
financial debt.
Remaining current and non-current assets 2,315 2,116 199 9
Total assets 28,439 26,912 1,527 6
More detailed information on financial debt is provided in note 16 to the Consolidated
Financial Statements. p. 123 f.
LIABILITIES AND EQUITY
Trade payables 2,765 2,260 505 22
C09 Financial debt by currency
Financial debt 4,733 5,662 (929) (16) € in millions
Pensions and similar commitments 268 297 (29) (10)
Remaining current and non-current liabilities 3,629 3,749 (120) (3) 2022 5,662
Equity 17,044 14,944 2,100 14 40% 60%
Total liabilities and equity 28,439 26,912 1,527 6 2023 4,733 US dollar
44% 56% Euro

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 54
2023 fiscal year
Review of financial condition

Increase in trade payables RoCE for the 2023 and 2022 fiscal years is calculated as follows:
The increase in trade payables of €505 million to €2,765 million resulted mainly from Change
the increase in investments and in the business volume.
€ in millions, except percentage 2023 2022 absolute in %
Operating profit 3,948 2,845 1,103 39
Equity up mainly due to profit for the period
Plus/minus:
Equity increased by €2,100 million to €17,044 million as of 30 September 2023. The
Financial result (54) (161) 107 66
main contributory factor was the profit for the period of €3,137 million. Exchange rate
Less interest result 98 131 (33) (25)
effects recognized in other comprehensive income of €718 million and the dividend
Financial result excluding interest result1 44 (30) 74 +++
of €417 million paid out for the 2022 fiscal year had an opposite effect.
Share of profit (loss) of associates and joint
­ventures accounted for using the equity method 27 39 (12) (31)
The equity ratio as of 30 September 2023, based on total assets of €28,439 million, Income tax (782) (537) (245) (46)
was 59.9 percent (30 September 2022: 55.5 percent). Operating profit from continuing
operations after tax 1 3,237 2,317 920 40
Improvement in RoCE due to higher operating profit
In the 2023 fiscal year, operating profit from continuing operations after tax increased Assets 28,439 26,912 1,527 6
significantly by €920 million to €3,237 million (previous year: €2,317 million) and Plus/minus:
therefore at a faster rate than capital employed. Adjustments made to volumes, prices Cash and cash equivalents (1,820) (1,438) (382) (27)
and the product mix, as well as exchange rate effects, contributed to the increase in Financial investments (1,770) (2,279) 509 22
operating profit (see the chapter “Review of results of operations”, p. 49 ff.). Capital Assets classified as held for sale – – – –
employed rose by €1,151 million to €19,510 million as of 30 September 2023. Total current liabilities (5,669) (5,588) (81) (1)
Short-term financial debt and
Consequently, Return on Capital Employed (RoCE) increased from 12.6 percent to current maturities of long-term financial debt 330 752 (422) (56)

16.6 percent. Liabilities classified as held for sale – – – –

Capital employed 2 19,510 18,359 1,151 6

RoCE 1 / 2 16.6% 12.6% 400 bp

1 The financial result for the 2023 and 2022 fiscal years amounted to negative €54 million and negative €161 million, respectively,
and included negative €98 million and negative €131 million, respectively, of net interest result.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 55
2023 fiscal year
Review of liquidity

Review of liquidity improvement. This was offset by the €686 million increase in payments for property,
plant and equipment. Further information about investments made in the 2023 fiscal
Cash flow year can be found in the chapter “Review of financial condition”. p. 53 f.
Change
Cash outflows from financing activities decreased by €568 million compared with the
€ in millions 2023 2022 absolute in %
previous fiscal year. The main effects for this decline are the reduction of €640 million
Cash flows from operating activities
from ­continuing operations 3,962 3,986 (24) (1)
in net repayment of financial debt which was offset by a €66 million higher divi-
Cash flows from investing activities (2,264) (2,441) 177 7
dend payment. The net cash outflows from financing activities thus amounted to
Cash flows from financing activities (1,301) (1,869) 568 30
€1,301 million in the 2023 fiscal year.
Net change in cash and cash equivalents
from discontinued operations (2) (6) 4 67 More information about financial debt is provided in note 16 to the Consolidated
Cash-relevant change in cash and Financial Statements. p. 123 f.
cash equivalents 395 (330) 725 +++
Currency effects on cash and cash equivalents (13) 19 (32) ––– Decrease in Free Cash Flow; adjusted Free Cash Flow
Change in cash and cash equivalents 382 (311) 693 +++ at 10.0 percent of revenue
Infineon reports the Free Cash Flow figure, defined as cash flows from operating
activities and cash flows from investing activities, both from continuing operations,
Cash flows from operating activities from continuing operations decreased by after adjusting for cash flows from the purchase and sale of financial investments.
€24 million to €3,962 million. Set against a significant improvement in profit from Free Cash Flow serves as an additional performance indicator since Infineon holds
continuing operations before income taxes of €1,198 million were negative effects, part of its liquidity in the form of financial investments. This does not mean that
principally in relation to the change in other assets and other liabilities and the the Free Cash Flow calculated in this way is available to cover other disbursements,
change in working capital. because dividends, debt-servicing obligations and other fixed disbursements have
not been deducted.
Cash outflows from investing activities decreased by €177 million compared with
the previous fiscal year to €2,264 million. The improvement resulted mainly from Since the 2023 fiscal year, adjusted Free Cash Flow has become part of Infineon’s
the €643 million increase in net cash inflow from the purchase and sale of financial ­target operating model (see the chapter “Group strategy”, p. 28) and is defined
investments. Cash inflows totaling €200 million from the sale of the HiRel DC/DC as Free Cash Flow adjusted for cash outflows for investments in large ­frontend build-
­converter business and the sale of the Temecula site (USA) also contributed to the ings, for cash inflows for related investment subsidies and for major M&A transactions
(acquisitions and disposals) adjusted for cash acquired or disposed of.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 56
2023 fiscal year
Review of liquidity

Change
Both figures should not be seen as a replacement or as superior performance indicators, 30 Septem- 30 Septem-
but rather as useful information in addition to the disclosure of the cash flow reported € in millions ber 2023 ber 2022 absolute in %

in the Consolidated Statement of Cash Flows, and as a supplementary disclo­sure to Cash and cash equivalents 1,820 1,438 382 27
other liquidity performance indicators and other performance indicators determined Financial investments 1,770 2,279 (509) (22)
in accordance with IFRS. Free Cash Flow and adjusted Free Cash Flow are derived as Gross cash position 3,590 3,717 (127) (3)
follows from the Consolidated Statement of Cash Flows: Minus:
Short-term financial debt and current portion
Change
of long-term financial debt 330 752 (422) (56)
€ in millions 2023 2022 absolute in % Long-term financial debt 4,403 4,910 (507) (10)
Cash flows from operating activities1 3,962 3,986 (24) (1) Gross financial debt 4,733 5,662 (929) (16)
Cash flows from investing activities1 (2,264) (2,441) 177 7 Net cash position (1,143) (1,945) 802 41
Purchases of (proceeds from sales of)
financial investments, net (540) 103 (643) –––
Free Cash Flow 1,158 1,648 (490) (30)
Plus:
Taking into account the financial resources available to Infineon – including internal
Cash outflows for investments in large front-end
liquidity on hand, net cash that will be generated, and currently available credit facili-
buildings after deduction of cash inflows for ties amounting to €69 million (previous year: €80 million, see note 16 to the Consoli-
related investment subsidies 480 dated Financial Statements, p. 123 ) – Infineon assumes that it will be able to cover
Adjusted Free Cash Flow 1,638 those capital requirements for the 2024 fiscal year that are currently expected. These
Percentage of revenue 10.0% include the repayment of financial debt on its due date. Forecast capital requirements
1 From continuing operations. also include other financial obligations, such as orders already placed for initiated
or planned investments in property, plant and equipment (see note 23 to the Consoli-
dated Financial Statements, p. 135 f.). Investments planned for the 2024 fiscal year
Gross cash position and net cash position are described in the chapter “Outlook”. p. 62 ff.

The following table shows the gross cash position and the net cash position. Since Infineon is party to two financing agreements that contain a number of standard
some liquid funds are held in the form of financial investments, which for IFRS pur- ­covenants, including a debt coverage ratio that provides for a certain relationship
poses are not classified as cash and cash equivalents, Infineon reports on its gross between the size of debt (adjusted) and earnings (adjusted) (see note 21 to the
and net cash positions in order to provide investors with a better understanding of ­Consolidated Financial Statements, p. 132).
its overall liquidity situation. The gross and net cash positions are determined as
­follows from the Consolidated Statement of Financial Position:

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 57
2023 fiscal year
Review of liquidity

Principles and structure of Infineon’s treasury external financing requirements. Liquidity accumulated at Group level is invested
centrally by the Group Finance & Treasury department based on a conservative
Infineon treasury’s stated objective is to ensure financial flexibility based on a solid investment strategy, in which preserving capital is prioritized over maximizing returns.
capital structure. Its primary goal is to ensure that sufficient funds are available to Group Finance & Treasury is also responsible for managing currency and interest rate
finance operating activities and planned investments throughout all phases of the risks and hedging against commodity price risks. For hedging purposes, we employ
business cycle. We aim to achieve a gross liquidity level of €1 billion, plus at least the following derivative financial instruments in our current operations: forward foreign
10 percent of revenue. currency contracts to reduce the impact of exchange rate exposure (to the extent
­foreign currency cash flows are not offset within the Group) and commodity swaps to
As a general rule, debt should only constitute a modest proportion of the financing mix reduce price risks for expected purchases of gold. Derivative financial instruments
to ensure that sufficient headroom is available at all times. The key objective is to are not used for trading or speculation purposes. To hedge against most of the foreign
maintain an investment grade rating. In February 2023, S&P Global Ratings confirmed currency risk relating to the purchase price obligation arising from the acquisition
Infineon’s BBB investment grade rating and changed the outlook from “stable” to of GaN Systems, Infineon concluded a contingent (transaction-dependent) euro/US
“positive”. For further information on the nature, maturity, currency and interest rate dollar forward foreign currency contract (a deal contingent forward) and a transaction-­
structure of Infineon’s gross financial debt, see note 16 to the Consolidated Financial dependent euro/US dollar foreign currency option contract (a deal contingent option).
Statements. p. 123 f. Further information regarding derivative financial instruments and the management
of ­financial risks is provided in notes 27, p. 142 ff., and 28, p. 150 ff., to the Consoli-
The abovementioned treasury principles cover all liquidity and financing topics, such dated Financial Statements.
as banking policy and strategy, the execution of financing agreements, global liquidity
and investment management, the management of currency, interest rate and some Furthermore, to the extent permitted by law, all financing activities and credit lines
commodity price risks, and the handling of external and intragroup cash flows. worldwide are arranged, structured and managed, either directly or indirectly, by the
Group Finance & Treasury department in accordance with our treasury principles.
In accordance with our treasury principles, we adopt a highly centralized approach.
Group Finance & Treasury is the department responsible for all major tasks and A Treasury Committee is in place to deliberate on current financial market devel­
­processes worldwide relating to financing and treasury matters. opments and their potential impact on Infineon and to agree upon key liquidity,
hedging and financing topics. The Committee, which meets on a quarterly basis,
In the context of centralized liquidity management and, to the extent that this is per- comprises the CFO and representatives from the Finance & Treasury, Accounting,
mitted by law and economically justifiable, cash pooling structures are in place to Controlling and Tax departments.
ensure the best possible allocation of liquid funds within the Group and reduce its

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 58
Infineon on the capital market

Infineon on the capital market

Basic information on shares Basic information on bonds and other
financing instruments
Share types Ordinary registered shares in the form of shares or
American Depositary Shares (ADS) with a notional value
of €2 each (ADS : shares = 1 : 1) 0.625% Bond from 17 February 2022 €500 million due on 17 February 2025,
ISIN: XS2443921056
Share capital €2,611,842,274 (as of 30 September 2023),
€2,611,842,274 (as of 30 September 2022) 1.125% Bond from 24 June 2020 €750 million due on 24 June 2026,
ISIN: XS2194283672
Shares issued¹ 1,305,921,137 (as of 30 September 2023),
1,305,921,137 (as of 30 September 2022) 1.625% Bond from 24 June 2020 €750 million due on 24 June 2029,
ISIN: XS2194283839
Own shares 2,171,026 (as of 30 September 2023),
3,689,901 (as of 30 September 2022) 2.000% Bond from 24 June 2020 €650 million due on 24 June 2032,
ISIN: XS2194192527
ISIN DE0006231004
WKN 623100 2.875% Hybrid Bond from 1 October 2019 €600 million first call date 1 January 2025,
ISIN: XS2056730323
Ticker symbol IFX (share), IFNNY (ADS)
3.625% Hybrid Bond from 1 October 2019 €600 million first call date 1 January 2028,
Bloomberg IFX GY (Xetra trading system), IFNNY US ISIN: XS2056730679
Nasdaq IR Insight IFX-XE, IFNNY-PK
US Private Placement from 5 April 2016 US$350 million due on 5 April 2024
Listings Shares: Frankfurt Stock Exchange (FSE)
US Private Placement from 5 April 2016 US$350 million due on 5 April 2026
Market capitalization2 €40,879 million
(based on closing price of €31.36 as of 30 September 2023) US Private Placement from 5 April 2016 US$235 million due on 5 April 2028
Daily average shares traded on Xetra 3,829,653 (in the 2023 fiscal year) US Private Placement from 16 June 2021 US$350 million due on 16 June 2027
Trading in the USA ADS, over-the-counter trading on the OTC market US Private Placement from 16 June 2021 US$350 million due on 16 June 2029
(OTCQX International) US Private Placement from 16 June 2021 US$350 million due on 16 June 2031
Market capitalization2 US$43,245 million US Private Placement from 16 June 2021 US$250 million due on 16 June 2033
(based on closing price of US$33.17 as of 30 September 2023)
Rating of S&P Global Ratings since 15 February 2023:
Daily average ADS traded 199,504 (in the 2023 fiscal year) “BBB”, Outlook: “positive”
Index membership (selected) DAX 40
TecDAX
EURO STOXX 50
Dow Jones STOXX Europe 600
Dow Jones Euro STOXX TMI Technology Hardware & Equipment
Dow Jones Germany Titans 30
MSCI Germany
S&P Europe 350
Dow Jones Sustainability World Index

1 The number of shares issued includes own shares.

2 Calculation of market capitalization: (“shares issued” – “own shares”) x share price. The calculation is based on unrounded figures.

A full overview of other major indices in which the Infineon share is represented can be found on Infineon’s website at
www.infineon.com/cms/en/about-infineon/investor/infineon-share/#5

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 59
Infineon on the capital market

Share price performance On 3 October 2022, right at the beginning of the fiscal year, Infineon shares fell to their
lowest price for the year of €23.09. Subsequently, the share price climbed relatively
The closing price for Infineon shares at the end of the 2023 fiscal year was €31.36. steadily, reaching its year high for the 2023 fiscal year of €40.00 on 31 July 2023. With
This was up 38 percent on the closing price of €22.71 at the end of the 2022 fiscal year. an increase in value of 38 percent during the fiscal year, Infineon shares rose at a
faster rate than the DAX, which was up 27 percent. The US benchmark indices, the
Philadelphia Semiconductor Index (SOX) and Dow Jones US Semiconductor Index,
C10 Development of the Infineon share compared to Germany’s DAX Index, the Philadelphia rose even faster, mainly as a result of a surge in the price of some technology shares
Semiconductor Index (SOX) and the Dow Jones US Semiconductor Index for the 2023
fiscal year (daily closing prices)
at the end of May due to a wave of interest in artificial intelligence. The SOX improved
Infineon share price in € 30 September 2022 = 100
by 49 percent compared with the previous year and the Dow Jones US Semiconductor
Index by 79 percent. With a closing price for Infineon shares of €31.36, its market capi-
45.42 200 talization as of 30 September 2023 was €40,879 million, compared with €29,574 million
43.15 190 at the end of the 2022 fiscal year when the share price was €22.71.
40.88 180

38.61

36.34
170

160
Shareholder structure
34.07 150
As of 30 September 2023, the company BlackRock Inc. held more than 5 percent of
31.79 140 the Infineon shares issued. The share capital held by retail investors increased slightly
29.52 130 to 9.50 percent at the end of the 2023 fiscal year, compared with 9.47 percent at the
27.25 120 end of the 2022 fiscal year.
24.98 110

22.71 100 C11 Shareholder structure as of the end of the 2023 fiscal year
20.44 90
10 | 2022 11 | 2022 12 | 2022 01 | 2023 02 | 2023 03 | 2023 04 | 2023 05 | 2023 06 | 2023 07 | 2023 08 | 2023 09 | 2023

Infineon DAX SOX Dow Jones US Semiconductor Index

7.45% BlackRock Inc.

9.50% Retail investors
83.05% other

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 60
Infineon on the capital market

Dividend C12 Dividend per share for the 2014 to 2023 fiscal years
in € cents
Our dividend policy is aimed at letting shareholders adequately participate in Infineon’s
economic development and, in general, at paying out at least an unchanged dividend 32
351

even in the event of stagnating or declining earnings. The dividend payout for the 25
27 27 27
2021 fiscal year was increased by €0.05 per share compared with the previous year. 20
22 22
18
The dividend payout for the 2022 fiscal year was then increased again by €0.05, to
€0.32 per share. It is now planned to put forward a proposal at the Annual General
Meeting in February 2024 for a further increase in the dividend of €0.03. The reason
for this is Infineon’s even better business performance in the 2023 fiscal year compared 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
with the previous year while at the same time retaining the financial headroom of
1 Proposal to the Annual General Meeting to be held on 23 February 2024.
the Company for profitable growth. If the planned proposal is approved at the Annual
General Meeting, the dividend for the 2023 fiscal year would rise to €0.35 per share.
Interested parties may participate in telephone conferences via a webcast broadcast in the Investor Relations section of the
The number of shares issued remained unchanged as of 30 September 2023 at Infineon website.
1,305,921,137. This figure now includes 2,171,026 shares owned by the Company www.infineon.com/investor

that are not entitled to a dividend. The total amount to be distributed to shareholders Retail investors can contact us by email (investor.relations@infineon.com)
is therefore anticipated to rise to €456 million, compared with €417 million one and by telephone (+49 89 234-26655).

year earlier.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 61
Overall statement on Infineon’s financial condition

Overall statement on Infineon’s financial condition

Geopolitical and macroeconomic disruptions once again led to a volatile market
environment in the past fiscal year. Our target markets developed correspondingly
differently.

On a positive note, structural demand for many of our semiconductors for electro­
mobility applications remains unbroken. We saw a similarly healthy demand picture
for renewable energy applications as well as for power and charging infrastructure,
supported by government decarbonization initiatives. By contrast, demand for end
consumer applications such as PCs and smartphones declined following the corona-
virus pandemic. Consumers and companies were reluctant to spend in a persistently
inflationary and uncertain environment.

Despite the challenging conditions, Infineon was very successful in the 2023 fiscal year.
This is also reflected in our current figures, see the chapters “Group performance”,
p. 42 f., “Review of results of operations”, p. 49 ff., “Review of financial condition”,
p. 53 f., and “Review of liquidity”, p. 55 ff..

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 62
Report on outlook, risk and opportunity
Outlook

Report on outlook, risk and opportunity

Outlook Comparison of original outlook with actual figures
for the 2023 fiscal year
Actual and target values for performance indicators Revenue for the 2023 fiscal year was originally forecast in November 2022 to be
€15.5 billion, plus or minus €500 million. In light of Infineon’s positive business
The following table and subsequent comments compare the actual and forecast performance, this outlook was raised incrementally in the following quarters to an
values of Infineon’s key performance indicators for the 2023 fiscal year (FY) and show expected revenue of around €16.2 billion. The actual amount of revenue generated in
the outlook for the 2024 fiscal year. the 2023 fiscal year was €16,309 million. This figure was within the projected range
of the final forecast on 3 August 2023 and significantly above the original forecast in
€ in millions, Actuals Outlook for Actuals Outlook for November 2022. The good level of demand and price increases both had a positive
except percentages FY 2022 FY 20231 FY 2023 FY 2024 impact on revenue.
Principal performance
indicators
In conjunction with the adjustments to the revenue forecast, the expected Segment
Segment Result Margin 23.8% Around 27% 27.0% Around 24%
(at a revenue level (at a revenue level
Result Margin was also adjusted upwards in the course of the fiscal year. Originally,
of around €16.2 billion of around €17 billion) a Segment Result Margin of around 24 percent was forecast for the 2023 fiscal year.
Free Cash Flow from 1,648 Around €1.2 billion 1,158 Around €0.4 billion The most recent forecast was a figure of around 27 percent. The actual figure was
continuing operations 27.0 percent, so the forecast was met.
RoCE 12.6% Around 15% 16.6% Around 13%
According to the original forecast in November 2022, Free Cash Flow was expected to
Selected supplementary reach around €0.8 billion. As a result of the ongoing adjustments to the revenue and
performance indicators
earnings forecasts, adjustments were also made on a regular basis to the expected
Revenue respectively 14,218 Revenue increase 16,309 Revenue increase
change in revenue to around €16.2 billion to €17 billion plus figure for Free Cash Flow. The final forecast for Free Cash Flow of around €1.2 billion
compared to or minus €500 million was made in August 2023. The actual figure for Free Cash Flow in the 2023 fiscal year
previous year
was €1,158 million. This was in line with the most recent forecast and was significantly
Investments 2,310 Around €3.0 billion 2,994 Around €3.3 billion
higher than the figure originally forecast of €0.8 billion.
1 The forecast presented here corresponds to the forecast last finalized in the second and third quarters of the 2023 fiscal year.

As a result of Infineon’s positive earnings performance, the actual figure for Return
on Capital Employed (RoCE) in the 2023 fiscal year was 16.6 percent, exceeding the
forecast made in November 2022 of “around 12 percent” respectively in March 2023
of “around 15 percent”.

The actual figure for investments in the 2023 fiscal year of €2,994 million was in line
with the forecast figure of €3.0 billion.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 63
Report on outlook, risk and opportunity
Outlook

Explanatory comments on the outlook will be around 2.5 percent, a somewhat higher figure than the 2.1 percent forecast
for the 2024 fiscal year in autumn 2022. Growth of 2.4 percent is forecast for the 2024 calendar year ( R01).
This means that current growth rates for the global economy are remaining more
Assumed euro/US dollar exchange rate or less stable, although they are below their historical average. Risks of a further
As a globally operating organization, Infineon generates revenue not only in euros, weakening in the global economy also remain.
but also in foreign currencies, predominantly in US dollars. It also incurs expenses in
US dollars and, to some extent, in currencies correlated with the US dollar, such as Market analysts at Omdia expect Infineon’s reference market (i.e., the semiconductor
the Singapore dollar, the Malaysian ringgit and the Chinese renminbi. The impact of market excluding DRAM and NAND flash memory chips and microprocessors) to see
non-euro-denominated revenue and expenses does not always balance out. For this a slight decline of 1 percent in revenue in US dollar terms in the 2023 calendar year
reason, fluctuations in exchange rates, particularly between the euro and the US dollar, ( R03). Demand for semiconductors for automotive and industrial applications is
influence the amounts reported for revenue and earnings. A stronger US dollar against again higher than average, whereas revenue from semiconductors in the consumer
the euro has a positive effect, whereas a weaker US dollar against the euro has an market segment and in the area of cellular infrastructure will decrease significantly.
adverse effect on revenue and earnings. Excluding the effect of currency hedging
instruments, the impact of a deviation of 1 US cent in the actual exchange rate of the The experts at Omdia expect the Infineon reference market to grow by 6 percent in the
US dollar against the euro compared to the forecast rate would amount to a change 2024 calendar year ( R03). The long-term trends decarbonization and digitalization
in Segment Result of around €10 million per quarter or around €40 million per fiscal are continuing to drive demand for semiconductors, especially in the automotive
year compared to the forecast value. These figures are calculated on the assumption and industrial sectors. In the areas of consumer electronic goods and cellular infra-
that the exchange rates of currencies – in which costs arise for Infineon – change in structure, the forecast is for a noticeable recovery in revenue in the 2024 calendar
line with the euro/US dollar exchange rate. In terms of revenue, the impact of exchange year following the decline in revenue in the 2023 calendar year.
rates is limited primarily to the euro/US dollar rate, where a deviation of 1 US cent
in the actual exchange rate compared to the forecast rate would have an impact on
revenue of around €25 million per quarter or around €100 million per fiscal year. Outlook for the 2024 fiscal year
Planning for the 2024 fiscal year is based on an assumed exchange rate of US$1.05
to the euro. The following outlook is based on current business developments and internal
forecasts.
External growth prospects for the global economy
and the semiconductor market Revenue of €17 billion plus or minus €500 million expected
In the course of the 2023 fiscal year, the global economy continued to be affected Based on the forecasts for the growth of the global economy and the semiconductor
by the consequences of the Russian invasion of Ukraine and high inflation. Due to market segments relevant for Infineon described above and an assumed exchange
significant rises in interest rates and difficult financing conditions as a result, economic rate of US$1.05 to the euro, Infineon forecasts that Group revenue will grow in the 2024
activity slowed down considerably compared with the previous year. However, most fiscal year to €17 billion, plus or minus €500 million. This is equivalent to a 4 percent
countries have so far avoided going into recession. According to the forecasts of the increase in revenue compared with the prior year. Revenue growth in the Automotive
International Monetary Fund (IMF), global economic growth in the 2023 calendar year segment is expected to be in the low double-digit percentage range. Revenue in the

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 64
Report on outlook, risk and opportunity
Outlook

Green Industrial Power segment should remain more or less stable compared with Considerable funds are also being invested in acquiring equipment for the production
the 2023 fiscal year. The Power & Sensor Systems and Connected Secure Systems of products based on silicon carbide and gallium nitride. Further amounts invested
segments are each forecast to see a decline in revenue in the high single-digit per- in frontend facilities will be used to implement structural measures, optimize product
centage range, due to weak demand for semiconductors for computers and consumer quality, increase the degree of automation and promote innovation.
electronics as well as relatively high inventory levels still held by customers.
A significant amount of investment is also planned in order to expand capacity and
Segment Result Margin of around 24 percent of revenue expected implement structural measures at backend facilities, albeit at a much lower level
If the middle of the range for the revenue forecast is reached, the Segment Result than for frontend facilities.
Margin is expected to be around 24 percent in the 2024 fiscal year.
In the 2023 fiscal year, investments totaled €2,994 million, comprising €2,739 million
Free Cash Flow from continuing operations for property, plant and equipment and €255 million for capitalized development
For the 2024 fiscal year, Infineon is forecasting Free Cash Flow of around €0.4 billion. costs and other intangible assets. In the 2024 fiscal year, investments in capitalized
This figure includes net cash outflows for investments in the expansion of frontend development costs and other intangible assets are expected to be at a slightly higher
manufacturing facilities in Dresden (Germany) and Kulim (Malaysia) and net cash level than in the 2023 fiscal year.
outflows for the acquisition of GaN Systems.
Depreciation and amortization are predicted to be around €2.1 billion in the
RoCE 2024 fiscal year. Approximately €0.4 billion relates to the amortization of purchase
For the 2024 fiscal year, Return on Capital Employed (RoCE) is forecast to reach price allocations, mainly in connection with the acquisition of Cypress.
around 13 percent.

Investments and depreciation/amortization Overall statement on expected developments

Investments (defined by Infineon as the sum of investments in property, plant and at Infineon
equipment, investments in other intangible assets and capitalized development
costs) are planned at around €3.3 billion for the 2024 fiscal year. Based on forecasts for the development of the global economy and the semicon­
ductor market in the 2024 calendar year, Infineon expects Group revenue to grow
Most of the investment relates to the construction and expansion of frontend to €17 billion, plus or minus €500 million. The Segment Result Margin is forecast, at
manufacturing facilities. The main focus is on the completion of Phase 1 and the the middle of the range for the revenue forecast, to be around 24 percent of revenue.
commencement of Phase 2 of the third fabrication facility at the Kulim site, which is Investments are expected to be at around €3.3 billion. Depreciation and amortization
designed to manufacture compound semiconductors, as well as on the construction are expected to total about €2.1 billion. Free Cash Flow from continuing operations
of the fourth module in Dresden. should reach around €0.4 billion. Return on Capital Employed (RoCE) is forecast to be
around 13 percent.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 65
Report on outlook, risk and opportunity
Risk and opportunity report

Risk and opportunity report ERM and ICS systems

The new IDW Auditing Standard 340 on the audit of the early risk detection system
Risk policy: Basis of our risk and came into force on 1 January 2021. We therefore adapted our Risk and Opportunity
opportunity management Management System in the 2022 fiscal year to the methodology of the new standard.
Significant changes involved implementing a risk-bearing capacity concept based on
Effective risk and opportunity management is an important element of our business shareholders’ equity and improving risk aggregation by using Monte Carlo simulations.
activities and supports the implementation of our strategy to achieve our strategic Furthermore, in addition to categorizing risks (classifying risk events into various
goals. Infineon’s risk and opportunity situation continues to be characterized by the thematic blocks) and setting threshold levels for risk tolerance, the review period for
dynamic market environment in the semiconductor industry, a substantial need for risk reporting (with regard to the degree of impact of the risks and opportunities) was
capital investment to achieve and sustain its market position, extraordinarily rapid amended. The review period is divided into three time segments: the impact in the
technological change, decarbonization and digitalization. Competition to gain an current fiscal year, in the coming fiscal year, and a trend statement for years three to
innovative edge also occurs at the legal level, as evidenced, for example, by patents. five. This adjustment of the risk assessment now enables us to calculate the risk-bearing
Against this background, Infineon’s risk policy is aimed at quickly realizing the capacity for the individual fiscal years.
opportunities that arise in a way that increases its enterprise value. It also focuses
on identifying risks early and actively mitigating them – particularly those risks that Infineon’s centralized ERM system is based on a Group-wide, management-oriented
might pose a threat to Infineon’s going-concern status – by adopting appropriate ERM approach, which aims to cover all relevant risks and opportunities. This approach
countermeasures. Risk management at Infineon is therefore closely linked to corporate is based on the “Enterprise Risk Management – Integrating with Strategy and Per­
planning and the implementation of our strategy. The ultimate responsibility for formance” (2017) framework developed by the Committee of Sponsoring Organi­
risk management lies with the Infineon Management Board. zations of the Treadway Commission (COSO). The objective of the system is the early
identification, assessment and management of risks and opportunities that could
Coordinated risk management and control system elements are in place that enable have a significant influence on Infineon’s ability to achieve its strategic, operational,
us to implement our risk policy. In addition to the Risk and Opportunity Management financial, legal and compliance targets. Infineon’s Internal Control System is also
System (ERM) and the Internal Control System (ICS) described below, these elements based on a framework developed by COSO (“Internal Control – Integrated Framework”
include, in particular, the related forecasting, management and internal reporting (2013)). This framework describes the various elements in a control system (the control
processes as well as our Compliance Management System (CMS). environment, risk assessment, control activities, information and communication,
and monitoring) and sets out the basis for the evaluation of the appropriateness and
effectiveness of the ICS.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 66
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Risk and opportunity report

The responsibility for processes and systems relating to the ICS and the ERM rests All relevant risks and opportunities are assessed uniformly across the Group in
with the Risk Management and ICS function within the Group Finance department quantitative or qualitative terms, based on two factors: degree of impact on
as well as with designated Risk and Control Officers working at divisional, corporate the Segment Result and/or on business objectives, reputation, compliance, and
function and regional levels. Responsibility for the identification, measurement, likelihood of occurrence.
management and reporting of risks and opportunities, as well as for their mitigation
and control, lies with the management of the organizational unit concerned. The scales used to measure these two factors (degree of impact and likelihood of
occurrence) and the resulting risk assessment matrix for the presentation of risks
In organizational terms, implementation of the ICS and ERM is via a closed-loop, for impact years 1 and 2 are depicted in chart C13. The scale used to measure the
multiple-stage process that stipulates the manner and criteria to be applied to identify, degree of impact on the Segment Result has been adjusted in comparison with the
measure, manage, mitigate, control and report on risks and opportunities and defines previous year for the measurement of risks in the coming years to take account of the
how the system is to be monitored as a whole. Major components of the system are profitable growth and the increased size of Infineon’s business.
a quarterly analysis of risks and opportunities, a reporting of all units included, an
analysis of the overall situation at divisional and Group levels, and reporting to the Based on the potential degree of impact as well as the estimated likelihood of
Management Board on the risk and opportunity situation, the results of tests of the occurrence, a risk is classified as “very high”, “high”, “medium” or “low”.
controls, and the major management and control measures undertaken. The Manage-
ment Board, in turn, reports regularly to the Supervisory Board’s Investment, Finance
and Audit Committee on the developments and results of the ICS and ERM. Where C13 Risk assessment matrix
necessary, standard processes are supplemented by ad hoc reporting of any major Degree of impact
risks identified between the regular reporting dates. Degree of impact Likelihood of occurrence
5
on Segment Result1
4
We define a risk or an opportunity as the occurrence of future uncertainties that 1 < €40 million Marginal 1 < 10% Very unlikely
2 €40 – 100 million Minor 2 10 – 40% Unlikely
could result in either a negative or a positive variance from the business plan. We 3
3 €100 – 200 million Moderate 3 40 – 60% Possible
incorporate all relevant organizational units within the Group in this analysis, thus 2 4 €200 – 400 million Significant 4 60 – 90% Probable
covering all divisions, significant corporate functions and regions. 1
5 > €400 million Major 5 > 90% Virtually certain

1 2 3 4 5 Likelihood of occurrence
Risks and opportunities under ERM are measured on a net basis by taking into Low risk Medium risk High risk Very high risk
account any existing management and mitigation measures. The time periods and
1 Relating to a planning year.
measurement categories used are closely linked to our short-term and medium-term
business planning and entrepreneurial targets.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 67
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Risk and opportunity report

All risks and opportunities reported for Infineon are reviewed for possible cumulative The Supervisory Board’s Investment, Finance and Audit Committee monitors the
effects and analyzed using an Infineon-specific categorization model that also takes appropriateness and effectiveness of both systems (ICS and ERM).
non-financial and sustainability-related risks into account. Interdisciplinary work-
shops held at division, corporate and regional levels support our risk and opportunity As part of the group audit, the external Group auditor also examines the early risk
analysis and enhance our risk and opportunity management culture. Important detection system pursuant to section 91, paragraph 2 of the German Stock Corporation
information relevant for Infineon’s ICS and ERM is available to all employees via Act (AktG) to ascertain its suitability to detect risks at an early stage that could pose
our intranet system, including access to our guidelines containing job descriptions a threat to Infineon’s going-concern status in accordance with IDW Auditing Standard
for all functions involved in the process as well as all the information required for 340 and reports thereon annually to the Chief Financial Officer (CFO) and to the
reporting purposes. Investment, Finance and Audit Committee of the Supervisory Board.

Risk and Opportunity Managers are designated at appropriate hierarchy levels to

manage and monitor identified risks and opportunities according to their relevance. Compliance Management System
They are responsible for formally determining a set of appropriate risk and opportunity
management strategies (in the case of risks: avoidance, mitigation, control, transfer We have implemented a Group-wide Compliance Management System (CMS) to
or acceptance). Working closely with corporate functions and individual managers manage compliance-related risks in a systematic, comprehensive and sustainable
responsible for measures, the Risk and Opportunity Managers are also responsible manner. We are continuously enhancing the key elements of our CMS to prevent, detect
for defining and monitoring the measures aimed at implementing the management/ and respond to compliance-related incidents. The Corporate Compliance Officer
control strategy. The active and specific management and monitoring of risks and reports to the Chief Financial Officer and, on a quarterly basis, to the Management
opportunities are critical to the success of our system. Board and the Investment, Finance and Audit Committee of the Supervisory Board.

Compliance with the ICS and ERM approaches is monitored by the corporate function In structuring its CMS, Infineon has for years complied with IDW Auditing Standard
responsible for risk management and ICS using procedures incorporated into business 980 and has engaged an external auditing firm to confirm the appropriateness,
processes. Group Internal Audit also performs tests for compliance with certain legal implementation and effectiveness of its CMS globally in the areas of “antitrust law”
requirements and Infineon guidelines and, where appropriate, rules relating to the and “corruption prevention” (last time in the 2018/2019 fiscal year). Since that time,
ICS and ERM and recommends corrective measures. adherence to the CMS in the respective legal entities has been monitored by regular
internal audits.

As part of the CMS, a formal annual assessment of our risks is conducted with
a particular emphasis on corruption and antitrust laws. Any necessary measures
derived from this assessment are summarized in Infineon’s compliance program.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 68
Report on outlook, risk and opportunity
Risk and opportunity report

Internal Control System with respect to the ›  rocesses are in place for the segregation of duties and for the four-eye principle
p
financial reporting process in the context of preparing financial statements, as well as for authorization and
access rules for relevant IT accounting systems.
The overriding objective of our “Internal Control System with respect to the financial
reporting process” as part of the general ICS and ERM described above is to monitor
and ensure the correctness, appropriateness and effectiveness of our accounting and Assessment of appropriateness and effectiveness
financial reporting. The ICS with respect to the financial reporting process, aims to
minimize the risk of misstatement in Group accounting and external reporting and to We systematically assess the appropriateness and effectiveness of the ICS with
provide reasonable assurance that the Consolidated Financial Statements comply respect to the financial reporting process. An annual risk analysis is initially performed,
with all relevant regulations. For this to be the case, Group-wide compliance with and the defined controls are revised as and when required. The assessment involves
legal and internal regulations must be ensured. Clear responsibilities are assigned to identifying and updating significant risks relating to accounting and financial reporting
each of the processes. in the relevant legal entities and corporate functions. The controls defined for identi-
fying risks are documented in accordance with Group-wide guidelines. Regular random
The ICS with respect to the financial reporting process is also based on the framework tests are performed to assess the appropriateness and effectiveness of these controls.
developed by the COSO “Internal Control – Integrated Framework” (2013) and is The tests constitute the basis for assessing the appropriateness of the design and
part of the accounting process in all relevant legal entities and corporate functions. effectiveness of the controls. The results are documented and reported in a global
IT system. Any deficiencies identified are remedied, with due consideration given to
The system monitors compliance with policies and procedures using preventive their potential impact.
and detective controls. Among other things, we regularly check that
Furthermore, all legal entities, divisions and relevant corporate functions confirm in
›  roup-wide financial reporting, measurement and accounting guidelines are
G a Representation Letter that all business transactions, all assets and liabilities, and
continually updated and adhered to; all income and expense items have been duly recognized in the financial statements.

› intragroup transactions are fully accounted for and properly eliminated; At the end of the annual cycle, the main legal entities review and confirm the appro-
priateness and effectiveness of the ICS with respect to the financial reporting process.
› i ssues relevant for financial reporting and disclosures in connection with agreements The Management Board and the Investment, Finance and Audit Committee of the
entered into are recognized and appropriately presented; Supervisory Board are regularly informed about any significant control deficiencies
identified in the ICS with respect to the financial reporting process and about the
›  rocesses and controls are in place to explicitly guarantee the completeness and
p effectiveness of the internal controls in place.
correctness of the financial reporting in the Separate and Consolidated Financial
Statements; and

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Risk and opportunity report

In the semi-annual meetings of the Risk Committee, the Group-wide risk and Significant risks
opportunity situation is evaluated, and the results of the internal control process are
discussed. In addition, an overall statement on the appropriateness and effectiveness In the following section, we describe risks that could have a significant or material
of our general ICS and ERM is produced once a year. This overall statement is based adverse impact on Infineon’s Segment Result and/or its business objectives, reputation
on reviews conducted by Internal Audit, voluntary external reviews and audits, and or compliance. We divide these risks into four main risk categories: “Strategic risks”,
self-assessments. The evaluation here was conducted inter alia on the basis of the “Operational risks”, “Financial risks” and “Legal and compliance risks”. Within these
following criteria: main risk categories are risk sub-categories. The order in which the various risk
sub-categories are presented reflects their materiality to Infineon. This means that
› Appropriate organizational coverage of the ICS and ERM processes of Infineon the most material risk sub-category is mentioned at the beginning, and the risk
sub-categories are mentioned thereafter in descending order of materiality. The
› Availability of clear Group-wide guidelines about the ICS and ERM processes materiality of each risk is determined on the basis of the total risk score for impact in
years 1 and 2. The risk score of an individual risk for impact in years 1 and 2 is calcu-
›  imeliness of regular risk inventory, risk reporting processes and testing of
T lated in each case by multiplying the likelihood of occurrence (on a scale of 1 – 5) by
the controls the degree of impact of the risk (on a scale of 1 – 5). Unless otherwise stated, the risks
described within the risk sub-categories apply across the divisions.
› Timeliness and regular monitoring of ICS and ERM mitigation activities
The additional classification in “A”, “B” or “C” in brackets behind the respective title
›  iscussion of new risk topics with the managers responsible and with the Risk
D of the risk sub-category results from the described materiality for Infineon and
Committee enables a ranking of the risk sub-categories across the main risk categories. The risk
sub-categories with the bracketed addition “A” represent the first quartile of materiality
On the basis of the findings of reviews by Internal Audit and external reviews and (highest risk sub-categories), “B” describes the second and third quartiles and “C”
audits, we make continual improvements to our ICS and ERM. the fourth quartile. The classification in the quartiles represents a change compared
to the classification in the previous year (high, medium, low).
In all material respects, on the basis of the ICS and ERM activities conducted in the
2023 fiscal year, no factors came to our attention that would give rise to doubt as to
the appropriateness and effectiveness of the ICS and ERM system.

Both the general ICS and ERM and the ICS with respect to the financial reporting
process are continuously being developed and expanded to ensure compliance with
internal and external requirements. Improvements made to these systems contribute
to the ongoing monitoring of the relevant risk areas, including the responsible
organizational units.

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Risk and opportunity report

Strategic risks competitors in this market include improved cost structures and more effective sales
channels. There is also the risk that an increased volume of previously imported
Risks arising from cyclical market and sector trends (A) semiconductors will be manufactured in China and that a greater volume of those
made in that country will be exported. Overall, this situation could have an adverse
General market risks impact on Infineon’s results of operations.
The worldwide semiconductor market is dependent on global economic growth and
hence subject to fluctuations. Our target markets are therefore exposed to the risk of Corporate strategy risks (B)
short-term market fluctuations. As a result, our forecasts of Infineon’s future business
performance are subject to uncertainties. The absence of hitherto projected market Risks arising from an uncertain political and economic environment
growth or an unforeseen decline in market growth (related, for example, to the expan- As a globally operating company, our business is highly dependent on global economic
sion of renewables or electromobility) would make it considerably more difficult to developments. A worldwide economic downturn – particularly in the markets we
attain our own growth target. We are countering this by entering into long-term sales serve – may result in not achieving our forecasted revenue and contribution to earn-
contracts as well as service contracts that are not dependent on the cycle. We also ings. Risks could also arise due to political and social changes, particularly when
address the fluctuations in economic conditions and customer demand that are typical those changes occur in countries in which we manufacture and/or sell our products.
of the semiconductor business by continuously monitoring vital early warning indi-
cators and, as far as possible, by adopting specific mitigation strategies. Examples of Geopolitical risks in the 2023 fiscal year continue to be seen as very high, especially
these strategies include making systematic adjustments to capacity and inventories as a result of the ongoing war in Ukraine, the conflict over Taiwan and the tensions
at an early stage, introducing cost-cutting measures and making flexible use of in the Middle East, which has significantly reduced the predictability of economic
external production facilities for both frontend and backend manufacturing. development. The war in Ukraine is giving rise to risks and adverse impacts, such as
price increases and scarcity of energy and raw materials. Any escalation of the con-
If we were unprepared for market fluctuations or the mitigation strategy we had flict beyond Ukraine would further increase the risk of a global economic downturn.
adopted proved to be inappropriate, this could have a sustained adverse impact on Rising inflation and increases in interest rates may also lead to a significant decline in
Infineon’s financial condition, liquidity and results of operations. consumption.

Risks arising from increased market competition and Furthermore, customs disputes, export controls and export bans for advanced tech-
commoditization of products nology and/or critical basic materials, as well as trade restrictions such as those
The spread of new technological developments in a global market also results in between the USA and China, may constrain global trade, thereby dampening global
greater replaceability of products. Due to the resulting price competition, we may be economic growth. This includes the risk of a decline in foreign demand from a Chinese
unable to achieve our long-term strategic goals of gaining and/or maintaining market perspective and hence a decline in China’s gross domestic product. All of this may
share and of product pricing. Moreover, accelerating M&A (merger and acquisition) have a significant impact on Infineon’s liquidity and results of operations.
activities within the semiconductor industry or government subsidies restricted
to specific regions could result in even tougher competition. Potential benefits for

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 71
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Risk and opportunity report

Macroeconomic risks measures, evaluating the construction of its own solar plants, and forming partnerships
In addition to the risks mentioned above, the government debt situation worldwide, with local solar and wind farm operators).
which has changed very little in the 2023 fiscal year, continues to present a risk that,
regardless of our assessment of scenarios and potential outcomes within this complex In general, we seek to minimize procurement-related risks through our purchasing
set of risks, may have an adverse impact on Infineon’s financial condition, liquidity strategies and the use of appropriate product and cost analyses (“Best Cost Country
and results of operations. Sourcing” and “Focus on Value”), as well as through geographical diversification.
These programs include cross-functional teams of experts who are responsible for
Risks arising from acquisitions and cooperation arrangements (C) standardizing procurement processes for materials and technical equipment.
In order to develop or expand our existing business, it may be appropriate for us
to make further acquisitions or enter into other forms of partnership with external To take account of the growing importance of Infineon’s ecosystem partners (enter-
companies. In the case of acquisitions, there is a risk that we may be unsuccessful, prises with which Infineon shares a significant long-term economic interest and which
particularly regarding the integration of employees and products in existing business represent added value for Infineon’s products), we have implemented a partner risk
structures. These issues could adversely impact Infineon’s financial condition and evaluation system for Go2Market and IP/R&D partners (intellectual property/research
results of operations. and development). This partner risk assessment addresses Infineon’s dependence
on its ecosystem partners. As a result, the high-risk ecosystem partners throughout
the Group are identified and continuously assessed. Additionally, corrective risk miti-
Operational risks gation measures are implemented to avoid an adverse impact on Infineon’s financial
condition, liquidity and results of operations and/or on its business objectives, repu-
Purchasing and logistical risks (B) tation and compliance.
We cooperate with numerous suppliers who provide us with materials and services
or manage parts of our supply chain for whom there are not always multiple alter- Risks arising from manufacturing (B)
natives. We therefore partly depend on the delivery capability of our suppliers and the Our South-East Asian and European manufacturing sites are of great importance for
quality of their supplies. At the same time, we face price increases from our suppliers, our production. If, for example, political upheavals, natural disasters or pandemic
and there is a risk that it will not be possible to pass on these increases in full to outbreaks in one of these regions were to restrict or completely obstruct our ability to
our customers. In addition, the current conflict over Taiwan may affect the supply manufacture at these sites at the planned scale or to export products manufactured
situation for our Taiwanese partners. Any failure of one or more of these suppliers at the sites, this would have an adverse impact on our financial condition, liquidity
to meet their obligations to Infineon could have an adverse impact on Infineon’s and results of operations.
liquidity and results of operations.
Furthermore, our medium-term and long-term forecasts are based on expected
Another risk is the limited global availability of renewable energy, which could jeop- manufacturing cost trends for our products. In this context, measures aimed at
ardize Infineon’s declared goal of becoming carbon-neutral by 2030. Infineon has optimizing manufacturing costs for raw materials and supplies, energy, labor and
adopted a variety of measures to counter this risk (such as adopting its own efficiency automation, as well as for bought-in services from external partners, may not be

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Risk and opportunity report

feasible to the extent envisaged. The dynamic markets and the increasing customer Moreover, our dependence on energy supplies for our production, as well as on
need for flexibility, combined with short-term adjustments to order quantities, could various components (such as wafers), raw materials (including gold and copper) and
result in rising costs due to the underutilization of manufacturing capacities, higher specialty gases, exposes us to substantial price and supply risks. Price risks are also
inventory levels and unfulfilled commitments to suppliers. attributable in part to the prevailing rate of inflation. In such a situation, if we are
unable to offset cost increases or pass them on to our customers, it could have an
Thus, despite the fact that our manufacturing processes and sites have become even adverse impact on our liquidity and results of operations.
more flexible due to cross-location production optimization, fluctuations in capacity
utilization levels or purchase commitments that have been entered into, coupled In particular, a restriction of or interruption in the supply of natural gas for manufac-
with idle costs at the manufacturing sites, nevertheless continue to pose a cost risk. turing sites in Europe could lead to significant disruptions to production. In the event
of an interruption to the natural gas supply and associated production disruptions,
In addition, frontend and backend manufacturing processes need to be optimally we have secured in 2023 the supply of alternative energy sources for the operation of
synchronized to enable Infineon to develop and manufacture competitive, high-quality the combined heat and power plants at selected locations and implemented further
products designed to provide new technological solutions. In view of the rapid pace energy-saving measures (such as heat recovery).
of technological change and the dynamics of customer requirements, we consider
this coordination needs to be increasingly sophisticated. Failure to make the required In some cases, we have used derivatives to hedge price risks with respect to the
progress in this area could result in quality problems, delays in product development amount of gold wire and electricity required for the 2024 fiscal year.
or market rollout, as well as higher research and development expenses, and hence
adversely impact Infineon’s liquidity and results of operations. Risks relating to the areas of cyber security, information security
and IT security (C)
Risks that semiconductor companies operating in-house manufacturing facilities The reliability and security of Infineon’s data, systems and networks are of crucial
typically face is that of construction delays at new manufacturing sites and delays importance. At the same time, the world has seen a rise in threats in cyberspace. This
in the ramping up of production volumes at those sites, or delays in the transfer of increasingly applies to the use of IT systems to support business processes as well as
technology. One good example is the Automotive division, where customers’ product supporting internal and external communications. Despite the array of precautionary
approval and testing processes can be conducted over an extended period of time, measures put in place, any major disruption to these systems could result in risks
thus influencing our global manufacturing strategy as well as our short-term and relating to the confidentiality, availability and integrity of data used in research and
medium-term capacity utilization. Failure to anticipate these changes in the manu- development, manufacturing, selling or administration functions, which, in turn, could
facturing process in good time may result in capacity shortages and hence lower have an adverse impact on our reputation, production capability, competitiveness
revenue or lead to idle costs due to underutilized capacity and therefore have an and operations.
adverse impact on earnings.

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Potential cyber-attacks on data, systems and networks used in our manufacturing A structured project management system is in place to handle development projects,
processes present risks that could result in production downtime and supply bottle- including those of a customer-specific nature. To help us identify potential project
necks. In addition, cyber-attacks with industrial espionage intent and any related risks at an early stage and use specific measures to counter these risks, we require
potential loss of intellectual property or patents pose risks that could jeopardize our projects to have clear project milestones, ongoing verification procedures and clearly
investment in research and development and impair our long-term competitiveness. defined limits of approval authority.

Infineon has had a global cyber security program in place for many years now to Product quality assurance is of crucial importance. Shortfalls in product quality can
ensure that it is suitably protected and prepared for the constantly changing cyber lead to product recalls at our customers and related potential costs for liability claims.
security threat situation. A key element of this program is our Cyber & Information In addition, quality risks could also damage Infineon’s reputation and thus have a
Security Management System (CISMS). This system, which takes a structured approach, significant adverse impact on its future business, liquidity and results of operations.
aims to identify and evaluate risks to our data, information systems, networks, products,
solutions and services, to constantly improve our protective measures, processes and To avoid quality risks, we have adopted various quality management strategies such
tools and to adapt them to the threat situation. Our CISMS covers all areas of Infineon’s as “FMEA” (Failure Mode and Effects Analysis) and “Six Sigma” in order to prevent
business and is certified in accordance with international standards (including TISAX). or solve problems and to continue to improve all our business processes. Our Group-
The effectiveness of the CISMS is continuously monitored in the course of regular wide quality management system has been certified for a number of years in accor-
internal and external audits. dance with ISO 9001 and ISO/TS 16949 and also encompasses the development
processes of our suppliers.
Risks relating to the development process and product lifecycle (C)
The ever-increasing complexity of technologies and products, shorter development Our processes and initiatives to ensure continuous improvement are aimed, among
cycles and dynamic customer demands can cause a great deal of tension in the other things, at identifying and eliminating the causes of quality-related problems
field of product development. Buffer times built into processes to compensate for at an early stage.
potential delays are reduced accordingly. If we are unable to execute our development
plans, this could result in delays and increased development costs. Risks relating to the availability of qualified employees (C)
One of the key factors in our success is qualified employees. There is a general risk
This situation is exacerbated by the fact that some of our products are highly depen- of not being able to recruit enough people or people who are sufficiently qualified
dent on the degree of commercial success achieved by individual customers in their to work at Infineon, of losing existing qualified staff or failing to provide them with
own markets. Furthermore, there is the risk of losing future business and design wins adequate training, and of not retaining people in the business. A lack of technical or
if we are unable to deliver volumes above our contractual obligations if called upon management personnel could, among other things, restrict future growth and hence
by customers to do so. These factors could have an adverse impact on Infineon’s adversely impact Infineon’s liquidity and results of operations.
liquidity and results of operations.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 74
Report on outlook, risk and opportunity
Risk and opportunity report

To counter these risks, Infineon has set up its own work group. The specific remit of despite various state-insured deposit protection mechanisms – by a combination of
this work group is employee recruitment, retention and training. risk avoidance analyses and risk-spreading measures. The failure of these measures
could have a materially adverse impact on Infineon’s financial condition and liquidity.
Business continuity risks (C)
An increasing number of events, such as extreme weather conditions (e.g., floods, Further information regarding the management of financial risks is provided in
drought, storms) and other damaging events (e.g., earthquake, fire, chemical accidents, note 28 to the Consolidated Financial Statements. p. 150 ff.
power failures) could pose a threat at any time to our production facilities and office
buildings in all the main operating segments and thus have an adverse impact on our Other financial risks (C)
business success. In principle, there is a risk that a breach in the financial covenants of capital market
instruments (such as the net debt ratio) might lead to a credit event (default) and
We counter these risks on an individual site basis with appropriate mitigation mea- potentially to a cross-default, resulting in possible changes to existing or outstanding
sures, business interruption insurances and other business continuity structures, debts. However, this risk is currently considered to be very low. Nonetheless, regular
all of which are reviewed regularly by conducting stress tests to ensure their appro- monitoring of our projected Segment Result and of our liquidity and debt enables
priateness and effectiveness. us to identify any aggravation of this risk at an early stage and to apply appropriate
countermeasures.

Financial risks Tax risks (C)

Infineon could be exposed to tax risks arising from prior assessment periods and
Currency risks (C) changes in tax legislation or jurisdiction. Unforeseen tax expenses might occur relating
The international orientation of our business activities creates cash flows in a num- to prior assessment periods that have not yet been the subject of a tax audit or are
ber of currencies other than the euro, primarily in US dollars. A significant share of currently the subject of a tax audit in the various countries in which Infineon operates.
revenue, operating costs and capital expenditures is denominated in US dollars and The realization of any of these risks could result in fines and penalties and therefore
correlated currencies. For the most part, Infineon generates a US dollar surplus from have an adverse impact on the Group’s financial condition, liquidity and results
these transactions. of operations.

Specified currencies are hedged Group-wide by means of derivative financial instru- Infineon adopts a number of strategies to mitigate these risks. These include,
ments. These hedges are based on forecasts of future cash flows, the occurrence among others, regular employee training, a Tax Compliance Management System for
of which is uncertain. Under these circumstances and despite hedging measures, selected sites, and internal audits to ensure adherence to important compliance
exchange rate fluctuations could adversely impact Infineon’s results of operations. regulations in all legal entities of the Group (Framework for Internal Controls in the
Tax Process).
Risk of default of banks and financing partners (C)
The relatively high level of our holdings of liquid funds (gross cash position) exposes
us to the potential risk of a default of one or more of the banking and financing
partners with whom we do business. We mitigate this risk – which could still arise

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 75
Report on outlook, risk and opportunity
Risk and opportunity report

Legal and compliance risks measures for all the employees concerned. It is also using Group-wide approval
routines in all relevant processes, conducting internal audits of export control and
Regulatory risks (B) implementing other control measures.

Compliance risks Data protection risks

There is a risk that, due to inappropriate business conduct by employees, Infineon In principle, there is a risk that there could be a violation of laws and regulations
could violate antitrust regulations or laws combating bribery and corruption. Potential relating to the processing and use of personal data, which could lead to data breaches,
consequences might include heavy financial penalties, compensation claims, the resulting in severe penalties and/or reputational damage. The Data Protection
cost of external support (such as lawyers’ fees), damage to Infineon’s reputation and Management System (DPMS) established by Infineon to mitigate this risk sets out
exclusion from tendering for public contracts. rules and standards for the Group-wide processing of personal data and monitors
compliance with these rules and standards.
We have therefore introduced a Group-wide Compliance Management System (CMS)
to manage these compliance-related risks in a systematic, comprehensive and sus- Other legal risks (C)
tainable manner. We continue to refine the key elements of our CMS. One of the ways
we are doing this is by providing specific employee training designed to prevent, Risks arising from the Qimonda insolvency
detect and react to compliance-related incidents. The Corporate Compliance Officer The insolvency proceedings relating to Qimonda and the resulting actions of the
reports on a regular basis to the Chief Financial Officer, the Management Board as insolvency administrator expose Infineon to potential risks, which are described in
a whole and the Investment, Finance and Audit Committee of the Supervisory Board. detail in note 24 to the Consolidated Financial Statements. p. 136 ff.

Export control risks Provisions are recognized in connection with these matters as of 30 September 2023.
As a result of the increasing complexity and frequent changes to export control The provisions reflect the amount of those liabilities that management believes are
regulation in all the countries in which Infineon operates, there is a risk of not com- probable and can be estimated with reasonable accuracy as of that date. There can
plying fully with all applicable national and international export control laws and be no assurance that these provisions will be sufficient to cover all liabilities that may
regulations, which might result in fines and penalties. This could have an impact on be incurred in conjunction with the insolvency proceedings relating to Qimonda.
Infineon’s results of operations or could influence the availability of export permits.
Risks relating to intellectual property rights and patents
The central Export Control department is responsible for the implementation of As with many other companies in the semiconductor industry, allegations are made
effective measures relating to export control legislation and foreign trade to avoid against us from time to time that we have infringed upon other parties’ protected
sanctions and fines being imposed on Infineon. To prevent divergence from the rights. Regardless of the prospects of success of such claims, substantial legal defense
relevant regulations, Infineon has introduced organizational measures (such as costs can arise.
appointing local managers responsible for export control) and implemented training

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 76
Report on outlook, risk and opportunity
Risk and opportunity report

We cannot rule out that patent infringement claims will be upheld in a court of law, Overall statement by Group management
thus resulting in significant claims for damages or restrictions on selling the products on the risk situation
concerned. Any such outcome could, in turn, have an adverse impact on Infineon’s
financial condition, liquidity and results of operations. The overall risk assessment is based on a consolidated view of all significant
individual risks. The risk situation as a whole remains essentially unchanged from
One of the ways in which we counter patent-related risks is by adopting a specific the previous year. We are currently not aware of any individual risks capable of
patent strategy. This includes patent searches in relation to development projects, jeopardizing Infineon’s going-concern status.
the systematic registration of our own patents and patent cross-licensing arrange-
ments with major competitors. However, no such opportunities exist to safeguard
against risks of this nature in the case of companies specializing in the exploitation Significant opportunities
of patent rights.
Opportunities arising from decarbonization, digitization and the strategic approach
Further information regarding litigation and government inquiries is provided in “Product to System” have already been included in the forecast report and are
note 24 to the Consolidated Financial Statements. p. 136 ff. described here as additional overarching opportunities.

Risks arising from our global operations The classification into “A”, “B” or “C” in brackets after the respective title of the
Our global business strategy requires the maintenance of research and development opportunity is carried out in the same way as the classification for the risks.
locations and manufacturing sites throughout the world. The location of such facilities
is determined by market entry hurdles and by technology and cost factors. Risks Opportunities arising from decarbonization and the acceleration
could therefore arise if economic and geopolitical crises were to impact our regional of the energy transition
markets and if country-specific legislation and regulations were to influence invest- With a constantly growing world population and increasing industrialization, global
ment activities and the ability to trade freely. Differing practices in the way tax, judicial demand for energy is rising. Electric power is becoming the most important energy
and administrative regulations are interpreted could also restrict business activities. form of the 21st century, while renewables are playing a key role in curbing carbon
In addition, we could also be exposed to the risk of fines, sanctions and reputational emissions. The long-term objective is to achieve global decarbonization by the end
damage. of the century, as resolved at the Climate Change Conference held in Paris (France)
in December 2015. As part of its Green Deal concept, the European Union intends to
Asian markets are particularly important to our long-term growth strategy. Our become carbon-neutral by 2050.
operations in China are influenced by a legal system that may be subject to change.
One example is the fact that local regulations could make it mandatory to enter into To achieve this target, it will be necessary to develop renewable sources of energy
partnerships with local companies. These circumstances could lead to Infineon’s at a faster rate than originally envisaged. This should lead to an increase in demand
intellectual property no longer being sufficiently protected or to intellectual property for our products, as Infineon’s semiconductors enable electric power to be generated
developed by Infineon in China not being freely transferable to other countries and more efficiently from renewable energy sources. Indeed, they offer efficiency gains
locations, thus impairing Infineon’s financial condition and results of operations. at all stages of the energy industry’s conversion chain, whether in generation, trans-
mission, storage or, above all, in the use of electric power. They form the basis for the
intelligent and efficient use of electric power, for instance, in industrial applications,
power supplies for computers, consumer electronics and vehicles.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 77
Report on outlook, risk and opportunity
Risk and opportunity report

Opportunities arising from digitalization Strategic opportunities

The trend towards digitalization offers substantial business potential for Infineon. This
is reflected in the optimization of internal processes, such as for our interconnected Opportunities arising from cyclical market and sector trends (A)
manufacturing lines on a global scale, as well as in sales and administration. Further-
more, our portfolio of sensors, microcontrollers, power semiconductors, security chips Growth opportunities relating to data centers and mobile applications
and security solutions, as well as specific software, puts us in an excellent position The ongoing trends in the areas of artificial intelligence (AI) training and machine
to successfully exploit growing market potential. The strategic approach “Product learning (ML) are reflected in the high level of demand for solutions that will ensure
to System” we have already implemented makes us very well prepared to penetrate efficient and effective power management (high-voltage and low-voltage power
and develop the markets involved. Good examples already apparent today include transistors, driver ICs and control ICs) for data centers.
automated driving, the smart home and the advancing development of the IoT.
Opportunities arising from the growth of semiconductor content in vehicles
Additional opportunities are arising from accelerated and/or broader market pene- We expect semiconductor content per vehicle to continue growing. The primary
tration by digital products. In this context, the issue of “security and data integrity” driving force behind this trend is the rising demand for electromobility, active safety
plays a very important role. We are able to address this issue by offering our customers and comfort features, and driver assistance systems.
appropriate security chips and security solutions.
We are convinced that current global carbon emissions targets cannot be achieved
Opportunities arising from our strategic approach “Product to System” without further electrification. The need for increased efforts in this field is relevant
With the strategic approach “Product to System”, we seek to identify additional not only for electromobility (i.e., hybrid, plug-in hybrid and all-electric vehicles)
benefits for our customers at a system level from within our broad portfolio of tech- but also for power units in vehicles with combustion engines. Moreover, the trend
nologies and products. This strategy enables us to exploit further revenue growth towards automated and assisted driving offers great potential for our sensors and
potential, reduce customers’ development costs and shorten the lead times required microcontrollers.
to bring their products to market and thereby support our growth and margin targets.
Opportunities arising from new technologies and materials
The principal opportunities are described in the following section, divided into We are constantly striving to develop new technologies, products and solutions and
“Strategic opportunities”, “Operational opportunities” and “Financial opportunities”, to improve on existing ones, both separately and in collaboration with customers.
which are to be seen in addition to the future business prospects mentioned in the We therefore continually invest in areas such as research and development into
forecast report. However, these represent only a selection of the opportunities avail- the use of new technologies and materials. Those in current use may well lose their
able to Infineon. Our assessment of opportunities is also subject to continual change. predominance in the foreseeable future (such as Si, which is reaching its physical
This reflects the fact that our business, our markets and the technologies we deploy limits in some applications).
are constantly subject to new developments, bringing with them fresh opportunities
and causing others to become less relevant or otherwise changing the significance We therefore see numerous opportunities for working with new materials, such as
of an opportunity from our perspective. SiC and GaN, to develop more powerful and/or lower-cost products. These materials
could well have a positive influence on our ability to attain our strategic growth and
profitability targets.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 78
Report on outlook, risk and opportunity
Risk and opportunity report

Opportunities relating to market access and activities in China Financial opportunities

China is one of the world’s largest automotive markets, and its growth potential
remains high. In particular, high rates of growth for electric-powered vehicles make Currency opportunities (B)
China one of the largest markets for electromobility. Just as there are risks arising from currencies, as described in the risk section above,
there are also opportunities for Infineon in this area if exchange rates move in a way
The expansion of renewable energy sources in China has also become hugely important. that is favorable to the Group. This may have a positive impact on Infineon’s financial
Our presence in this market, alongside our collaboration with leading companies in condition, liquidity and results of operations.
the wind and solar power sectors, will create further opportunities for long-term growth.
Other opportunities arising from Infineon’s liquidity situation (C)
Our current liquidity position, which is described in detail in the chapter “Review of
Operational opportunities liquidity”, p. 55 ff., provides us with the financial headroom for organic growth and
growth by acquisition and enables us to make use of favorable refinancing conditions,
Opportunities relating to our ability to meet supply requirements if necessary.
with available capacity (C)
Our in-house manufacturing capacities, together with those of our external partners,
provide us with a degree of flexibility to meet demand. In particular, the further
expansion of 300-millimeter production and the planned new investment in the
fourth manufacturing module in Dresden (Germany), the second fully automated
300-millimeter factory at the Villach site (Austria), the third manufacturing module
in Kulim Phase 1 (Malaysia) currently under construction, and the new planned
expansion of wide band gap capacity in Kulim Phase 2 (Malaysia) will strengthen
our ability to meet the growing demand for power semiconductors. Furthermore,
additional production capacity, including external capacity, can help to meet future
customer demand.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 79
Infineon Technologies AG

Infineon Technologies AG
In addition to reporting on Infineon as a whole, in the following section we also The net figure for other income/expenses improved, primarily as a result of currency
provide information on the performance of Infineon Technologies AG. fluctuations, especially with regard to the US dollar exchange rate. There was also an
improvement in the interest result, due in particular to the positive performance of
Infineon Technologies AG is the parent company of Infineon and performs the Group’s the plan assets for pensions and similar commitments. The improvement in earnings
management and corporate functions. It is responsible for key Group-wide functions before tax of €928 million resulted in an increase in the income tax expense of
such as Finance and Accounting, Treasury Management, Investor Relations, Corporate €154 million.
Compliance, Internal Audit, Business Continuity, Business Excellence, Information
Technology, Strategy, Mergers and Acquisitions, Legal and Patents, Human Resources, The net profit of Infineon Technologies AG in the 2023 fiscal year was €1,420 million,
strategic and production-oriented research and development activities and Corpo- following a net profit of €646 million in the previous fiscal year. After transferring a total
rate and Marketing Communication worldwide. Furthermore, it manages supply of €710 million to retained earnings, unappropriated profit amounted to €710 million.
chain processes throughout the Group. Infineon Technologies AG also has its own
manufacturing facilities, located in Regensburg and Warstein (both in Germany). Statement of income of Infineon Technologies AG in accordance with
the German Commercial Code (condensed)
Unlike the Consolidated Financial Statements, which are prepared in accordance with Change
International Financial Reporting Standards (IFRS), the Separate Financial Statements
€ in millions 2023 2022 absolute in %
of Infineon Technologies AG are prepared in accordance with the provisions of the
German Commercial Code (HGB). The complete Separate Financial Statements are Revenue 9,865 7,920 1,945 25
published separately. Cost of goods sold (5,894) (4,682) (1,212) (26)
www.infineon.com/cms/en/about-infineon/investor/reporting/financial-statements-hgb/ Gross profit 3,971 3,238 733 23
Research and development expenses (1,599) (1,394) (205) (15)
Selling expenses (550) (533) (17) (3)
Earnings position General and administrative expenses (304) (300) (4) (1)
Other income (expense), net 132 (119) 251 +++
Continuing high demand for semiconductor products (which had an impact on both Result from investments, net 43 67 (24) (36)
volumes and prices) led to an increase in revenue for Infineon Technologies AG of Interest result (14) (201) 187 93
25 percent to €9,865 million (2022: €7,920 million). Gross profit rose accordingly by Other financial result 4 (3) 7 +++
23 percent to €3,971 million (2022: €3,238 million). Operating expenses (research Income tax (263) (109) (154) –––
and development expenses, selling, general and administrative expenses) increased Income after taxes/net profit 1,420 646 774 +++
in the 2023 fiscal year at a lower rate than revenue, by €226 million to €2,453 million Transfers to retained earnings (710) (228) (482) –––
(2022: €2,227 million), thus comprising 24.9 percent of revenue (2022: 28.1 percent). Unappropriated profit 710 418 292 70

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 80
Infineon Technologies AG

Net assets and financial position Statement of financial position of Infineon Technologies AG
in accordance with the German Commercial Code (condensed)
Total assets increased by 11 percent, from €20,766 million as of 30 September 2022 to
Change
€22,990 million as of 30 September 2023. Non-current assets rose by €1,041 million, 30 Septem- 30 Septem-
mainly due to an increase in loans to affiliated companies. Current assets increased € in millions ber 2023 ber 2022 absolute in %
by €1,186 million as a result of the higher volume of business. Receivables and other Intangible assets, property, plant and equipment 680 620 60 10
assets rose by €627 million and inventories by €614 million. Offsetting these increases Financial assets 13,663 12,682 981 8
was the decrease in cash and cash equivalents and marketable securities of €55 million Non-current assets 14,343 13,302 1,041 8
to €3,347 million (30 September 2022: €3,402 million). Cash and cash equivalents Inventories 2,215 1,601 614 38
and marketable securities accounted for 39 percent of current assets. Receivables and other assets 2,950 2,323 627 27
Cash and cash equivalents, marketable securities 3,347 3,402 (55) (2)
The increase in equity of €1,048 million was mainly due to the net profit for the Current assets 8,512 7,326 1,186 16
2023 fiscal year of €1,420 million, offset by the dividend paid out for the 2022 fiscal year Prepaid expenses 135 137 (2) (1)
of €417 million. Active difference resulting from offsetting – 1 (1) –––
Total assets 22,990 20,766 2,224 11
Provisions for pensions and similar commitments decreased by a total of €14 million, Share capital 2,608 2,605 3 0
due to an increase in the value of the plan assets that exceeded the increase in Capital reserves 3,581 3,545 36 1
the settlement amount. Other provisions rose by €203 million, mainly due to the Retained earnings 3,958 3,241 717 22
increase of €128 million in tax provisions. Liabilities increased in the 2023 fiscal year Unappropriated profit 710 418 292 70
by €988 million to €10,608 million, mainly due to the development of liabilities Shareholders’ equity 10,857 9,809 1,048 11
to affiliated companies as a result of the higher volume of business. Provisions for pensions and similar commitments 386 400 (14) (4)
Other provisions 1,138 935 203 22
The equity ratio at 30 September 2023 was 47.2 percent, the same figure as of the Provisions 1,524 1,335 189 14
end of the previous year. Bonds 3,881 4,632 (751) (16)
Loans payable to banks – 1 (1) –––
For information on Infineon’s own shares, please see the comments relating to Advance payments received 52 – 52 +++
section 160, paragraph 1, no. 2 of the German Stock Corporation Act (AktG) provided Trade payables 657 464 193 42
in the Separate Financial Statements of Infineon Technologies AG. Liabilities to affiliated companies 5,060 3,627 1,433 40
www.infineon.com/cms/en/about-infineon/investor/reporting/financial-statements-hgb/ Other liabilities 958 896 62 7
Liabilities 10,608 9,620 988 10
Deferred income 1 2 (1) (50)
Total liabilities and shareholders’ equity 22,990 20,766 2,224 11

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 81
Infineon Technologies AG

Dividend Expected developments and associated

significant risks and opportunities
In accordance with the German Stock Corporation Act (AktG), the amount of the divi-
dend available for distribution to shareholders is based on the level of unappropriated Expected developments at Infineon Technologies AG and the associated significant
profit recorded by the ultimate parent company, as determined in accordance with risks and opportunities are essentially identical to those of the Group as a whole.
the provisions of the German Commercial Code (HGB). As a general rule, Infineon Technologies AG participates in the risks of its subsidiaries
and equity investments on the basis of the extent of its shareholding. As the parent
The ultimate parent company Infineon Technologies AG, after making a transfer to company of the Group, Infineon Technologies AG is integrated into the Group-wide
other retained earnings, reported unappropriated profit of €710 million in its financial risk management and internal control systems. For more information on this topic,
statements for the fiscal year ended 30 September 2023. With regard to the 2023 expected developments and associated significant risks and opportunities, see the
fiscal year, a proposal will be made to pay a dividend of €456 million, or €0.35 per chapter “Risk and opportunity report”. p. 65 ff.
dividend-entitled share, out of the unappropriated profit of Infineon Technologies AG.
The disbursement of the proposed dividend is subject to approval by the shareholders. Most transactions within the Group involving derivative financial instruments are
handled by Infineon Technologies AG. The comments provided in “Principles and
The Company paid a dividend of €0.32 per share (€417 million in total) for the structure of Infineon’s treasury” within the chapter “Review of liquidity”, p. 57,
2022 fiscal year. regarding the nature and scope of transactions with derivative financial instruments
and hedged risks also apply to Infineon Technologies AG. Information on this subject
For information regarding Infineon’s long-term dividend policy, see the “Dividend” is also provided in the Notes to the Separate Financial Statements of Infineon
paragraph in the chapter “Infineon on the capital market”. p. 60 Technologies AG.
www.infineon.com/cms/en/about-infineon/investor/reporting/financial-statements-hgb/

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 82
Corporate Governance
Information pursuant to the German Commercial Code (HGB)

Corporate Governance
Information pursuant to Pursuant to section 67, paragraph 2 AktG, rights and obligations arising from shares
in relation to Infineon Technologies AG exist only for and from the parties entered
section 289a, paragraph 1 and in the share register. In order to be recorded in the share register, shareholders are
required to submit to Infineon Technologies AG the number of shares held by them
section 315a, paragraph 1 of the and their name or company name, their postal and electronic address and, where
applicable, their registered office and their date of birth. Pursuant to section 67,
German Commercial Code (HGB) paragraph 4 AktG, Infineon Technologies AG is entitled to request information from
the party listed in the share register regarding the extent to which the shares relating
to the entry in the share register are actually owned by the registered party and, if
Structure of the subscribed capital not, to receive the information necessary for the maintenance of the share register
The share capital of Infineon Technologies AG stood at €2,611,842,274 as of in relation to the party for whom the shares are held. Section 67, paragraph 2 AktG
30 September 2023. This sum is divided into 1,305,921,137 no par value registered stipulates that the shares concerned do not confer voting rights until such time as the
shares, each of which represents a notional portion of the share capital of €2 information requested has been supplied in the appropriate manner.
per share. Each share carries one vote and gives an equal right to the profit of the
Company based on the profit appropriation resolved by the shareholders at the Direct or indirect shareholdings exceeding 10 percent
Annual General Meeting. of the voting rights
Section 33, paragraph 1 WpHG requires each shareholder whose voting rights reach,
The Company held 2,171,026 of the abovementioned issued shares as own shares exceed or, after exceeding, fall below 3, 5, 10, 15, 20, 25, 30, 50 or 75 percent of the
as of 30 September 2023 (30 September 2022: 3,689,901). Own shares held by the voting rights of a listed corporation to notify such corporation and the German Federal
Company on the date of the Annual General Meeting do not carry a vote and are not Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht –
entitled to participate in profit. “BaFin”) immediately. As of 30 September 2023, we have not been notified of any
direct or indirect shareholdings reaching or exceeding 10 percent of the voting rights.
Restrictions on voting rights or the transfer of shares The shareholdings notified to us as of 30 September 2023 are presented in the Notes
Restrictions on the voting rights of shares may, in particular, arise as a result of the to the Separate Financial Statements of Infineon Technologies AG under the infor­
regulations set out in the German Stock Corporation Act (Aktiengesetz – “AktG”). For mation pursuant to section 160, paragraph 1, number 8 AktG.
example, pursuant to section 136 AktG, shareholders are prohibited from voting under
certain circumstances and, pursuant to section 71b AktG, Infineon Technologies AG Shares with special rights that confer control rights
has no voting rights on its own shares. Furthermore, non-compliance with the notifi- No shares conferring special control rights have been issued.
cation requirements pursuant to section 33, paragraphs 1 or 2 of the German Securi-
ties Trading Act (Wertpapierhandelsgesetz - “WpHG”) and section 38, paragraph 1, or
section 39, paragraph 1 WpHG can, pursuant to section 44 WpHG, have the effect that
certain rights (including the right to vote) may, at least temporarily, not exist. We are
not aware of any contractual restrictions on voting rights or on the transfer of shares.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 83
Corporate Governance
Information pursuant to the German Commercial Code (HGB)

Nature of control over voting rights when employees participate in Pursuant to section 84, paragraph 1, sentence 1 AktG, the maximum term of appoint-
the Company’s capital and do not exercise their control rights directly ment for Management Board members is five years. Re-appointment or an extension
Employees who participate in the capital of Infineon Technologies AG exercise of the term of office, in each case for a maximum of five years, is permitted (section 84,
their control rights directly in accordance with the applicable laws and the Articles paragraph 1, sentence 2 AktG). Section 5, paragraph 1 of the Articles of Association
of Association, just like other shareholders. and section 84, paragraph 2 AktG stipulate that the Supervisory Board may appoint
a chairman and a deputy chairman to the Management Board. The Supervisory Board
Statutory regulations and Articles of Association provisions governing may revoke the appointment of a Management Board member and the chairman of
the appointment and dismissal of members of the Management Board the Management Board for good cause (section 84, paragraph 4 AktG).
and amendments to the Articles of Association
Section 5, paragraph 1 of the Articles of Association stipulates that the Management Pursuant to section 179, paragraph 1 AktG, responsibility for amending the Articles of
Board of Infineon Technologies AG is required to consist of at least two members. Association rests with the Annual General Meeting. However, section 10, paragraph 4
With effect from 15 April 2021, the Management Board comprises five members of the Articles of Association gives the Supervisory Board the authority to amend the
(previously four members). Management Board members are appointed and dis- Articles of Association insofar as any such amendment relates merely to the wording,
missed by the Supervisory Board pursuant to section 84, paragraph 1 AktG. As such as changes in the share capital amount resulting from a capital increase out of
Infineon Technologies AG falls within the scope of the German Co-Determination Act conditional or authorized capital or a capital decrease by means of cancellation of own
(Mitbestimmungsgesetz – “MitbestG”), the appointment or dismissal of Management shares. Unless the Articles of Association provide for another majority, section 179,
Board members requires a two-thirds majority of the votes of the Supervisory Board paragraph 2 AktG stipulates that resolutions of the Annual General Meeting regarding
members (section 31, paragraph 2 MitbestG). If the required majority is not achieved the amendment of the Articles of Association require a majority of at least three-
at the first ballot, the appointment may be approved on the recommendation of quarters of the share capital represented. Section 17, paragraph 1 of the Articles of
the Mediation Committee at a second ballot by a simple majority of the votes of the Association of Infineon Technologies AG provides in principle for resolutions to be
Supervisory Board members (section 31, paragraph 3 MitbestG). If the required passed with a simple majority of the votes cast and, when a capital majority is required,
majority is still not achieved, a third ballot is held in which the chairman of the Super- with a simple majority of the capital, unless a higher majority is required by law or
visory Board has two votes (section 31, paragraph 4 MitbestG). in accordance with other stipulations contained in the Articles of Association.

In urgent cases, if the Management Board does not have the required number of Powers of the Management Board, particularly with respect to
members, the local court (“Amtsgericht” of Munich) makes the necessary appointment issuing or buying back of shares
upon the petition of a party concerned pursuant to section 85, paragraph 1 AktG. The power of the Management Board to issue shares derives from section 4 of the
Articles of Association of the Company, in conjunction with applicable legal provisions.
Further information relating to the Company’s existing Authorized and Conditional
Capital can be found in note 20 to the Consolidated Financial Statements, p. 129 ff..

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 84
Corporate Governance
Information pursuant to the German Commercial Code (HGB)

Authorization to issue convertible bonds and/or bonds with warrants › insofar as bonds are issued in return for a capital contribution in kind, provided
The Annual General Meeting held on 20 February 2020 authorized the Management that the value of any such capital contribution in kind is appropriate in relation to
Board, in the period through 19 February 2025, either once or in partial amounts, to the market value of the bonds.
issue convertible bonds and/or bonds with warrants (referred to collectively as “bonds”)
of an aggregate nominal amount of up to €4,000,000,000, to guarantee such bonds Even if the dilution protection regulations are applied, the conversion or option
issued by subordinated Group companies of the Company and to grant bond creditors price must equal at least 80 percent of the arithmetic mean of the closing prices
and/or bondholders conversion or option rights to up to 130,000,000 no par value of the Company’s share in Xetra trading on the Frankfurt Stock Exchange (or a com­
registered Company shares, representing a notional portion of the share capital of up parable successor system). Further details – including the conditions under which the
to €260,000,000 in accordance with the relevant terms of the bonds. With the approval conversion or option price may be reduced – are set out in the authorization.
of the Supervisory Board, the Management Board is authorized to exclude the right
of shareholders to subscribe to the bonds Subject to the requirements resolved by the shareholders at the Annual General
Meeting, the Management Board is authorized to determine the further details of the
› if the issue price is not substantially lower than the bonds’ theoretical market bond issue, including its terms and conditions.
value as determined in accordance with accepted valuation methods, particularly
those based on financial mathematics. However, this right of exclusion only Authorization to acquire own shares
applies insofar as the aggregate value of the shares to be issued to service the con- A resolution passed by the Annual General Meeting on 16 February 2023 authorized
version or option rights established on this basis does not exceed 10 percent of the Infineon Technologies AG, in the period through 15 February 2028, to acquire its own
share capital, neither at the time the resolution concerning this authorization was shares, within the statutory boundaries, in an aggregate amount not exceeding
passed by the Annual General Meeting, at the time of this authorization becoming 10 percent of the share capital at the time the resolution was passed or – if the latter
effective, nor at the time it is exercised; amount is lower – of the share capital in existence at the time the authorization is
exercised. The Company may not use the authorization for the purpose of trading in
› in order to exclude fractional amounts resulting from a given subscription ratio its own shares. The Management Board decides whether own shares are acquired
from the subscription rights of the shareholders to the bonds or insofar as any such through the stock exchange, by means of a public offer to purchase addressed to
action is necessary in order to grant holders of conversion or option rights arising all shareholders, a public invitation to submit offers for sale, or via a bank or other
from bonds that have already been or will in future be issued by the Company entity that meets the requirements of section 186, paragraph 5, sentence 1 AktG.
or its subordinated Group companies subscription rights to that extent to which The authorization includes differentiating requirements – in particular with regard to
they would be entitled after exercising their rights, or after the fulfillment of any the permissible purchase price – for each method of acquisition.
conversion or option obligations; or

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 85
Corporate Governance
Information pursuant to the German Commercial Code (HGB)

Infineon shares acquired or being acquired on the basis of this or an earlier authoriza- If own shares are acquired using derivatives in accordance with the requirements
tion may – if not sold either via the stock exchange or by means of a public offer to stipulated in the authorization, any right of the shareholders to conclude such deriva-
purchase addressed to all shareholders – be used for all legally permissible purposes. tive transactions with the Company will be excluded in the analogous application
The shares may also be canceled or offered to third parties in conjunction with busi- of section 186, paragraph 3, sentence 4 AktG. Shareholders have no right to conclude
ness combinations or the acquisition of companies, parts of companies or participa- derivative transactions with the Company.
tions in companies, as well as being offered and transferred to other depositable
assets related to such an acquisition project. Under specified circumstances, subject Shareholders have a right to sell their Infineon shares in this connection only insofar
to the approval of the Supervisory Board, the shares may also be sold to third parties as the Company is required to accept the shares under the derivative transactions.
in return for cash payment (including by means other than through the stock No other right to sell shares shall apply in this connection.
exchange or through an offer to all shareholders); used to meet the Company’s obli-
gations under convertible bonds and bonds with warrants; offered for sale or granted The use of own shares acquired through derivatives is governed by the same rules
as a remuneration component to members of the Company’s Management Board, as those applicable for the direct acquisition of own shares.
members of the management boards and other boards of affiliated companies, and
employees of the Company or of its affiliated companies; and, finally, used to repay Significant agreements of the Company that are subject to the
securities-backed loans. The subscription right of shareholders is excluded in the condition of a change of control as a result of a takeover bid and
cases mentioned above. In addition, the subscription rights of shareholders are remuneration agreements with Management Board members
excluded in respect of fractional amounts in instances in which the shares are sold or employees in the event of a takeover bid
through a public offer addressed to all shareholders. Various financing agreements with lending banks and capital market creditors
contain defined change-of-control clauses that give creditors the right to demand
According to a resolution passed by the Annual General Meeting on 16 February 2023, early repayment; these clauses reflect standard market practice.
shares in Infineon Technologies AG may also be acquired using equity derivatives.
The total number of shares that can be acquired using derivatives may not exceed Furthermore, certain patent cross-licensing agreements, development agreements,
5 percent of the Company’s share capital, either at the time of this authorization subsidy agreements and approvals, supply contracts, joint venture agreements and
becoming effective or at the time of its exercise through the use of the derivatives. license agreements contain customary change-of-control clauses, which, in the event
The shares acquired through the exercise of this authorization are to be counted of a change of control at Infineon Technologies AG, make the continuation of the
toward the acquisition threshold for the shares acquired in accordance with the agreement dependent on the consent of the contracting party, grant special rights
authorization to acquire own shares as described above. The authorization stipulates to the contracting party that may be unfavorable for Infineon, or even entitle the
other restrictions when derivatives are deployed, including with regard to their contracting party to terminate the agreement.
execution, term, servicing and price.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 86
Corporate Governance
Information pursuant to the German Commercial Code (HGB) |
Statement on Corporate Governance of the German Commercial Code (HGB) | Remuneration Report

If a Management Board member leaves their position in connection with a defined

change of control, that member is entitled to continued payment of the relevant
Statement on Corporate Governance
annual remuneration for the remaining contract term up to a maximum period of
24 months. Further details are contained in the Remuneration Report (see the chapter
pursuant to sections 289f and 315d
“Remuneration Report”). of the German Commercial Code (HGB)
The change-of-control clauses agreed to by Management Board members are
intended to provide financial security to those members in the event of a change of The Statement on Corporate Governance pursuant to sections 289f and 315d of the
control, with a view to preserving their independence in this situation. German Commercial Code (HGB) is publicly available.
www.infineon.com/declaration-on-corporate-governance
The conditions of both the Performance Share Plan and the Restricted Stock Unit Plan,
in which Infineon managers and other selected employees worldwide participate,
contain rules that are triggered in the event of a defined change of control. For the
most part, these rules specify that the vesting periods that are envisaged by the
relevant plans are aborted in the event of a change of control. Although Management
Remuneration Report
Board members also participate in the Performance Share Plan, the rules therein
relating to a change of control do not apply to Management Board members, given The Remuneration Report is publicly available.
that their service contracts take precedence. www.infineon.com/remuneration-report

The references to the Remuneration Report are not audited as part of the audit of
the financial statements. The Remuneration Report was subjected to a separate
substantive audit by the auditor in accordance with IDW PS 490. This audit also
includes the formal audit required by section 162, paragraph 3 of the German Stock
Corporation Act (AktG).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 87
List of references

List of references
R01 International Monetary Fund (IMF): Neubiberg, 21 November 2023
World Economic Outlook. October 2023.
Management Board
R02 World Semiconductor Trade Statistics (WSTS):
Semiconductor Industry Blue Book History. October 2023.

R03 Based on or includes research from Omdia: Jochen Hanebeck Elke Reichart Dr. Sven Schneider
Application Market Forecast Tool – 3Q23. September 2023.

R04 Based on or includes research from Omdia:

Competitive Landscaping Tool CLT Quarterly – 2Q23. August 2023. Andreas Urschitz Dr. Rutger Wijburg

Infineon | Annual Report 2023

 88

Consolidated Financial Statements

89 Consolidated Statement of Profit or Loss
90 Consolidated Statement of Comprehensive Income
91 Consolidated Statement of Financial Position
92 Consolidated Statement of Cash Flows
93 Consolidated Statement of Changes in Equity
95 Notes to the Consolidated Financial Statements

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 89

Consolidated Statement of Profit or Loss

Change

€ in millions Notes 2023 2022 absolute in %

Revenue 4, 29 16,309 14,218 2,091 15
Cost of goods sold 4 (8,896) (8,087) (809) (10)
Gross profit 7,413 6,131 1,282 21
Research and development expenses 4 (1,985) (1,798) (187) (10)
Selling, general and administrative expenses 4 (1,599) (1,565) (34) (2)
Other operating income 192 129 63 49
Other operating expenses (73) (52) (21) (40)
Operating profit 3,948 2,845 1,103 39
Financial income 4 105 7 98 +++
Financial expenses 4 (159) (168) 9 5
Share of profit (loss) of associates and joint ventures accounted for using the equity method 5 27 39 (12) (31)
Profit (loss) from continuing operations before income taxes 3,921 2,723 1,198 44
Income taxes 6 (782) (537) (245) (46)
Profit (loss) from continuing operations 3,139 2,186 953 44
Profit (loss) from discontinued operations, net of income taxes 7 (2) (7) 5 71
Profit (loss) for the period 3,137 2,179 958 44
Attributable to:
Shareholders and hybrid capital investors of Infineon Technologies AG 3,137 2,179 958 44
Basic earnings per share (in euro) attributable to shareholders of Infineon Technologies AG:1
Basic earnings per share (in euro) from continuing operations 8 2.39 1.66 0.73 44
Basic earnings (loss) per share (in euro) from discontinued operations 8 (0.01) (0.01) – –
Basic earnings per share (in euro) 8 2.38 1.65 0.73 44
Diluted earnings per share (in euro) attributable to shareholders of Infineon Technologies AG:1
Diluted earnings per share (in euro) from continuing operations 8 2.38 1.65 0.73 44
Diluted earnings (loss) per share (in euro) from discontinued operations 8 – – – –
Diluted earnings per share (in euro) 8 2.38 1.65 0.73 44

1 The calculation of earnings per share is based on unrounded figures.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 90

Consolidated Statement of Comprehensive Income

Change

€ in millions Notes 2023 2022 absolute in %

20
Profit (loss) for the period 3,137 2,179 958 44
Actuarial gains (losses) on pensions and similar commitments 17 310 (293) (95)
Total items that will not be reclassified subsequently to profit or loss 17 310 (293) (95)
Currency effects (718) 1,369 (2,087) –––
Gains (losses) resulting from hedge accounting 9 4 5 +++
Cost of hedging (4) – (4) –––
Total items that may be reclassified subsequently to profit or loss (713) 1,373 (2,086) –––
Other comprehensive income (loss), net of tax (696) 1,683 (2,379) –––
Total comprehensive income (loss), net of tax 2,441 3,862 (1,421) (37)
Attributable to:
Shareholders and hybrid capital investors of Infineon Technologies AG 2,441 3,862 (1,421) (37)

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 91

Consolidated Statement of Financial Position

30 Sep- 30 Sep- Change 30 Sep- 30 Sep- Change
tember tember tember tember
€ in millions Notes 2023 2022 absolute in % € in millions Notes 2023 2022 absolute in %
ASSETS LIABILITIES AND EQUITY
Cash and cash equivalents 1,820 1,438 382 27 Short-term financial debt and current portion
Financial investments 9 1,770 2,279 (509) (22) of long-term financial debt 16 330 752 (422) (56)

Trade receivables 10 1,991 1,887 104 6 Trade payables 2,765 2,260 505 22

Inventories 11 3,974 3,081 893 29 Current provisions 17 799 983 (184) (19)

Current income tax receivables 63 58 5 9 Current income tax payables 418 356 62 17

Contract assets 115 85 30 35 Current lease liabilities 15 72 76 (4) (5)

Other current assets 12, 27 959 625 334 53 Other current liabilities 18, 27 1,285 1,161 124 11

Total current assets 10,692 9,453 1,239 13 Total current liabilities 5,669 5,588 81 1

Property, plant and equipment 13 7,045 5,545 1,500 27 Long-term financial debt 16 4,403 4,910 (507) (10)

Goodwill 14 6,547 7,083 (536) (8) Pensions and similar commitments 19 268 297 (29) (10)

Other intangible assets 13 2,977 3,483 (506) (15) Deferred tax liabilities 6 254 371 (117) (32)
Other non-current provisions 17 300 289 11 4
Right-of-use assets 15 405 405 – –
Non-current lease liabilities 15 309 310 (1) –
Investments accounted for
using the equity method 5 114 100 14 14 Other non-current liabilities 27 192 203 (11) (5)
Non-current income tax receivables 2 2 – – Total non-current liabilities 5,726 6,380 (654) (10)
Deferred tax assets 6 268 527 (259) (49) Total liabilities 11,395 11,968 (573) (5)
Other non-current assets 27 389 314 75 24 Equity: 20
Total non-current assets 17,747 17,459 288 2 Ordinary share capital 2,612 2,612 – –
Additional paid-in capital 6,684 6,579 105 2
Retained earnings 6,204 3,506 2,698 77
Other reserves 354 1,067 (713) (67)
Own shares (13) (23) 10 43
Hybrid capital 1,203 1,203 – –
Total equity 17,044 14,944 2,100 14

Total assets 28,439 26,912 1,527 6 Total liabilities and equity 28,439 26,912 1,527 6

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 92

Consolidated Statement of Cash Flows

Change Change

€ in millions Notes 2023 2022 absolute in % € in millions Notes 2023 2022 absolute in %
26 Purchases of financial investments 9 (5,198) (5,605) 407 7
Profit (loss) for the period 3,137 2,179 958 44 Proceeds from sales of financial investments 9 5,738 5,502 236 4
Plus: profit (loss) from discontinued operations, Acquisitions of businesses, net of cash acquired 3 (22) (36) 14 39
net of income taxes 2 7 (5) (71) Proceeds from sales of businesses and
Adjustments to reconcile profit (loss) for the interests in subsidiaries, net of cash disbursed 91 – 91 +++
period to cash flows from operating activities: Investments in related companies (2) (8) 6 75
Depreciation and amortization 13, 15 1,754 1,664 90 5 Purchases of other intangible assets and
Income tax 6 782 537 245 46 other assets 13 (255) (257) 2 1
Interest result 4 98 131 (33) (25) Purchases of property, plant and equipment 13 (2,739) (2,053) (686) (33)
Gains on disposals of Proceeds from sales of property, plant and
property, plant and equipment (99) (12) (87) ––– equipment and other assets 123 16 107 +++
Dividends received 5 7 6 1 17 Cash flows from investing activities (2,264) (2,441) 177 7
Impairments (reversals of impairments) 13, 14, 29 18 24 (6) (25) Net change in related party financial
Losses (gains) from sales of businesses, receivables and payables 25 19 – 19 +++
interests in subsidiaries and investments (30) – (30) ––– Proceeds from issuance of
Share-based payment 22 92 62 30 48 long-term financial debt 16 – 500 (500) –––

Other non-cash result (46) (45) (1) (2) Repayments of long-term financial debt 16 (753) (1,893) 1,140 60

Change in trade receivables 10 (185) (307) 122 40 Payments for lease liabilities 15 (86) (84) (2) (2)

Change in inventories 11 (1,014) (766) (248) (32) Change in cash deposited as collateral – (2) 2 +++

Change in trade payables 547 640 (93) (15) Payments for other financial liabilities (25) – (25) –––

Change in provisions 17 (138) 89 (227) ––– Dividend payments 20 (417) (351) (66) (19)

Change in other assets and other liabilities (359) 266 (625) ––– Cash outflow to hybrid capital investors 20 (39) (39) – –

Interests received 4 57 10 47 +++ Cash flows from financing activities (1,301) (1,869) 568 30

Interests paid 4 (128) (149) 21 14 Net change in cash and cash equivalents 395 (330) 725 +++

Income taxes paid 6 (533) (350) (183) (52) Currency effects on cash and cash equivalents (13) 19 (32) –––

Cash flows from operating activities Cash and cash equivalents at beginning of period 1,438 1,749 (311) (18)
from continuing operations 3,962 3,986 (24) (1) Cash and cash equivalents at end of period 1,820 1,438 382 27
Cash flows from operating activities
from discontinued operations (2) (6) 4 67
Cash flows from operating activities 3,960 3,980 (20) (1)

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 93

Consolidated Statement of Changes in Equity

for the fiscal year ended 30 September 2023

Notes Share capital Capital Retained Other reserves Own shares Equity Equity Total equity
reserves earnings attributable to attributable to
Currency Hedges Cost of shareholders hybrid capital
effects hedging of Infineon investors
Technologies
€ in millions AG

Balance as of 1 October 2022 2,612 6,579 3,506 1,060 7 – (23) 13,741 1,203 14,944

Total comprehensive income (loss), net of tax

Profit (loss) for the period – – 3,098 – – – – 3,098 39 3,137
Other comprehensive income (loss), net of tax – – 17 (718) 9 (4) – (696) – (696)
Total comprehensive income (loss), net of tax – – 3,115 (718) 9 (4) – 2,402 39 2,441

Transactions with owners

Contributions by and distributions to owners
Dividends 20 – – (417) – – – – (417) – (417)
Share-based payment 20, 22 – 82 – – – – – 82 – 82
Disposal (purchase) of own shares 20 – – – – – – 10 10 – 10
Other contributions and distributions 20 – 23 – – – – – 23 – 23
Total contributions by and distributions to owners – 105 (417) – – – 10 (302) – (302)
Total transactions with owners – 105 (417) – – – 10 (302) – (302)

Transactions with hybrid capital investors

Compensations to hybrid capital investors 20 – – – – – – – – (39) (39)
Total transactions with hybrid capital investors – – – – – – – – (39) (39)

Balance as of 30 September 2023 2,612 6,684 6,204 342 16 (4) (13) 15,841 1,203 17,044

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 94

Consolidated Statement of Changes in Equity

for the fiscal year ended 30 September 2022

Notes Share capital Capital Retained Other reserves Own shares Equity Equity Total equity
reserves earnings attributable to attributable to
Currency Hedges Cost of shareholders hybrid capital
effects hedging of Infineon investors
Technologies
€ in millions AG

Balance as of 1 October 2021 2,612 6,513 1,407 (309) 3 – (28) 10,198 1,203 11,401

Total comprehensive income (loss), net of tax

Profit (loss) for the period – – 2,140 – – – – 2,140 39 2,179
Other comprehensive income (loss), net of tax – – 310 1,369 4 – – 1,683 – 1,683
Total comprehensive income (loss), net of tax – – 2,450 1,369 4 – – 3,823 39 3,862

Transactions with owners

Contributions by and distributions to owners
Dividends 20 – – (351) – – – – (351) – (351)
Share-based payment 20, 22 – 57 – – – – – 57 – 57
Disposal (purchase) of own shares 20 – – – – – – 5 5 – 5
Other contributions and distributions 20 – 9 – – – – – 9 – 9
Total contributions by and distributions to owners – 66 (351) – – – 5 (280) – (280)
Total transactions with owners – 66 (351) – – – 5 (280) – (280)

Transactions with hybrid capital investors

Compensations to hybrid capital investors 20 – – – – – – – – (39) (39)
Total transactions with hybrid capital investors – – – – – – – – (39) (39)

Balance as of 30 September 2022 2,612 6,579 3,506 1,060 7 – (23) 13,741 1,203 14,944

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 95
Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

The Infineon Group (“Infineon”), comprising Infineon Technologies AG (hereafter The fiscal year-end for both Infineon and the Company is 30 September of each year.
also referred to as “the Company”) and its direct and indirect subsidiaries, develops,
manufactures and markets a wide variety of semiconductors and semiconductor- The Group’s reporting currency is the euro (“€”).
based solutions. The focus is on the key markets: automotive as well as industrial and
consumer-related segments. The product portfolio ranges from standard components, Deviations between amounts presented are possible due to rounding. Negative
to special components for digital, analog and mixed-signal applications, as well as amounts are presented in parentheses.
customer-specific solutions, together with the appropriate software. Research and
development sites, manufacturing facilities, investments and customers are located The Company’s Management Board presented the Consolidated Financial Statements
mainly in Europe, Asia and North America. on 21 November 2023.

Infineon Technologies AG is a listed company under German law and the ultimate Financial reporting rules applied for the first time
parent company of Infineon. The principal office of the Company is Am Campeon 1–15, The IASB has issued the following Standards or amendments to Standards, which are
85579 Neubiberg (Germany). The Company is registered in the Commercial Register required to be applied in the Consolidated Financial Statements for the year ended
of the local court of Munich (Germany) under the number HRB 126492. 30 September 2023:

Standard/amendment/interpretation Effective date Impact on

1 Basis of the Consolidated Financial Statements Infineon
IAS 16 Property, plant and equipment – income before intended use 1 January 2022 none
(amendments to IAS 16)
The Consolidated Financial Statements for the year ended 30 September 2023,
IAS 37 Onerous contracts – costs of fulfilling a contract 1 January 2022 immaterial
prepared by Infineon Technologies AG as the ultimate parent company, have been (amendments to IAS 37)
prepared in accordance with International Financial Reporting Standards (“IFRS”) IFRS 3 References to the conceptual framework 1 January 2022 none
and related interpretations effective as of 30 September 2023 as issued by the Inter- (amendments to IFRS 3)
national Accounting Standards Board (“IASB”) to the extent to which the IFRS and Annual IFRS improvement cycle 2018 – 2020 1 January 2022 none
interpretations have been endorsed by the European Union (“EU”). The Consolidated
Financial Statements also comply with the supplementary requirements set out in
section 315e, paragraph 1 of the German Commercial Code (“Handelsgesetzbuch”
or “HGB”). The aforementioned standards were complied with in full.

The Consolidated Statement of Profit or Loss is presented using the cost of sales
method.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 96
Notes to the Consolidated Financial Statements

Financial reporting rules issued not yet applied 2 Summary of significant accounting policies
The following new or amended Standards have been issued by the IASB and will
be relevant to Infineon from today’s perspective. They have not been applied in the Basis of consolidation
Consolidated Financial Statements as of 30 September 2023 since they are not yet The Consolidated Financial Statements presented here include the individual financial
mandatory or, alternatively, have not yet been endorsed by the EU. The new or statements of Infineon Technologies AG and its direct and indirect subsidiaries on
amended Standards are applicable for fiscal years beginning on or after their respec- a consolidated basis. A subsidiary is defined as an entity, that is directly or indirectly,
tive effective date. As a general rule, they are not applied before their effective date, controlled by Infineon Technologies AG.
even if this is permitted for certain Standards.
Control exists when Infineon is subjected to variable returns arising from its engage-
Standard/amendment/interpretation Effective date Impact on ment with the subsidiary or has a right to such and has the ability to influence these
Infineon returns as a result of its power over the subsidiary. Power means that Infineon has
IAS 1 Classification of liabilities as current or non-current 1 January 2024 none existing rights that give Infineon the ability to direct the relevant activities of the
(amendments to IAS 1)
subsidiary, that is the activities that significantly affect the aforementioned returns.
IAS 1 Disclosure of accounting policies 1 January 2023 immaterial
(amendments to IAS 1 and IFRS Practice Statement 2)
IAS 7 and Supplier finance arrangements 1 January 2024 none
An entity is included in the Consolidated Financial Statements from the date on
IFRS 7 (amendments to IAS 7 and IFRS 7) which Infineon acquires control. Upon first-time consolidation of an entity, the
IAS 8 Definition of accounting estimates (amendments to IAS 8) 1 January 2023 none acquired assets and assumed liabilities are basically measured on the basis of their
IAS 12 Deferred tax relating to assets and liabilities arising from 1 January 2023 none fair value at the acquisition date. Any excess of consideration paid (purchase price)
a single transaction (amendments to IAS 12) over the share of the fair value of acquired assets, liabilities and contingent liabilities
IAS 12 International tax reform – pillar two model rules 1 January 2023 immaterial is recognized as goodwill. Any excess of Infineon’s share of the fair value of items
(amendments to IAS 12)
acquired over consideration paid is, after re-examination, recognized as a gain.
IFRS 16 Lease liability in a sale and leaseback (amendments to IFRS 16) 1 January 2024 none
IFRS 17 Insurance contracts including amendments to IFRS 17 1 January 2023 none
The financial statements of entities included in the Consolidated Financial Statements
IAS 21 Lack of exchangeability (amendments to IAS 21) 1 January 2025 none
are prepared using uniform valuation and accounting policies.

Individual provisions of the amendments to IAS 12 (International tax reform – pillar The balance sheet effects of intragroup transactions as well as gains and losses
two model rules) published on 23 May 2023 are in principle applicable retrospectively arising from intragroup business relationships are eliminated on consolidation.
for the prior fiscal year as a result of the adoption by the EU on 8 November 2023.
No deferred taxes in connection with pillar two income taxes were recorded.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 97
Notes to the Consolidated Financial Statements

A list of subsidiaries of Infineon Technologies AG is provided in note 30. p. 165 ff. Recognition and measurement principles

In the absence of control over an entity, but where the entity is a joint venture or an Cash and cash equivalents
associated company, this is included in the Consolidated Financial Statements using Cash and cash equivalents represent cash and all financial resources with a maturity
the equity method (see note 5, p. 110 f.). Where objective indications of impairment at acquisition date of three months or less. Cash equivalents partly include invest-
in the carrying amount of an equity-based investment are present, an impairment test ments in money market funds. The valuation is recorded at amortized acquisition cost
is carried out. If the carrying amount exceeds the recoverable amount, an impairment or at fair value through profit or loss.
loss is recognized in financial expenses.
Financial instruments
Functional currency and foreign currency translation Financial instruments are initially recognized at their fair value. Transaction costs
The functional and reporting currency of Infineon Technologies AG is the euro. directly attributable to the acquisition or issuance of financial instruments are only
included in the carrying amount if the financial instruments are not measured at fair
Foreign currency transactions of subsidiaries are translated into the functional value through profit or loss.
currency of the relevant entity using the spot rate prevailing at the transaction date.
Monetary foreign currency assets and liabilities are translated at the spot rate Trade receivables are recognized based on the amount to which Infineon has an
prevailing at the reporting date. Exchange rate gains and losses from the translation unconditional right to receive. With the exception of matters that result in a partial
of foreign currency transactions are recognized in the Consolidated Statement of refund of the purchase price to the customer, this corresponds to the transaction
Profit or Loss. price determined in accordance with IFRS 15. The subsequent measurement of trade
receivables is carried out at amortized cost.
The assets and liabilities of subsidiaries with functional currencies other than the
euro are translated into euros for consolidation purposes using the spot rate at the Purchases and sales of financial assets are recognized on the settlement date.
end of the reporting period. Income and expenses of these entities are translated
using the average spot rate of the reporting period. All currency translation differences Financial assets are derecognized when the rights to receive payments from the
are recognized directly in equity and presented as “Other reserves”. investments have expired or have been transferred and Infineon has transferred all
risks and rewards associated with ownership. Financial liabilities are derecognized
when they are extinguished, that is, when the contractual obligation is discharged,
canceled, or expired.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 98
Notes to the Consolidated Financial Statements

Financial assets losses, impairments, and gains or losses from the derecognition of such financial
› Classification and measurement of financial assets assets are recognized through profit or loss.
Upon initial recognition, financial assets are classified for subsequent measurement
either as at amortized cost, fair value through other comprehensive income or fair As of the reporting date, Infineon did not hold any financial assets with the intention
value through profit or loss. This classification depends on the characteristics of to collect contractual cash flows and sell them. Therefore, there was no allocation
the contractual cash flows of the financial assets and Infineon’s business model for of financial assets in the form of debt instruments to the category “fair value through
managing its financial assets. other comprehensive income”.

Infineon’s business model for managing financial asset portfolios reflects how the Financial assets in the form of debt instruments that are measured at fair value
company controls its financial assets in order to generate cash flows. Depending through profit or loss include all financial assets of Infineon whose cash flows are not
on the business model, cash flows arise from the receipt of contractual cash flows, solely payments of principal and interest.
the sale of financial assets or both.
At Infineon, financial assets in the form of equity instruments are consistently
In order for a financial asset in the form of a debt instrument to be classified and measured at fair value through profit or loss.
measured at amortized cost or at fair value through other comprehensive income,
cash flows may only arise from the repayment of principal and interest payments on Net gains and losses, including interest and dividend income, from financial assets
the outstanding principal amount. This assessment is referred to as a cash flow or that are measured at fair value through profit or loss (debt and equity instruments)
SPPI test (“solely payments of principal and interest”) and is carried out at the level are recognized in the Consolidated Statement of Profit or Loss.
of the individual financial instrument.
“Designated hedging instruments (cash flow hedges)” also belong to financial assets.
On this basis, Infineon’s financial asset measurement categories are as follows:
› Impairment of financial assets
Financial assets measured at amortized cost include all assets whose contractual Infineon determines an allowance for expected credit losses for financial assets in
provisions result in cash flows at fixed times that represent only interest and repay- the form of debt instruments that are measured at amortized cost or at fair value
ments of the outstanding principal amount, provided that those assets are held with through other comprehensive income. The calculation of the expected future credit
the intention of collecting the contractual cash flows expected over their respective losses is generally determined by multiplying the probability of default by the carry-
duration. In subsequent periods, financial assets measured at amortized cost are ing amount of the financial asset (exposure at default) and the expected loss ratio
measured using the effective interest method. Interest income, currency gains and (loss given default).

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 99
Notes to the Consolidated Financial Statements

Infineon determines allowances for expected credit losses primarily for cash and In the case of objective indications that expected future cash flows are affected, a
cash equivalents, financial investments, trade receivables, and contract assets. The financial asset is classified as credit-impaired and adjusted to its individual value. As
expected credit losses are adjusted at each reporting date to reflect changes in credit a rule, this is the case for financial assets (unless it is a trade receivable) no later than
risk since the instrument was first recognized. 90 days after the due date. Trade receivables are not automatically determined as
credit-impaired in the event of a payment overdue by more than 90 days but always
For cash and cash equivalents and financial investments measured at amortized cost, on the basis of the individual assessment of credit management.
Infineon determines credit losses expected in the next twelve months (twelve-month
expected credit loss) in accordance with the general approach. Due to their short-term A default event occurs when Infineon concludes that the other party would most
maturity, this corresponds to the lifetime expected credit losses. Infineon rates the likely not be able to meet the payment obligations, or not in full.
credit risk for cash and cash equivalents and financial investments as low. Infineon
assumes that a financial asset has a low credit risk if it has an investment grade rating Financial assets are partly or completely written off, together with previously
or a corresponding internal investment grade rating. In order to assess whether recognized impairments, if there is no reasonable expectation of repayment. This is
there has been a significant increase in credit risk since initial recognition, Infineon generally the case when Infineon finds that the debtor does not have assets or revenue
considers appropriate and robust information that is relevant and available without sources that could generate sufficient cash flows to repay the amounts subject to
disproportionately high levels of effort. This includes both quantitative and qualitative derecognition. Even when financial assets are written off, Infineon continues to con-
information and analyses, which are based on the company’s historical experience duct enforcement measures to recover them. Amounts recovered are recognized in
and a sound credit assessment as well as forward-looking information. Macroeconomic profit or loss.
information is taken into account in the internal rating model (information on Infineon’s
financial risk management is included in note 28, p. 150 ff.). Irrespective of the Financial liabilities
above analysis, a significant increase in credit risk is assumed if a debtor is more Infineon classifies financial liabilities into the following categories: “Financial liabili-
than 30 days overdue with the settlement of a contractual payment. ties measured at fair value through profit and loss” and “Other financial liabilities”.
Furthermore, “Designated hedging instruments (cash flow hedges)” belong to financial
For trade receivables and contract assets, Infineon recognizes lifetime expected liabilities.
credit losses using a simplified approach. The estimate of expected credit losses on
trade receivables and contract assets is based primarily on the analysis of customer Liabilities measured at fair value through profit or loss by Infineon include derivatives
financial data, ratings, credit default spreads, past payment behavior of customers to hedge currency risks for which hedge accounting is not applied.
and forward-looking information.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 100
Notes to the Consolidated Financial Statements

Upon initial recognition, other financial liabilities are measured at fair value after the Hybrid bonds
deduction of transaction costs. In subsequent periods, they are measured at amor- The recognition of a hybrid bond depends on the specific form of the instrument.
tized cost using the effective interest method. The liabilities are derecognized when A hybrid bond is measured and recognized in equity when certain conditions are
the contractual obligations are discharged, canceled or expired. jointly met. These include, but are not limited to, the fact that the hybrid bond has no
final maturity date, the investors have no rights of termination, and the distributions
Designated hedging instruments (cash flow hedges) are made at Infineon’s discretion. In this case, discounts, transaction costs, tax effects
Certain derivative financial instruments are used to hedge foreign currency and and the remuneration of hybrid investors are deducted directly from equity.
interest risks or risks of commodity price changes (such as gold prices) for firm
commitments as well as expected and highly probable future transactions in order to Inventories
minimize the associated risk (cash flow hedges). Inventories are measured at the lower of historical acquisition or fully absorbed
production cost – calculated using the weighted-average method – and net realizable
Derivative financial instruments are measured at their fair value and included in value. Net realizable value corresponds to realizable sale proceeds under normal
“other current assets” or “other current liabilities”. business conditions less estimated expected costs to complete and sell. Production
cost comprises costs of material, production wages and an appropriate portion of
The effective portion of changes in the fair value of derivative financial instruments, attributable overheads, along with attributable depreciation and amortization on
determined in accordance with IFRS 9, that are designated as cash flow hedges property, plant and equipment and other intangible assets. Overhead mark-ups are
and are part of hedging relationships that meet the criteria for hedge accounting is determined on the basis of normal capacity utilization levels.
recognized directly in equity. The gain or loss relating to the ineffective portion is
recognized in profit or loss. Amounts accumulated in equity are recycled in profit or Write-downs to net realizable value are recorded on inventories using a consistent
loss in the periods in which the underlying hedged item affects profit or loss, or, if the approach throughout Infineon and are determined at product level for technically
expected transaction subsequently results in the recognition of a non-financial asset, obsolete and slow-moving inventories on the basis of the amount of revenues
included in the acquisition cost upon initial recognition. expected to be generated by the relevant product.

When a hedging instrument expires or is sold, or when a hedging relationship no Inventories include an asset resulting from sales with a right of return, representing
longer meets the criteria for hedge accounting, any cumulative gain or loss existing at Infineon’s right to recover products from customers upon payment of the reimburse-
that time remains in equity until the underlying transaction actually occurs. When a ment obligation (see “Revenue recognition”, p. 104 f.). The valuation is made by
forecasted transaction is no longer expected to occur, the cumulative gain or loss that reference to the previous book value of the products.
was reported in equity is immediately transferred to profit or loss.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 101
Notes to the Consolidated Financial Statements

Contract assets Other intangible assets

Contract assets are recognized if Infineon has fulfilled its performance obligations Other intangible assets consist of capitalized development costs and purchased
arising from contracts with customers and an unconditional entitlement to customer intangible assets, for example licenses, technologies and customer relationships.
consideration does not yet exist. These assets have finite useful lives and are valued at their amortized acquisition
or production costs, with amortization recorded using the straight-line method over
At Infineon, contract assets result from revenue arising from over time revenue recog- their expected economic life.
nition for certain types of contracts, as well as from sales to some customers for
whom Infineon maintains a consignment warehouse and where revenue is recorded Amortization of other intangible assets is based on the following useful lives:
at the time of delivery to the consignment warehouse, whereas the invoice is only Years
issued at the time of withdrawal of the product by the customer. Capitalized development costs 3 – 10
Customer relationships 1 – 12
Loss allowances for expected credit losses on contract assets are determined in Technologies 1 – 12
accordance with the measurement method for trade receivables (see “Financial Licenses and similar rights 3–5
instruments”, p. 97). Remaining other intangible assets 3 – 12

Property, plant and equipment

Property, plant and equipment are measured at amortized acquisition or construction Infineon did not hold any intangible assets with indefinite useful lives in either the
cost, and their value is reduced by depreciation and considering any impairment. 2023 or the 2022 fiscal year.

Depreciation on property, plant and equipment is recorded using the straight-line Recoverability of property, plant and equipment and intangible assets
method. Land, property rights and construction in progress are not depreciated (including goodwill)
on a scheduled basis. Depreciation on property, plant and equipment is based on Infineon reviews non-current assets, including property, plant and equipment,
the following useful lives, as applied consistently throughout Infineon: goodwill and other intangible assets for possible impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be
Years recoverable. Regardless of whether an indication of impairment exists, goodwill and
Buildings 25 other intangible assets, including capitalized development costs not yet subject to
Technical equipment and machinery 3 – 10 amortization, undergo an annual impairment test (see also “Research and develop-
Other plant and office equipment 1 – 10 ment expenses”, p. 105). The impairment test for goodwill is carried out annually
at the operating segment level.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 102
Notes to the Consolidated Financial Statements

The recoverability of an asset is measured by comparing its carrying amount with In the case of property, plant and equipment or other intangible assets, if the recover-
its recoverable amount. To the extent it is not possible to determine the recoverable able amount of a CGU is less than its carrying value, the impairment loss is allocated
amount of an individual asset, the book value of the cash generating unit to which pro rata to the assets within the scope of IAS 36. An impairment loss recognized in
the asset is allocated is compared to its recoverable amount. prior periods for property, plant and equipment or other intangible assets is reversed
insofar as, since the last impairment, a change in the underlying assumptions has
A cash generating unit (“CGU”) represents the smallest identifiable group of assets occurred, which leads to a lower impairment requirement. The maximum possible
that generates cash inflows from continuing activities and that are largely independent reversal of an impairment loss is that which would lead to the carrying amount that
of the cash inflows from other assets or group of assets. would have been determined (net of scheduled depreciation and amortization) if
no impairment loss had been recognized for that asset in prior years. The reversal of
Goodwill arising in connection with a business combination is allocated to the CGUs impairments recognized on goodwill in subsequent periods is not permitted.
or groups of CGUs that will benefit from the synergies generated by the business
combination and the going concern element of the business operations acquired. Leased assets
IFRS 16 defines a lease as a contract that conveys the right to use an identifiable asset
The recoverable amount of an asset is defined as the higher of its fair value less costs over a specified period of time in exchange for consideration.
to sell and its value in use. The value in use is calculated based on discounted future
cash flows. Considerable management judgment is necessary to estimate future At the beginning of a lease, Infineon capitalizes a right-of-use asset at amortized
cash flows. acquisition cost and recognizes as a liability a corresponding lease liability, using the
present value of the outstanding lease payments. Right-of-use assets are amortized
If an asset or CGU is considered to be impaired, the impairment recognized is measured on a straight-line basis over the expected useful life (see “Property, plant and equip-
as the amount by which the carrying value exceeds the recoverable amount. ment”, p. 101), or over the duration of the contract if shorter. In subsequent valua-
tions, lease liabilities are measured at the current value of the outstanding lease
Goodwill is impaired when the carrying amount of the operating segment to which payments using the effective interest method and are presented as lease liabilities
goodwill is allocated exceeds the recoverable amount of that unit. (current and non-current).

If the carrying amount of the respective operating segment to which goodwill The costs associated with leasing agreements with a term of not more than twelve
is allocated exceeds the recoverable amount of this CGU, the goodwill is impaired months (provided they do not contain an option to purchase), as well as leasing
accordingly. agreements in which the value of the underlying asset in the leasing contract is low,
are recorded in the profit or loss on a straight-line basis in the functional costs. As
a general rule, leased assets with an acquisition cost of up to €5,000 are defined as
low-value assets.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 103
Notes to the Consolidated Financial Statements

Defined benefit pension plans With regard to legal proceedings and litigation, for example, those connected with the
The net pension obligation recognized with respect to defined benefit pension plans Qimonda insolvency, Infineon regularly assesses the probability of an unfavorable
comprises the present value of the defined benefit obligation (DBO) at the end of the outcome. Infineon records provisions and liabilities, including provisions for signifi-
reporting period less the fair value of the plan assets. The present value of the DBO cant legal costs, for those obligations and risks relating to legal disputes which it
and the resulting pension expense are determined annually in accordance with IAS 19 assesses at the relevant reporting date are likely to occur. That is where, from Infineon’s
“Employee Benefits” for each separate plan by independent, qualified actuaries perspective as of the date of assessment, there is compelling evidence that indicates
using the projected unit credit method. The calculation is subject to, among other an obligation or risk, and the obligation or risk can be quantified with reasonable
things, assumptions on increases in salaries, future developments in pensions as well accuracy at the time of assessment. As soon as additional information is available,
as the life expectancy of the beneficiaries. As of the balance sheet date, the obligations the affected estimates are reviewed and, where necessary, provisions for these pro-
are discounted using discount rates determined primarily on the basis of market ceedings are revised.
yields of high-grade, fixed-interest corporate bonds from issuers carrying a very high
credit rating. Other provisions are measured at their expected settlement amount. The amount
recognized for a provision is the best estimate of the expenditure required to settle
All items of income and expense relating to defined benefit plans, with the exception the present obligation. Estimates of outcomes and financial effects are dependent
of the net interest result, are recognized on a net basis in the functional costs within upon the judgment of management, supplemented by experience gained from similar
the operating result. The net interest result arising from the multiplication of the transactions and, where appropriate, the assessment of independent experts. If the
net pension obligation (pension obligation less plan assets) by the discount rate is circumstances to be assessed encompass a large number of possible outcomes,
presented as a financial expense. Actuarial gains and losses arising from changes to the obligation is estimated by weighting all possible outcomes by their associated
actuarial assumptions and estimates as well as the difference between the normal- probabilities (expected value method).
ized and actual return on plan assets are recognized directly in equity and recorded
in the Consolidated Statement of Comprehensive Income in the periods in which they Where cash flows are expected to arise after the next twelve months, the expected
arise. Past service costs are recognized immediately in profit or loss. settlement amount corresponds to the present value of the expected cash outflows.
Discounting is only carried out if the interest effect is significant.
Other provisions
Other provisions are recognized for present legal and/or constructive obligations If the obligation decreases because of a change in the estimate, the provision is
arising from past events that are likely to result in a future outflow of resources, the adjusted accordingly and the resulting income recognized in the same functional
amount of which can be reliably estimated. cost area of the Consolidated Statement of Profit or Loss in which the original charge
was recognized.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 104
Notes to the Consolidated Financial Statements

Contingent liabilities Invoices for sales of products are issued at the time of delivery or withdrawal by
Contingent liabilities are either possible obligations whose actual existence is depen- the customer from the consignment warehouse and have a short payment term.
dent on the occurrence of one or more uncertain future events not wholly within The amount of revenue corresponds to the expected transaction price to be settled
Infineon’s control, or they are present obligations that will probably not result in the by the customer.
outflow of resources or whose outflow of resources cannot be quantified reliably.
Contingent liabilities are not recognized in the Statement of Financial Position, instead The transaction price can include variable components such as rebates or discounts.
they are disclosed in the Notes to the Consolidated Financial Statements (see note 23, Infineon can reliably estimate these in accordance with the contractual agreements
p. 135 f., and note 24, p. 136 ff.). and historical experience. Variable consideration is only taken into account in so
far as it is highly probable that there will be no significant reversal of the revenue.
Revenue recognition If Infineon expects that the consideration received from the customer is to be partially
Infineon generates revenues mainly from the sale of semiconductor products, related reimbursed due to subsequent discounts, a reimbursement obligation is recognized
system solutions and relevant software. Revenue is recognized when control over the as a reduction to revenue, and is disclosed within other current liabilities.
products is transferred to the customers in accordance with IFRS 15 (power of disposal),
and where the receipt of consideration from the customer is probable. Typically, Infineon recognizes revenue for deliveries to distributors by using the “sell in” method,
Infineon’s customer contracts only contain one performance obligation which is ful- that is, when a product is delivered, to the extent that revenue has not already been
filled either over a period of time or at a specific point in time, with fulfillment at a recognized over time. The transaction price for sales to distributors, in particular,
specific point in time being the far more common case. For sales of customer-specific contains variable components. In accordance with established business practices in
products with no alternative use for Infineon, for which Infineon has a legal right to the semiconductor industry, distributors can request price adjustments under certain
payment for services rendered prior to delivery, revenue is recognized over time. Per- circumstances. This allows distributors to receive a credit (debit) note for unsold
formance progress is determined using an input-based method and is based on the products held in inventory, where Infineon has reduced (increased) the standard list
ratio of costs already incurred to the estimated total cost. If product revenue is not price of certain products. In addition, in certain cases and for certain products, dis-
recognized over time, then it is generally recognized upon delivery. The recognition tributors may request what is referred to as a ship and debit credit note. As with all
of revenue for deliveries into consignment warehouses depends on the individual product sales, Infineon recognizes revenue based on the transaction price and records
contractual arrangement. Revenue recognition at the point of delivery into the con- an obligation for the estimated consideration to be reimbursed to the customer during
signment warehouse takes place in cases where the customers gain contractual the period in which the relevant revenue is recognized. In the case of price adjustments
power of control over the products at the point of delivery. Accordingly, in such cases, and ship and debit, the determination of the transaction price, and thus also the
a contract asset is recorded. Otherwise, revenue is recognized when the products are refund obligation, is based on rolling historical price trends in the difference between
withdrawn by the customer. contract prices and standard list prices to the distributors. The refund liability is
disclosed as part of other current liabilities.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 105
Notes to the Consolidated Financial Statements

Distributors can, subject to certain conditions, return a limited amount of inventory Research and development expenses
(stock return) or request scrap allowances. The estimation of the transaction price is Costs of research activities are expensed as incurred. Costs for development activities
based on the expected stock returns in accordance with the contractual agreement, are capitalized if the results lead to a plan or design for the production of new or sub-
combined with historical experience. Distributor scrap allowances are taken into stantially improved products or for improved production processes. Capitalization
account based on the contractual agreement when determining the transaction price requires that the development costs can be measured reliably, the product or process
and, upon submission of a valid claim, are granted up to a certain maximum based is technically and commercially feasible, and future economic benefits are probable.
on turnover in a given period. Infineon monitors such product returns on an ongoing In addition, Infineon must intend, and have the ability, to complete development and
basis and adjusts estimate assumptions accordingly. In the case of stock returns and use or sell the asset. The costs capitalized include the cost of materials, direct labor
scrap allowances, the consideration to be refunded to the customer is recognized as and directly attributable general overhead expenses that serve to prepare the asset
a reimbursement obligation within other current liabilities. Other returns are only for use. Such capitalized costs are presented as internally generated intangible assets
permitted for quality defects within the ordinary warranty period. These obligations within “Other intangible assets” (see note 13, p. 118 f.). Development costs, that
are taken into consideration through corresponding warranty provisions. do not fulfill the criteria for capitalization, are expensed as incurred. Capitalized
development costs are stated at cost less accumulated amortization and impairment
The additional costs to obtain a contract are immediately recognized as an expense charges.
as soon as they arise, providing the otherwise resulting depreciation period would
not exceed one year. Costs to fulfill a contract are capitalized at the earliest when an Grants
expected, specifically identifiable contract exists. Grants are recognized when it is reasonably assured that Infineon will comply with
the conditions attached to the grant, and it is reasonably assured that the grant
Cost of goods sold will be received. Investment-related grants are deducted from the purchase and pro-
Cost of goods sold includes the manufacturing costs of products sold during the duction cost of the related asset and thereby reduce depreciation and amortization
reporting period. In addition, cost of goods sold contains idle costs, inventory risks, expense in future periods.
the cost of warranty cases, as well as the amortization of capitalized development
costs. Recognized currency translation effects, as well as changes in the fair value of Grants that are related to expenses are presented as a reduction of the related
undesignated derivative financial instruments that are connected to the operating expense in the Consolidated Statement of Profit or Loss (see note 4, p. 109 f.).
business, are recognized in cost of goods sold.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 106
Notes to the Consolidated Financial Statements

Current and deferred taxes Taxes are recognized in the Consolidated Statement of Profit or Loss, with the
The current tax expense is calculated in accordance with taxation provisions in force exception of taxes relating to items recognized directly in equity or in other compre-
at the end of the reporting period. hensive income.

Deferred taxes are calculated on temporary differences between the tax base and Tax liabilities are recognized as short-term as they are due immediately, and Infineon
the book value of assets and liabilities and on tax losses available for carry-forward generally has no option of deferring their due date.
and tax allowances. By contrast, generally no deferred tax is recognized on initial
recognition of goodwill arising in connection with a business combination. Similarly, For uncertain tax positions, a current tax liability is recorded; in the case of a tax
deferred taxes are not recognized on the initial recognition of an asset or liability in loss carried forward or a tax allowance, the respective deferred tax asset is reduced
connection with a transaction that is not a business combination and which, at the accordingly. Estimates and assumptions must be made for the recognition and
time of the transaction, affects neither the pre-tax income according to IFRS nor tax- valuation, for example, whether an assessment is made separately or together with
able profit. Deferred tax assets and liabilities are measured using applicable tax rates other uncertainties, whether a probable or expected value is used for the uncertainty,
and laws that have been enacted by the end of the reporting period or are about and whether changes have occurred compared to the previous period. The detection
to be enacted and are to be applied when the related deferred tax asset is realized, risk for the recognition of uncertain tax positions is not relevant. Recognition assumes
or the deferred tax liability is settled. that the tax authorities investigate the matters in question and that they have all
relevant information.
Deferred tax assets with respect to deductible temporary differences, tax loss
carry-forwards and tax allowances that exceed deferred tax liabilities in respect of Estimates and assumptions
taxable temporary differences, are only recognized to the extent that it is probable The preparation of financial statements in accordance with IFRS requires management
that the relevant Group entity can generate sufficient taxable profit to realize the to make estimates and assumptions that have an impact on the presented amounts
corresponding benefit. Infineon reviews deferred tax assets for impairment at every and the associated disclosures.
reporting date. The assessment requires management to make assumptions about
future taxable profits as well as other positive and negative influencing factors. This Estimates and assumptions are subject to regular review and must be adjusted where
assessment also takes into account insights from the company’s five-year plan as appropriate. Climate risks and opportunities are also analyzed, reported, and evalu-
approved in the fiscal year just ended. ated for their potential financial and accounting impact as part of the quarterly risk
management process. They are regularly included in the review of estimates and
Deferred tax assets and liabilities are netted to the extent they relate to the same tax assumptions for accounting purposes. Furthermore, in the case of valuations based
authority and to the same taxpayer or a group of different taxpayers who are jointly on longer-term planning assumptions for business development, sensitivity analyses
assessed for income tax purposes. of the valuation results are carried out, which appropriately reflect the potential

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 107
Notes to the Consolidated Financial Statements

impact of climate change on the valuation results. For a detailed explanation of › valuation of inventory (see “Inventories”, p. 100, and note 11, p. 117),
climate-related risks and opportunities, we refer you to the risk and opportunity
report in the Combined Management Report as well as to the report “Sustainability › r ecoverability of non-financial assets, in particular property, plant and equipment
at Infineon” which can be found under the following link: www.infineon.com/cms/en/ (see note 13, p. 118 f.) and goodwill (see note 14, p. 120 f.),
about-infineon/sustainability/csr-reporting. The reference to the report “Sustainability at
Infineon” is not audited as part of the audit of the Consolidated Financial Statements › r ecognition and valuation of provisions (see “Other provisions” notes 17, p. 124,
but is subject to a separate audit to obtain limited assurance and for certain non- and 24, p. 136 ff.) and
financial information reasonable assurance.
› r evenue where the transaction price contains a variable element (see “Revenue
Assumptions and estimates regarding cyclical market, industry, and geopolitical recognition”, p. 104 f.).
risks are made to the best of management’s knowledge based on current events
and actions. Actual results may deviate from these estimates. This is especially true All assumptions and estimates are based on the circumstances and assessments
against the backdrop of the geopolitical risks that continue to exist, particularly due as of the balance sheet date, taking into account the knowledge gained up to the
to the ongoing war in Ukraine, the conflict over Taiwan, and tensions in the Middle approval by the Management Board of the Consolidated Financial Statements on
East. The war in Ukraine can lead to further price increases and shortages of energy 21 November 2023.
and raw materials. An extension of the conflict situation beyond Ukraine would
further increase the risk of a global economic downturn. Rising inflation and higher
interest rates could also lead to a significant decline in consumption. Both customs 3 Acquisitions
disputes and trade restrictions, for example between the USA and China, can affect
global trade and thus global economic growth, and include the risk of a decline in Acquisition of 100 percent of the shares in GaN Systems Inc.
foreign demand from the Chinese perspective and an accompanying decline in the On 24 October 2023, Infineon acquired all of the shares in GaN Systems Inc. (“GaN
Chinese gross domestic product. There is also the risk that semiconductors previously Systems”), which is based in Ottawa (Canada). GaN Systems develops GaN-based
supplied to China will increasingly be replaced by locally manufactured products, power conversion solutions. With this acquisition, Infineon strengthens its leading
and of growing exports of such semiconductors produced in China. Developments position in the power systems sector. The provisional purchase price is €828 million,
in the wake of the geopolitical risks are dynamic, so it cannot be ruled out that the of which €825 million resulted in a cash outflow at the time of acquisition, and a
actual results deviate significantly from the estimates and assumptions made in the further €3 million will be paid later to former shareholders under a terminated stock
preparation of these Consolidated Financial Statements, or that the estimates and option program. According to the preliminary opening balance sheet, the net assets
assumptions made will have to be adjusted in future periods. These could have a sig- acquired by the Company amounted to €57 million. The acquired assets mainly relate
nificant impact on Infineon’s financial position, results of operations and cash flows. to cash, inventories, rights of use under leasing arrangements, and property, plant
and equipment. Acquired liabilities primarily relate to trade payables and leasing
Areas containing estimates and assumptions and that are consequently most likely to liabilities. The estimated excess of purchase price over assets acquired is around
be affected when actual results vary from estimates and assumptions are the following: €771 million. The purchase price allocation was not yet completed at the time of

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 108
Notes to the Consolidated Financial Statements

preparing the Consolidated Financial Statements, so the preliminary results are 4 Notes to the Consolidated Statement
not yet available. The excess purchase price is expected to be primarily attributable of Profit or Loss
to goodwill and, downstream, to technologies and customer relationships. Due to the
proximity of the acquisition to the date of preparation of the Consolidated Financial Revenue
Statements and the resulting insufficient information, other disclosures required by Breakdowns of revenue by segments, product groups and geographic areas are
IFRS 3 cannot be made. disclosed in note 29. p. 156 ff.

Acquisition of Imagimob AB and 3db Access AG The aggregate amount of the transaction prices of the unsatisfied and partially
On 15 May 2023, Infineon acquired Imagimob AB in full. The startup, based in Stock- unsatisfied performance obligations, arising from contracts with customers within
holm (Sweden), is a platform provider for Machine Learning solutions for edge devices. the meaning of IFRS 15 with original expected durations of more than one year, was
Infineon further advances its position as a provider of machine learning solutions as follows as of 30 September 2023 and 2022:
with this acquisition and, once again, significantly supplements its artificial intelli-
Total Less than 1 year
gence offering. Revenue expected in (€ in millions) 1 year and after
As of 30 September 2023 4,111 1,804 2,307
On 4 October 2023, Infineon also acquired all shares in the startup 3db Access AG, As of 30 September 2022 1,257 488 769
based in Zurich (Switzerland). The startup is a pioneer in secured low power
ultra-wideband technology. The acquisition strengthens Infineon’s portfolio of
secure and intelligent access control, precise localization and enhanced sensing. The increase in expected revenue is mainly due to capacity reservation agreements.

The last two acquisitions mentioned have only minor or no financial impacts during Infineon refrains from disclosing the remaining performance obligations arising
the reporting period, therefore no further disclosures in accordance with IFRS 3 from contracts with customers within the meaning of IFRS 15 with original expected
are required. durations of one year or less.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 109
Notes to the Consolidated Financial Statements

Cost of materials and purchased services as well as Change

personnel expenses 2023 2022 absolute in %

The Consolidated Statement of Profit or Loss includes the following expenses for Europe 23,536 21,703 1,833 8
materials, purchased services, and personnel: therein: Germany 14,609 13,687 922 7
Asia-Pacific (excluding Japan, Greater China) 25,191 23,762 1,429 6
Change
Greater China 1 3,024 2,698 326 12
€ in millions 2023 2022 absolute in % therein: Mainland China, Hong Kong 2,611 2,313 298 13
Cost of raw materials, supplies Japan 670 653 17 3
and purchased goods 3,372 2,788 584 21
Americas 5,241 5,470 (229) (4)
Cost of purchased services 3,749 3,433 316 9
therein: USA 3,734 3,908 (174) (4)
Total 7,121 6,221 900 14
Total 57,662 54,286 3,376 6

1 Greater China comprises Mainland China, Hong Kong and Taiwan.

Change

€ in millions 2023 2022 absolute in %

Wages and salaries 3,684 3,544 140 4 Grants
Social insurance levies and employee benefits 600 555 45 8 Infineon has received grants from various governmental institutions under government
Expenses for pensions 69 71 (2) (3) business development programs, including grants for the construction of manufac-
Total 4,353 4,170 183 4 turing facilities, research and development activities and employee development.
Grants included directly in profit or loss in the Consolidated Financial Statements
during the 2023 and 2022 fiscal years were as follows:
The average number of employees by geographic region was as follows for the 2023 Change
and 2022 fiscal years:
€ in millions 2023 2022 absolute in %
Included in the Consolidated Statement
of Profit or Loss in:
Cost of goods sold 75 61 14 23
Research and development expenses 130 113 17 15
Selling, general and administrative expenses 3 2 1 50
Total 208 176 32 18

Of the grants included in profit or loss in the 2023 fiscal year, €3 million relate to
expenses incurred in the prior year (prior year: €0 million).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 110
Notes to the Consolidated Financial Statements

In the 2023 fiscal year, investment grants of €45 million (adjusted previous fiscal 5 Investments accounted for using
year amount: €22 million) were deducted from acquisition or construction costs for the equity method
property, plant and equipment and intangible assets. In the 2023 fiscal year, Infineon
received investment grants of €27 million (2022: €22 million). The investments accounted for using the equity method comprise shares in joint
ventures and in associated companies.
For compliance with the conditions attached to the grants received and potential
repayment requirements in case of nonfulfillment, see note 23. p. 135 f. Summarized financial information for joint ventures
As of 30 September 2023 and 2022, the carrying amounts of joint ventures accounted
Financial income and expenses for using the equity method were €74 million and €56 million, respectively.
Financial income comprised the following in the 2023 and 2022 fiscal years:
For the 2023 and 2022 fiscal years, Infineon’s proportion of selected items from the
Change statement of comprehensive income of the joint ventures accounted for using the
€ in millions 2023 2022 absolute in %
equity method were aggregated as follows:
Change
Interest income 60 11 49 +++
Other financial income1 45 (4) 49 +++ € in millions 2023 2022 absolute in %

Total 105 7 98 +++ Profit (loss) for the period 28 29 (1) (3)
Other comprehensive income (loss), net of tax – 3 (3) –––
1 The negative amount in other financial income in the 2022 fiscal year arose from the negative change in the fair value of the
derivative financial instruments, recorded as a reversal of unrealized gains recognized in previous fiscal years. Total comprehensive income (loss), net of tax 28 32 (4) (13)

Financial expenses comprised the following in the 2023 and 2022 fiscal years: The pro rata result of the joint ventures accounted for using the equity method is not
part of the Segment Result (see note 29, p. 159).
Change

€ in millions 2023 2022 absolute in %

Interest expenses (158) (142) (16) (11)
Other financial expenses (1) (26) 25 96
Total (159) (168) 9 5

Further information on Infineon’s financial income and expenses is contained in

note 27. p. 146 f.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 111
Notes to the Consolidated Financial Statements

Summarized financial information for associated companies The German combined statutory tax rate for Infineon Technologies AG was 28 percent
As of 30 September 2023 and 2022, the carrying amount of the associated companies for both the 2023 and 2022 fiscal years. This is based on a corporate income tax rate of
accounted for using the equity method was €40 million and €44 million, respectively. 15 percent, plus a solidarity surcharge of 5.5 percent and a trade tax rate of 12 percent.

For the 2023 and 2022 fiscal years, Infineon’s proportion of selected items from the Taxable income earned by foreign subsidiaries is determined on the basis of the
statement of comprehensive income of the associated companies accounted for tax laws applicable in the relevant countries and is taxed based on the respective
using the equity method were aggregated as follows: country-specific tax rates.
Change

€ in millions 2023 2022 absolute in %

The reconciliation of income taxes from continuing operations for the fiscal years
ended 30 September 2023 and 2022, based on the German combined statutory income
Profit (loss) for the period (1) 10 (11) –––
tax rate of 28 percent for the 2023 and 2022 fiscal years, is as follows:
Other comprehensive income (loss), net of tax – – – –
Total comprehensive income (loss), net of tax (1) 10 (11) –––
Change

€ in millions 2023 2022 absolute in %

The pro rata result of the associated companies accounted for using the equity method
Expected income tax expense (1,098) (760) (338) (44)
is not part of the Segment Result (see note 29, p. 159).
Tax rate differential 136 93 43 46
Effects due to changes in tax rates (1) 13 (14) –––

6 Income tax Effects from the difference between

local and functional currency (28) 8 (36) –––
Previous year taxes 86 77 9 12
Income tax from continuing operations for the fiscal years ending 30 September 2023 therein: current tax income 69 73 (4) (5)
and 2022 amounted to: Non-deductible expenses (47) (52) 5 10
Change Tax-exempt income 96 73 23 32
€ in millions 2023 2022 absolute in % Change in permanent balance sheet effects (10) (43) 33 77

Current tax expense (626) (393) (233) (59) Change in valuation allowance
on deferred tax assets 25 (43) 68 +++
Deferred tax income (156) (144) (12) (8)
Change in available tax credits 71 96 (25) (26)
Income tax (782) (537) (245) (46)
Other (12) 1 (13) –––
Actual income taxes (782) (537) (245) (46)

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 112
Notes to the Consolidated Financial Statements

“Change in valuation allowances on deferred tax assets” consisted of the following: The utilization of tax loss carry-forwards, tax credits and temporary differences for
In the 2023 fiscal year, amounts recognized in profit or loss included valuation which deferred tax assets had not previously been recorded resulted in current tax
allowances or non-recognition of deferred tax assets for tax loss carry-forwards income of €61 million in the 2023 fiscal year (2022: €1 million).
of €0 million (2022: €27 million) and tax credits of €20 million (2022: €67 million).
A write-up of deferred tax assets for tax loss carry-forwards of €10 million was Deferred tax assets and liabilities as of 30 September 2023 and 2022 comprised the
recorded (2022: €0 mil­lion). Within tax credits, the write-up of deferred tax assets following:
amounted to €35 million in the 2023 fiscal year (2022: €10 million) and temporary
differences amounted to €0 million (2022: €41 million).

30 September 2023 Change 2023 30 September 2022 Change 2022

Deferred Deferred Total Therein through Deferred Deferred Total Therein through
€ in millions tax assets tax liabilities profit or loss tax assets tax liabilities profit or loss
Intangible assets 23 (511) 219 177 44 (751) (15) 74
Property, plant and equipment 166 (207) (32) (39) 156 (165) (13) (2)
Inventories 35 (28) (7) (6) 39 (25) 8 6
Provisions, pensions and similar commitments 213 (22) (113) (81) 339 (35) 24 21
Other 50 (47) 13 14 29 (39) (5) (6)
Total deferred taxes on temporary differences 487 (815) 80 65 607 (1,015) (1) 93
Tax loss carry-forwards 156 – (238) (240) 394 – (183) (197)
Unused tax credits and excess foreign tax credits 186 – 16 19 170 – (31) (40)
Total deferred taxes 829 (815) (142) (156) 1,171 (1,015) (215) (144)
Netting (561) 561 – – (644) 644 – –
Total 268 (254) (142) (156) 527 (371) (215) (144)

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 113
Notes to the Consolidated Financial Statements

Infineon assessed the need for a valuation allowance of its deferred tax assets. Based The change in the net amount of deferred tax assets and liabilities is as follows:
on the results of this assessment, considering all positive and negative factors and
information relating to the foreseeable future based on business plans, Infineon € in millions 2023 2022
recognized deferred tax assets, after netting, of €268 million as of 30 September 2023
Deferred taxes, net as of the end of the previous fiscal year 156 371
(30 September 2022: €527 million).
Deferred tax income (expense), recognized through profit or loss:
From continuing operations (156) (144)
Taxable losses brought forward and tax credits amount to the following:
From discontinued operations – –
Change of deferred taxes, recognized directly in equity:
Change
Deferred tax arising from business acquisitions – (1)
€ in millions 2023 2022 absolute in % Deferred taxes recognized directly in equity 5 5
Corporate tax loss carry-forwards – Germany – 716 (716) ––– Deferred taxes recognized in other comprehensive income (13) (26)
Trade tax loss carry-forwards – Germany 982 1,940 (958) (49) Currency effects 22 (49)
Corporate tax loss carry-forwards and Deferred taxes, net as of the end of the fiscal year 14 156
local tax loss carry-forwards (particularly
US state tax loss carry-forwards) – foreign 509 625 (116) (19)
Tax credits 632 714 (82) (11) In connection with investments in subsidiaries, there were temporary taxable differ-
ences of €299 million (2022: €242 million) for which no deferred taxes have been
recognized because the timing of the reversal can be controlled, and it is not probable
No deferred taxes were recorded for the following items (gross amounts): that the temporary differences will reverse in the foreseeable future.

Change

€ in millions 2023 2022 absolute in %

Corporate tax loss carry-forwards and
local tax loss carry-forwards (particularly
US state tax loss carry-forwards) – foreign 345 412 (67) (16)
Thereof expire within the next five years 53 87 (34) (39)
Tax credits 446 544 (98) (18)
Thereof expire within the next five years – – – –
Deductible temporary differences 45 36 9 25

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 114
Notes to the Consolidated Financial Statements

Including the items recognized directly in equity and in other comprehensive income 7 Disposals and discontinued operations
and the expense/benefit from continuing and discontinued operations, the income
tax consisted of the following: Qimonda – discontinued operations
On 23 January 2009, Qimonda AG (“Qimonda”), a majority-owned company, filed
Change an application at the Munich local court to commence insolvency proceedings. On
€ in millions 2023 2022 absolute in %
1 April 2009, the insolvency proceedings formally opened. Insolvency proceedings
were also opened for further domestic and foreign subsidiaries of Qimonda. Some
Income taxes from continuing operations,
recognized in profit or loss (782) (537) (245) (46) of these insolvency proceedings have already been completed. The impacts of these
Income taxes from discontinued operations, proceedings are reported as discontinued operations in Infineon’s Consolidated
recognized in profit or loss 1 – 1 +++ Statement of Profit or Loss and Consolidated Statement of Cash Flows to the extent
Income taxes recognized directly in equity 22 9 13 +++ that the underlying events occurred before the commencement of insolvency pro-
Income taxes recognized in ceedings.
other comprehensive income (12) (26) 14 54
Income taxes (771) (554) (217) (39)
The current risks and provisions relating to Qimonda’s insolvency are described in
note 24 “Proceedings in relation to Qimonda”. p. 136 ff.
As in the previous fiscal year, income taxes recognized directly in equity in the 2023
fiscal year were the result of tax effects in connection with the compensation for In the 2023 and 2022 fiscal years, adjustments to individual provisions arose as a
hybrid capital and with share-based compensation. result of recent developments in connection with the insolvency of Qimonda, which
resulted in a loss from discontinued operations, net of income taxes of €2 million
The income taxes recognized in other comprehensive income in the 2023 fiscal year and €7 million, respectively.
comprise mainly actuarial gains and losses arising from pension commitments of
€15 million (2022: €25 million).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 115
Notes to the Consolidated Financial Statements

8 Earnings per share Basic and diluted earnings per share are calculated as follows for the fiscal years
ended 30 September 2023 and 2022:
Basic earnings per share are calculated by dividing profit (loss) for the period by Change
the weighted-average number of shares outstanding during the reporting period.
€ in millions (unless otherwise stated) 2023 2022 absolute in %
The calculation of the diluted earnings per share is based on the assumption that
Profit (loss) for the period – basic and diluted 3,137 2,179 958 44
all potentially dilutive instruments are converted into ordinary shares, resulting
Remuneration of hybrid capital investors¹ (29) (29) – –
in a corresponding increase in the number of shares.
Profit (loss) for the period attributable to
shareholders of Infineon Technologies AG –
The hybrid bond issued in the 2020 fiscal year is classified as equity (see note 20, basic and diluted 3,108 2,150 958 45
p. 130 f.). The related hybrid investors’ remuneration (after tax) represents payments thereof from continuing operations 3,110 2,157 953 44
for a component of equity that reduces the earnings available to shareholders for thereof from discontinued operations (2) (7) 5 71
distribution and was therefore taken into account in determining earnings per share
(basic and diluted). Weighted-average number of shares
outstanding (in millions):
Ordinary share capital 1,305.9 1,305.9 – –
Adjustment for own shares (2.9) (4.1) 1.2 29
Weighted-average number of shares
outstanding – basic 1,303.0 1,301.8 1.2 0
Adjustments for:
Effect of share-based payment 2.8 1.8 1.0 56
Weighted-average number of shares
outstanding – diluted 1,305.8 1,303.6 2.2 0

Basic earnings per share (in euro): 2

Earnings per share (in euro)
from continuing operations 2.39 1.66 0.73 44
Earnings (loss) per share (in euro)
from discontinued operations (0.01) (0.01) – –
Earnings per share (in euro) – basic 2.38 1.65 0.73 44

Diluted earnings per share (in euro): 2

Earnings per share (in euro)
from continuing operations 2.38 1.65 0.73 44
Earnings (loss) per share (in euro)
from discontinued operations – – – –
Earnings per share (in euro) – diluted 2.38 1.65 0.73 44

1 Including the cumulative tax effect.

2 The calculation of earnings per share is based on unrounded figures.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 116
Notes to the Consolidated Financial Statements

9 Financial investments 10 Trade receivables

Financial investments comprise fixed-term deposits with banks and investment Trade receivables result from contracts with customers that are due within one year.
funds. Fixed-term deposits with banks are categorized as financial assets and mea- As of 30 September 2023 and 2022, they consisted of the following:
sured at amortized cost. Investment funds are categorized as financial assets and
measured at fair value through profit or loss (see also note 2, p. 98 f., and note 27, Change
30 Septem- 30 Septem-
p. 142 ff.). € in millions ber 2023 ber 2022 absolute in %
Trade receivables, third parties 1,977 1,883 94 5
Financial investments as of 30 September 2023 and 2022 comprised the following: Trade receivables, related parties 19 10 9 90
Trade receivables, gross 1,996 1,893 103 5
Change
30 Septem- 30 Septem- Loss allowances (5) (6) 1 17
€ in millions ber 2023 ber 2022 absolute in % Trade receivables, net 1,991 1,887 104 6
Fixed-term bank deposits – 240 (240) –––
Investment funds 1,770 2,039 (269) (13)
Financial investments, gross 1,770 2,279 (509) (22)
Changes in the loss allowances for trade receivables in the 2023 and 2022 fiscal years
Loss allowances – – – –
were as follows:
Change
Financial investments, net 1,770 2,279 (509) (22)
€ in millions 2023 2022 absolute in %
Loss allowances as of the beginning
The loss allowances on financial investments that are measured at amortized cost of the fiscal year 6 5 1 20
changed as follows during the 2023 and 2022 fiscal years: Current year’s loss allowance, net of reversals (1) 1 (2) –––
Loss allowances as of the end of the fiscal year 5 6 (1) (17)
Change

€ in millions 2023 2022 absolute in %

Loss allowances as of the beginning
Information about Infineon’s credit risk management is contained in note 28. p. 153 f.
of the fiscal year – 1 (1) –––
Revaluation of loss allowances, net – (1) 1 +++
Loss allowances as of the end of the fiscal year – – – –

Information on Infineon’s credit risk management is contained in note 28. p. 153 f.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 117
Notes to the Consolidated Financial Statements

11 Inventories 12 Other current assets

Inventories as of 30 September 2023 and 2022 consisted of the following: Other current assets as of 30 September 2023 and 2022 consisted of the following:

Change Change
30 Septem- 30 Septem- 30 Septem- 30 Septem-
€ in millions ber 2023 ber 2022 absolute in % € in millions ber 2023 ber 2022 absolute in %
Raw materials and supplies 612 470 142 30 Prepayments 347 58 289 +++
Work in progress 2,593 1,949 644 33 VAT and other receivables from tax authorities 204 2441 (40) (16)
Finished goods and merchandise 769 662 107 16 Grants receivables 186 1451 41 28
Total 3,974 3,081 893 29 Prepaid expenses 150 131 19 15
Derivative financial instruments
(see note 27, p. 147 ff.) 10 5 5 +++
Cost of goods sold consisted mainly of inventory-related expenses in the 2023 and Other 62 42 20 48
2022 fiscal years. Total 959 625 334 53

1 The previous year’s figures for “VAT and other receivables from tax authorities” and “Grants receivables” have been adjusted.
As of 30 September 2023 and 2022, finished goods and merchandise included an asset
of €22 million and €16 million, respectively, which resulted from sales with a right
of return. Further information on Infineon’s financial assets can be found in note 27. p. 142 ff.

Inventory write-downs as of 30 September 2023 and 2022 amounted to €414 million

and €282 million, respectively.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 118
Notes to the Consolidated Financial Statements

13 Property, plant and equipment and

other intangible assets
The development of property, plant and equipment, as well as other intangible assets
for the years ended 30 September 2023 and 2022, was as follows:

Cost Depreciation/amortization Carrying amount

1 October Additions Disposals Reclassi- Currency 30 Sep­ 1 October Depre­ Disposals Impair- Currency 30 Sep­ 30 Sep­ 30 Sep­
2022 fication effects tember 2022 ciation/ ments/ effects tember tember tember
2023 amorti­ reversals 2023 2023 2022
zation of impair-
€ in millions ments
Property, plant and equipment
Land, land rights and buildings 2,565 109 (37) 28 (39) 2,626 (1,080) (80) 22 – 14 (1,124) 1,502 1,485
Technical equipment and machinery 12,540 829 (286) 623 (79) 13,627 (9,600) (916) 279 – 57 (10,180) 3,447 2,940
Other plant and office equipment 1,560 135 (93) 64 (18) 1,648 (1,338) (147) 93 – 12 (1,380) 268 222
Payments on account and construction in progress 904 1,656 (6) (715) (4) 1,835 (6) – – (1) – (7) 1,828 898
Total 17,569 2,729 (422) – (140) 19,736 (12,024) (1,143) 394 (1) 83 (12,691) 7,045 5,545

Other intangible assets

Capitalized development costs 1,444 214 (10) – (8) 1,640 (547) (93) 10 (13) – (643) 997 897
Customer relationships 1,545 – (14) – (107) 1,424 (841) (152) 9 – 50 (934) 490 704
Technologies 2,618 – (11) – (204) 2,403 (892) (245) 7 – 68 (1,062) 1,341 1,726
Licenses and similar rights 338 41 (5) – (3) 371 (261) (31) 5 – 3 (284) 87 77
Remaining other intangible assets 126 – – – (10) 116 (47) (10) – – 3 (54) 62 79
Total 6,071 255 (40) – (332) 5,954 (2,588) (531) 31 (13) 124 (2,977) 2,977 3,483

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 119
Notes to the Consolidated Financial Statements

Cost Depreciation/amortization Carrying amount

1 October Additions Additions Disposals Reclassi- Currency 30 Sep­ 1 October Depre­ Disposals Reclassi- Impair- Currency 30 Sep­ 30 Sep­ 30 Sep­
2021 through fication effects tember 2021 ciation/ fication ments/ effects tember tember tember
business 2022 amorti­ reversals 2022 2022 2021
combi­ zation of impair-
€ in millions nation ments
Property, plant
and equipment
Land, land rights
and buildings 2,302 69 3 (6) 136 61 2,565 (989) (83) 5 – 6 (19) (1,080) 1,485 1,313
Technical equipment
and machinery 11,129 972 6 (130) 455 108 12,540 (8,822) (829) 127 (8) – (68) (9,600) 2,940 2,307
Other plant and
office equipment 1,457 131 – (85) 38 19 1,560 (1,279) (138) 83 8 – (12) (1,338) 222 178
Payments on account and
construction in progress 645 889 – (1) (629) – 904 – – 1 – (6) (1) (6) 898 645
Total 15,533 2,061 9 (222) – 188 17,569 (11,090) (1,050) 216 – – (100) (12,024) 5,545 4,443

Other intangible assets

Capitalized
development costs 1,220 209 – – – 15 1,444 (448) (94) – – (4) (1) (547) 897 772
Customer relationships 1,333 – – – – 212 1,545 (595) (156) – – – (90) (841) 704 738
Technologies 2,214 – – – – 404 2,618 (528) (243) – – – (121) (892) 1,726 1,686
Licenses and similar rights 306 31 – (5) – 6 338 (230) (30) 5 – – (6) (261) 77 76
Remaining other
intangible assets 106 – – – – 20 126 (29) (11) – – – (7) (47) 79 77
Total 5,179 240 – (5) – 657 6,071 (1,830) (534) 5 – (4) (225) (2,588) 3,483 3,349

Depreciation on property, plant and equipment is presented in the Consolidated

Statement of Profit or Loss, mainly in cost of goods sold. Amortization of intangible
assets is mainly presented in cost of goods sold or selling, general and administrative
expenses. Impairments on property, plant and equipment and other intangible
assets are reported under other operating expenses.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 120
Notes to the Consolidated Financial Statements

14 Goodwill Cash flows, including the underlying parameters such as revenue growth and margins,
are projected based on past experience, current operating results and the business
Changes in goodwill during the 2023 and 2022 fiscal years were as follows: plan approved in the fiscal year just ended, which is calculated bottom-up based on
certain central assumptions applied consistently throughout Infineon. Cash flows over
€ in millions 2023 2022 a five-year period are used to derive the value in use. The derivation of the terminal
Cost
value is based on a stable business state, reflecting synergies resulting from the
Balance as of the beginning of the fiscal year 7,083 5,962
acquisition of Cypress. The average revenue growth rates over the planning period
Additions through business combination 27 28
are between 10.5 percent and 16.4 percent, which is in part higher than the average
Disposals (10) –
historical growth rates of the sectors in which the relevant segments operate because,
Currency effects (553) 1,093
among other things, the segments benefit to varying degrees from the businesses
Balance as of the end of the fiscal year 6,547 7,083
acquired with Cypress and the related revenue synergies. Investments to increase
Accumulated impairments and other changes
capacity for which no cash outflow has taken place are not taken into account. Cash
Balance as of the beginning of the fiscal year – –
flows for periods beyond the planning horizon are estimated using a terminal value.
Impairments – –
Disposals – –
The discount rate for future cash flows is based on the after-tax weighted-average
Currency effects – –
cost of capital (“WACC”) for the CGU in question. The Capital Asset Pricing Model
Balance as of the end of the fiscal year – –
(“CAPM”) is used to calculate the cost of equity. The relevant pre-tax WACC used to
Carrying amount
discount future pre-tax cash flows in line with IAS 36 is derived from estimated future
Balance as of the beginning of the fiscal year 7,083 5,962
after-tax cash flows and the after-tax WACC using a typical tax rate for each operating
segment. The risk-free interest rate is derived using the Svensson method taking
Balance as of the end of the fiscal year 6,547 7,083
into account risk premiums, the beta factor and debt ratio are derived from a group
of companies comparable to the operating segment. In this way, the discount rate
Infineon carried out the annual goodwill impairment test at the operating segment derived reflects the current market rate of return as well as the specific risks attached
level in the fourth quarter of the 2023 fiscal year. to the respective operating segment.

Infineon determines the recoverable amount of a particular cash generating unit to

which goodwill has been allocated on the basis of its value in use. The value in use is
measured by estimating the present value of future cash flows that will be generated
by the continuing operations of the CGU discounted using an appropriate discount rate.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 121
Notes to the Consolidated Financial Statements

The following table shows the allocation of the carrying amount of goodwill to the
segments, as well as the valuation parameters used:

Book value of allocated goodwill Pre-tax WACC 1 After-tax WACC 1 Terminal growth rate 1
€ in millions in % in % in %

Operating segment 2023 2022 2023 2022 2023 2022 2023 2022
Automotive 1,556 1,686 14.5 13.2 10.7 9.9 1.5 1.5
Green Industrial Power 244 261 15.2 13.4 11.0 10.0 1.5 1.5
Power & Sensor Systems 1,843 2,011 14.2 14.1 11.1 10.7 1.5 1.5
Connected Secure Systems 2,902 3,123 14.0 12.9 10.6 10.0 1.5 1.5
Corporate 2 2
Total 6,547 7,083

1 Valuation parameters as of 30 June 2023 and 2022 for the respective impairment test in the fourth quarter.

As a result of the impairment tests carried out, Infineon concluded that none of the account, no impairment on goodwill was observed as a result of the sensitivity
operating segments gave rise to an impairment of goodwill in the year under report. analyses at operating segment level.

Business planning is affected, among other things, by uncertainties regarding the In addition, up to the date of preparation of the Consolidated Financial Statements,
assessment of markets and the macroeconomic environment. Therefore, sensitivity there was no indication that the recoverable amount of an operating segment to which
analyses were carried out at operating segment level, taking into account changes goodwill had been allocated could have fallen below the book value.
considered possible in the main assumptions. Even taking these changes into

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 122
Notes to the Consolidated Financial Statements

15 Leases 30 September 2023 30 September 2022

Discounted Undiscounted Discounted lease Undiscounted

Leases concluded relate mainly to the rental of office and warehouse space, IT equip- € in millions lease liabilities lease liabilities liabilities lease liabilities

ment, other plant and office equipment, as well as vehicles for selected employees. Due within one year 72 82 76 81
Due after one year to five years 197 230 209 235
The changes in the right-of-use assets in the 2023 and 2022 fiscal years were as follows: Due after more than five years 112 133 101 115
Total 381 445 386 431
Starting Additions Additions Depreciation Other Carrying
balance through changes amount
business
combi­ The Consolidated Statement of Profit or Loss includes the following amounts in the
€ in millions nations 2023 and 2022 fiscal years that are attributable to leases:
The 2023 fiscal year
Change
Land, land rights
and buildings 389 92 – (70) (22) 389 € in millions 2023 2022 absolute in %
Technical equip- Depreciation 80 80 – –
ment and machinery 6 2 – (3) – 5
Interest expenses 11 5 6 +++
Other plant and
office equipment 10 9 – (7) (1) 11 Expenses for short-term leases
with a term of twelve months or less 5 5 – –
Total 405 103 – (80) (23) 405
Expenses for low-value leases 11 6 5 83
The 2022 fiscal year
Land, land rights
and buildings 319 119 1 (71) 21 389 The Consolidated Statement of Cash Flows includes the following amounts in the
Technical equip- 2023 and 2022 fiscal years that are attributable to leases:
ment and machinery 8 1 – (3) – 6
Change
Other plant and
office equipment 9 7 – (6) – 10 € in millions 2023 2022 absolute in %
Total 336 127 1 (80) 21 405 Payments for short-term leases
and low-value leases 16 11 5 45
Payments for lease prepayments – 17 (17) –––
The allocation of discounted and undiscounted lease liabilities by maturity as of Payments for lease liabilities 86 84 2 2
30 September 2023 and 2022 was as follows: Interest payments 11 5 6 +++
Total 113 117 (4) (3)

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 123
Notes to the Consolidated Financial Statements

Some leases contain renewal options that may be exercised by Infineon prior to 16 Financial debt
the expiration of the non-cancelable lease term. Infineon has possible future (undis-
counted) leasing payments amounting to €45 million that are not included in Financial debt as of 30 September 2023 and 2022 consisted of the following:
lease liabilities because it is not sufficiently certain that the leases will be renewed.
30 Septem- 30 Septem-
In addition, there are future payment obligations for leases that have not yet started € in millions ber 2023 ber 2022

but have already been contracted amounting to €48 million. Short-term financial debt and current portion of long-term financial debt,
weighted average interest rate 2022: 0.87% – 3
Bond €750 million, coupon 0.75%, due 2023 – 749
Future payment obligations relating to short-term leases with a term of twelve months
USPP note US$350 million, interest rate 3.94%, due 2024 330 –
or less are immaterial in value.
Short-term financial debt and current portion of long-term financial debt 330 752
Bond €500 million, coupon 0.625%, due 2025 498 497
The lease contracts, in which Infineon subleases and acts as a lessor, are not material
Bond €750 million, coupon 1.125%, due 2026 746 745
from the Group’s point of view.
Bond €750 million, coupon 1.625%, due 2029 743 742
Bond €650 million, coupon 2.00%, due 2032 640 639
The expected non-discounted future minimum lease payments from operating leases
USPP notes US$585 million,
for land and buildings owned by Infineon and in which Infineon acts as lessor are as weighted average interest rate 4.18%, due 2026 – 2028 552 958
follows: USPP notes US$1,300 million,
weighted average interest rate 2.88%, due 2027 – 2033 1,224 1,329
30 Septem- 30 Septem- Long-term financial debt 4,403 4,910
€ in millions ber 2023 ber 2022
Total 4,733 5,662
Due within one year 12 18
Due after one year to five years 16 23
Due after more than five years 1 – A €750 million bond maturing on 24 June 2023 was repaid as scheduled.
Total 29 41
The total lines of credit as of 30 September 2023 and 2022 are summarized in the
following table:
30 September 2023 30 September 2022

Aggregate Drawn Available Aggregate Drawn Available

Term, € in millions facility facility
Short-term 69 – 69 83 3 80
Long-term – – – – – –
Total 69 – 69 83 3 80

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 124
Notes to the Consolidated Financial Statements

Nominal amounts of financial debt and interest maturing in the coming years were Provisions for warranties mainly represented the estimated future cost of fulfilling
as follows: contractual requirements associated with products sold.
30 September 2023 30 September 2022
Other provisions comprised mainly provisions for litigations (other than those relating
Financial Interest Financial Interest
€ in millions debt debt to Qimonda), asset retirement obligations and miscellaneous other liabilities.
Due within one year 330 108 753 120
Due after one year to five years 2,133 319 2,327 385 Of the total provisions as of 30 September 2023 and 2022, cash outflows of €799 million
Due after more than five years 2,297 143 2,616 215 and €983 million, respectively, were expected to occur within one year. For the non-
Total 4,760 570 5,696 720
current provisions, the cash outflow was expected to occur after more than one year.
Besides the provisions in connection with Qimonda, €49 million as of 30 September
2023 and €42 million as of 2022 of non-current provisions were attributable to length-
of-service related anniversary awards.
17 Provisions
Current and non-current provisions as of 30 September 2023 consisted of the following: 18 Other current liabilities
1 October Addition Usage Reversal 30 Septem- Other current liabilities as of 30 September 2023 and 2022 consisted of the following:
€ in millions 2022 ber 2023
Obligations to employees 952 610 (737) (40) 785 Change
Provisions related to Qimonda 30 Septem- 30 Septem-
€ in millions ber 2023 ber 2022 absolute in %
(see note 7, p. 114,
and note 24, p. 136 ff.) 211 9 (3) (5) 212 Reimbursement obligations 688 593 95 16
Warranties 39 30 (6) (13) 50 Payroll and similar obligations to employees 241 248 (7) (3)
Other 70 15 (36) 3 52 Contract liabilities 99 26 73 +++
Total provisions 1,272 664 (782) (55) 1,099 Accrued interest expense 91 93 (2) (2)
thereof current 983 799 VAT payables 38 50 (12) (24)
thereof non-current 289 300 Other 128 151 (23) (15)
Total 1,285 1,161 124 11

Obligations to employees included, among others, costs of variable remuneration,

outstanding vacation and flextime, service anniversary awards, other personnel costs
and social security costs.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 125
Notes to the Consolidated Financial Statements

Contract liabilities amounted to €126 million and €32 million as of 30 September 2023 form of an annuity before the Infineon Pension Plan came into force, this commitment
and 2022, respectively. Of this amount, €27 million (30 September 2022: €6 million) was transferred into the Infineon Pension Plan and thereby the possibility of an
related to non-current contract liabilities reported under other non-current liabilities. annuity is guaranteed. Together with former employees whose pension benefit obli-
gations were not transferred into the Infineon Pension Plan, this group makes up the
The increase in contract liabilities mainly results from advance payments from largest part of the obligation at this time. A corresponding provision is recorded for
customers based on capacity reservation agreements. the German defined benefit pension plans, which are partly backed by plan assets.
Individual agreements are in place for the members of the Management Board, which
Further information on Infineon’s financial liabilities can be found in note 27. p. 142 ff. are backed by plan assets. The major portion of the plan assets is managed by a pen-
sion trust in the legal form of a registered association. This is composed of executives
of Infineon Technologies AG, and the investment strategy is defined by Infineon
19 Pension plans Technologies AG.

Defined benefit pension plans The benefit obligation of some foreign plans is measured according to the income
Infineon’s employee benefit plans consist of domestic and foreign defined benefit in the last month or year of service; others are dependent on average income over
and defined contribution pension plans providing retirement, disability and the service period. Foreign pension plans are managed by country-specific external
surviving dependents’ benefits. For Infineon, the significant benefit plans in pension funds or other pension schemes. The obligations arising from foreign defined
Germany pertain to Infineon Technologies AG and, within the foreign benefit plans, benefit pension plans are partly covered by plan assets. The management of existing
to Infineon Technologies Austria AG, Austria. foreign plan assets is performed by the respective pension scheme.

In Germany, Infineon primarily offers defined contribution benefits which provide The valuation date of the pension plans is 30 September.
for the employees when they reach retirement age, or in the event of disability or
death. The statutory framework is provided by the Company Pension Act (in German: The Group-defined benefit pension plans are exposed to risks arising from changes
Betriebsrentengesetz or “BetrAVG”) and by employment law in general. With the to actuarial assumptions such as discount factors, salary and pension trends,
Infineon pension plan, new entrants receive a defined contribution benefit, which is investment risks and longevity risks. A lower discount rate leads to higher pension
funded by Infineon. Payments by the Infineon pension plan are generally made in liabilities. Lower than expected growth in plan assets could lead to a deterioration
twelve annual installments. For active employees who were entitled to benefits in the of the funded status.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 126
Notes to the Consolidated Financial Statements

The development of Infineon’s German (domestic) and non-German (foreign) pension

plans and the plan assets as of 30 September 2023 and 2022 is presented in the
following table:
2023 2022

€ in millions Domestic plans Foreign plans Total Domestic plans Foreign plans Total
Change in defined benefit obligations taking into account future salary increases:
Present value as of the beginning of year (802) (183) (985) (1,161) (220) (1,381)
Current service cost (20) (8) (28) (28) (7) (35)
Past service income (cost) – – – (1) 2 1
Interest cost (29) (8) (37) (14) (5) (19)
Actuarial gains (losses) for:
Experience adjustments (36) (8) (44) 23 (10) 13
Adjustments to demographic assumptions – 1 1 32 – 32
Adjustments to financial assumptions 72 – 72 333 53 386
New plans created and plan amendments (4) – (4) – – –
Benefits paid 26 12 38 24 11 35
Employee contributions (8) – (8) (10) – (10)
Currency effects – 6 6 – (7) (7)
Present value of defined benefit obligation as of the end of year (801) (188) (989) (802) (183) (985)

Change in fair value of plan assets:

Fair value of plan assets as of the beginning of year 617 71 688 671 93 764
Expected return on plan assets 23 3 26 8 2 10
Actuarial gains (losses) 8 (5) 3 (70) (29) (99)
Contributions from Infineon 23 10 33 22 11 33
Employee contributions 8 – 8 10 – 10
Benefits paid (26) (12) (38) (24) (11) (35)
Reclassification of fair value of plan assets 4 – 4 – – –
Currency effects – (3) (3) – 5 5
Fair value of plan assets as of the end of year 657 64 721 617 71 688

Net pension liability (144) (124) (268) (185) (112) (297)

thereof: Infineon Technologies AG (128) – (128) (167) – (167)
thereof: Infineon Technologies Austria AG – (58) (58) – (51) (51)

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 127
Notes to the Consolidated Financial Statements

Pension obligations are reported in the Consolidated Statement of Financial Position corporate bonds from issuers carrying a very high credit rating, with the same maturity
under “Pensions and similar commitments”. p. 91 and in the same currency as the pension obligations to be assessed.

Since no asset ceilings applied, the funded status of the Infineon pension plans The 2018 G mortality tables by Dr. Klaus Heubeck were used for Germany as in the
corresponded to the amounts reported in the Consolidated Statement of Financial previous year, and for Austria, the AVÖ 2018-P tables were applied.
Position as of 30 September 2023 and 2022.
Sensitivity analysis
The funding of the defined benefit obligations as of 30 September 2023 and 2022 was The following sensitivity analysis table shows how the present value of all defined
as follows: benefit pension obligations would be affected by changes in the aforementioned
30 September 2023 30 September 2022 actuarial assumptions. In each case, they reflect the effect of changes in one actuarial
Domestic Foreign Total Domestic Foreign Total
assumption while all other assumptions remain constant.
€ in millions plans plans plans plans
Plans that are wholly 30 September 2023 30 September 2022
unfunded 48 92 140 48 82 130
Domestic Foreign Total Domestic Foreign Total
Plans that are wholly € in millions plans plans plans plans
or partly funded 753 96 849 754 101 855
Present value of defined
Total 801 188 989 802 183 985 benefit pension plans with:
a 50 basis points
higher discount rate 756 179 935 753 173 926
a 50 basis points
Actuarial assumptions lower discount rate 851 198 1,049 857 193 1,050
The weighted-average assumptions used in calculating the actuarial values for the a 50 basis points
higher expected rate
pension plans were as follows: of salary increase 808 193 1,001 809 187 996
30 September 2023 30 September 2022 a 50 basis points
lower expected rate
Domestic Foreign Domestic Foreign
of salary increase 795 183 978 796 179 975
in % plans plans plans plans
a 50 basis points
Discount rate at the end of the fiscal year 4.1 5.1 3.8 4.8 higher expected rate
Rate of salary increase 2.4 5.7 2.5 5.0 of pension increase 821 191 1,012 825 186 1,011
Projected future pension increases 2.1 2.8 2.3 2.9 a 50 basis points
lower expected rate
of pension increase 783 185 968 781 180 961
Increase in life expectancy
In order to determine the present value as of the balance sheet date, the Willis Towers of one year 818 190 1,008 820 185 1,005
Watson RATE:Link approach was applied, which is based on high-grade fixed-interest

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 128
Notes to the Consolidated Financial Statements

Investment strategy Government and corporate bonds are traded in liquid markets and the majority have
The pension plans’ assets are invested with several fund managers. The investment an investment grade rating. The geographical allocation of the equity component
guidelines require a mix of active and passive investment management programs of plan assets is globally diversified. As a matter of policy, Infineon’s pension plans
covering different asset classes. Taking the duration of the underlying liabilities into do not invest in the shares or debt instruments of Infineon. The position “Other” in
account, a portfolio of investments of plan assets in equity, debt and other securities, the previous table comprises exchange-traded commodities (ETC) and other invest-
as well as real estate and reinsurance policies, is targeted to maximize the total long- ment funds. The market value of the ETC held domestically was €36 million as of
term return on assets for a given level of risk. Investment risk is monitored on an 30 September 2023 (previous year: €35 million).
ongoing basis through periodic portfolio reviews, in coordination with investment
managers and annual liability measurements. Investment policies and strategies are The market value of the land and real estate leased to Infineon group companies by
periodically reviewed as part of detailed studies of assets and liabilities by indepen- the legally independent pension trust amounted to €29 million and €30 million as of
dent investment advisors and actuaries to ensure the objectives of the plans are met, 30 September 2023 and 2022 respectively.
taking into account any changes in benefit plan structure, market conditions or other
material items. The aim is to optimize the risk-return profile of plan assets against The realized return on plan assets in the fiscal year ended 30 September 2023 was
the liabilities using a diversified portfolio of investments within a defined risk budget positive €29 million (30 September 2022: negative €89 million).
and to thereby increase the funding ratio in the long term.
Amounts recognized in the Consolidated Statement of Profit or Loss
Plan asset allocation and in the Consolidated Statement of Comprehensive Income
As of 30 September 2023 and 2022, the allocation of invested plan assets to the major The expenses and income of defined benefit plans for the 2023 and 2022 fiscal years
asset categories was as follows: comprised the following:
30 September 2023 30 September 2022
2023 2022
Quoted Not quoted Quoted Not quoted
in an in an in an in an Domestic Foreign Total Domestic Foreign Total
€ in millions active market active market active market active market € in millions plans plans plans plans

Government bonds 146 1 130 1 Current service cost (20) (8) (28) (28) (7) (35)
Corporate bonds 159 – 173 – Past service (cost) benefit – – – (1) 2 1
Equity securities 261 – 231 – Interest cost (29) (8) (37) (14) (5) (19)
Cash and cash equivalents 22 – 29 – Expected return
on plan assets 23 3 26 8 2 10
Reinsurance policies – 42 – 39
Pension cost (26) (13) (39) (35) (8) (43)
Property 3 29 3 30
Other 37 21 36 16
Total 628 93 602 86

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 129
Notes to the Consolidated Financial Statements

Service costs were recorded within cost of goods sold, research and development Additionally, the Group makes contributions to government pension schemes.
expenses or selling, general and administrative expenses. Interest costs and expected Expenses for defined contribution plans amounted to €333 million and €309 million
return on plan assets were recorded net as part of financial expenses. in the 2023 and 2022 fiscal years.

Actuarial gains before taxes of €32 million and €332 million for the 2023 and
2022 fiscal years, respectively, had been recognized outside of profit (loss) for the 20 Equity
period in other comprehensive income.
Ordinary share capital
As of 30 September 2023 and 2022, cumulative actuarial losses amounted to €39 million The following table shows a reconciliation of the number of ordinary shares issued as
and €71 million, respectively. of 30 September 2023 and 2022:

In the 2024 fiscal year, payments of €38 million are expected to be made to plan quantity 2023 2022
assets, of which €35 million relate to benefits paid directly to pension recipients by Shares outstanding at the beginning of the fiscal year 1,302,231,236 1,301,375,535
the Group companies. Transfer of own shares under the Performance Share
and Restricted Stock Unit Plans (see note 22, p. 133 ff.) 1,518,875 855,701
The weighted-average duration of defined benefit plans was around 12 and 13 years Shares outstanding at the end of the fiscal year 1,303,750,111 1,302,231,236
as of 30 September 2023 and 2022, respectively. Repurchased own shares 2,171,026 3,689,901
Shares issued at the end of the fiscal year 1,305,921,137 1,305,921,137
The following table shows the expected disbursements for defined benefit plans for
the next ten fiscal years as of 30 September 2023 and 2022:
As of 30 September 2023, the ordinary share capital amounted to €2,611,842,274 and
30 Septem- 30 Septem- was fully paid up. It was divided into 1,305,921,137 no par value registered shares,
€ in millions ber 2023 ber 2022 each representing €2 of the Company’s ordinary share capital. Each share grants the
Due within one year 48 46 holder one vote and an equal portion of the profits in the form of a dividend, as
Due after more than one year to five years 218 192 resolved by the Annual General Meeting. Own shares held by the Company as of the
Due after more than five years up to ten years 354 325 date of the Annual General Meeting carry no voting rights and are not entitled to
Total 620 563 a dividend.

Additional paid-in capital

Defined contribution plans The pro rata expense for share-based payments resulted in an increase in additional
In connection with defined contribution plans, fixed contributions are made to external paid-in capital of €92 million in the 2023 fiscal year (2022: €62 million). Due to the
insurance providers or funds. Infineon has no further performance obligations or transfer of own shares within the framework of share-based payment to employees
risks with regard to these pension plans in excess of the fixed contributions paid. and members of the Management Board, additional paid-in capital, as well as the line

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 130
Notes to the Consolidated Financial Statements

item for own shares, decreased by €10 million (2022: €5 million). Tax effects totaling ›  ection 4, paragraph 7 of the Articles of Association provides that the Manage-
S
€23 million (2022: €9 million) increased the additional paid-in capital. ment Board is authorized, with the approval of the Supervisory Board, to increase
the share capital in the period up to 24 February 2026 – either once or in partial
Authorized share capital amounts – by a total of up to €30,000,000 by issuing new no par value registered
As of 30 September 2023, the Company’s Articles of Association provided for two shares against contributions in cash for the purpose of increasing the issue to
authorized share capitals amounting to up to €670,000,000: employees and members of the Executive Board of the Company or its Group
companies. The subscription rights of the shareholders are excluded in relation
›  ection 4, paragraph 4 of the Articles of Association provides that the Management
S to these shares. The shares may be issued to employees in such a manner that the
Board is authorized, with the approval of the Supervisory Board, to increase the contribution to be paid on such shares is covered by the portion of the profit for
share capital in the period until 19 February 2025 once or in several partial amounts the year that the Management Board and Supervisory Board could transfer to
by a total of up to €640,000,000 through the issue of new no par value registered retained earnings in accordance with section 58, paragraph 2 of the German Stock
shares, against contributions in cash or in kind (Authorized Capital 2020/I). The Corporation Act. The Management Board, with the approval of the Supervisory
new shares participate in profits from the beginning of the fiscal year of their issue. Board, decides on the additional content of the share rights and the conditions of
To the extent legally permissible, the Management Board may, with the approval share issue (Authorized Capital 2021/I).
of the Supervisory Board, and contrary to section 60, paragraph 2 of the German
Stock Corporation Act, stipulate that the new shares participate in the profits from Conditional capital
the beginning of an already ended fiscal year for which no resolution of the Annual As of 30 September 2023, the Company’s Articles of Association provided for a
General Meeting on the use of the distributable profit has yet been made at the conditional capital amounting to up to €260,000,000:
time of their issue. The originally authorized capital 2020/I of €750,000,000 was
reduced to €640,000,000 by the capital increase of €110,000,000 as decided by the ›  ursuant to section 4, paragraph 6 of the Articles of Association the share capital
P
Management Board and the Supervisory Board on 26 May 2020 and entered in is conditionally increased by up to €260,000,000 through the issue of up to
the Commercial Register on 27 May 2020. Within the framework of the Authorized 130,000,000 new no par value registered shares for the granting of shares to
Capital 2020/I, the Management Board is authorized, with the approval of the creditors or the holders of warrants or convertible bonds, which due to the autho-
Supervisory Board, to exclude the subscription rights of the shareholders in certain rization by the Annual General Meeting on 20 February 2020 are issued by the
cases. Cash capital increases with subscription rights excluded pursuant to section Company or a subsidiary company (Conditional Capital 2020/1).
186, paragraph 3, sentence 4 of the German Stock Corporation Act, are not permit-
ted to exceed 10 percent of a company’s share capital – neither at the time of the Hybrid capital
resolution of the authorization in the Annual General Meeting, nor at the effective Infineon Technologies AG issued a perpetual hybrid bond on 1 October 2019 to
date of the authorization, or its exercise. The capital increase of 26/27 May 2020 refinance the acquisition of Cypress, which is an equity instrument under IAS 32.
utilized around 4 percent of this framework. For share capital increases against The term is not contractually limited; the bond has no final maturity date. The hybrid
contributions in kind or a combination of cash contributions and contributions in bond can only be canceled by Infineon subject to certain conditions. The investors
kind, the authorization further provides an upper limit of 10 percent of the share have no cancellation rights and cannot trigger a premature repayment liability for
capital in place at the date of the authorization in the Annual General Meeting. Infineon. Distributions are at Infineon’s sole discretion.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 131
Notes to the Consolidated Financial Statements

In the 2023 fiscal year, €39 million (2022: €39 million) was recognized in equity as “Actuarial gains (losses) on pensions and similar commitments” contain the share of
compensation to hybrid capital investors. For the purpose of calculating earnings per profit (loss) of associates and joint ventures accounted for using the equity method in
share, the profit (loss) for the period attributable to the shareholders and hybrid the 2023 fiscal year of €0 million (2022: €3 million).
capital investors of Infineon Technologies AG of €3,137 million (2022: €2,179 million)
was reduced by compensation to the hybrid capital investors of €29 million (2022: Dividends
€29 million; net of tax), to €3,108 million (2022: €2,150 million) (see note 8, p. 115). For the 2022 fiscal year, a cash dividend of €0.32 per share (total amount: €417 million)
was paid. For the 2021 fiscal year, a cash dividend of €0.27 per share (total amount:
The hybrid capital investors’ compensation is paid in arrears on 1 April of each year, €351 million) was paid.
subject to repayment or redemption. On 1 April 2023, €39 million (2022: €39 million)
was paid out to the hybrid capital investors. With regard to the 2023 fiscal year, a dividend of €0.35 for each share entitled to a
dividend shall be proposed to be paid from the €710 million of distributable profits
Retained earnings of Infineon Technologies AG. This would result in an expected distribution of approxi-
The following table shows a reconciliation of retained earnings as of 30 September 2023 mately €456 million. The payment of this dividend depends on the approval of the
and 2022: Annual General Meeting on 23 February 2024.

€ in millions Other reserves

As of 1 October 2021 1,407 Changes in other reserves during the 2023 and 2022 fiscal years were as follows:
Profit (loss) for the period attributable to shareholders
and hybrid capital investors of Infineon Technologies AG 2,179 2023 2022
Dividends to shareholders of Infineon Technologies AG (351)
€ in millions Pre-tax Tax Net of tax Pre-tax Tax Net of tax
Compensation of hybrid capital investors (39)
Currency effects (718) – (718) 1,369 – 1,369
Actuarial gains (losses) on pensions and similar commitments
net of tax of minus €25 million 310 Unrealized gains (losses)
resulting from
As of 30 September 2022 3,506 hedge accounting 2 (1) 1 (2) – (2)
Profit (loss) for the period attributable to shareholders Realized gains (losses)
and hybrid capital investors of Infineon Technologies AG 3,137 resulting from
Dividends to shareholders of Infineon Technologies AG (417) hedge accounting 5 3 8 7 (1) 6
Compensation of hybrid capital investors (39) Cost of hedging (5) 1 (4) – – –
Actuarial gains (losses) on pensions and similar commitments Total (716) 3 (713) 1,374 (1) 1,373
net of tax of minus €16 million 17
As of 30 September 2023 6,204

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 132
Notes to the Consolidated Financial Statements

21 Capital management The gross cash position decreased from €3,717 million as of 30 September 2022,
to €3,590 million as of 30 September 2023 (for details, see the chapter “Review
Infineon’s main capital management objective is to ensure financial flexibility at all of liquidity” in the Combined Management Report, p. 56). Based on revenues of
times on the basis of a solid capital structure. It is of prime importance that sufficient €16,309 million, the ratio of gross cash to revenue as of 30 September 2023 was
cash funds are available to finance operating activities and planned investments €1 billion, plus an additional 15.9 percent of revenue (30 September 2022: €1 billion,
throughout all phases of the business cycle. On the other hand, debt should only plus 19.1 percent of revenue).
constitute a modest portion of the financing mix.
With gross financial debt of €4,733 million as of 30 September 2023 (30 September
Infineon derives its long-term key objectives for capital management based on these 2022: €5,662 million), and EBITDA of €5,773 million for the 2023 fiscal year (2022:
principles and the clear target to remain investment grade. For liquidity, the gross €4,518 million), the gross debt to EBITDA ratio was 0.8 as of 30 September 2023
cash should amount to €1 billion, plus at least 10 percent of revenue. Gross financial (30 September 2022: 1.3). Infineon continues to have sufficient financial flexibility
debt should not exceed two times EBITDA. to ensure that, in addition to financing its planned investments, it is also able to
regularly pay dividends (see note 20, p. 131).
Infineon is not subject to any statutory capital requirements, nor are any such
defined in the Articles of Association. The USPP notes totaling US$2,235 million issued in April 2016 and June 2021 contain
a number of standard covenants, including a debt coverage ratio, which provides
Capital management, as well as the corresponding targets and definitions, are based for a certain relationship between the size of debt (adjusted) and earnings (adjusted).
on indicators derived from the consolidated IFRS financial statements. Gross cash
is defined as the total of cash and cash equivalents and financial investments. Gross In the 2023 fiscal year, Infineon has met the minimum requirements of all covenants.
financial debt comprises short-term and long-term financial debt. Infineon defines Should Infineon not comply with the covenants attached to the USPP notes, then
EBITDA as earnings from continuing operations before interest, taxes and depreciation all USPP notes outstanding as of 30 September 2023 amounting to US$2,235 million
and amortization. (see note 16, p. 123) could become immediately repayable.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 133
Notes to the Consolidated Financial Statements

22 Share-based payment simulation model for the prediction of share price and index developments). The
fair value of the instruments granted was determined, taking into account future
The Company makes use of the Performance Share Plan and the Restricted Stock dividends as well as the payment cap.
Unit Plan in order to provide share-based payments.
The following is an overview of the allocations made:
Performance Share Plan
A Long-Term Incentive (LTI) plan, the so-called Performance Share Plan, was developed Tranche End of the Average share Number of Fair value per
for employees and members of the Management Board. waiting period price in the performance performance
nine months shares share in €
before grant outstanding
Under this plan, (virtual) performance shares are initially provisionally granted on in € as of 30 Sep-
tember 2023
1 April (up to the 2020 fiscal year: 1 March) of the fiscal year according to a predeter-
2020 fiscal year: Employees 29 February 2024 18.10 938,666 12.95
mined LTI grant amount in euros.
2020 fiscal year:
Members of the Management Board 29 February 2024 18.10 70,850 12.50
Plan conditions for tranches up to and including 1 March 2020
With the granting of a (virtual) performance share, the participants in the plan acquire
the right to receive (real) Infineon shares once a personal investment in Infineon Plan conditions for tranches from 1 April 2021
shares – depending on position and LTI grant amount – has reached a four-year With the granting of a (virtual) performance share, the participants in the plan
holding period. acquire the right to receive (real) Infineon shares when one of the position-dependent
personal investments in Infineon shares has reached a four-year holding period.
For the tranches up to and including 1 March 2020, the performance shares are split The number of real Infineon shares to be transferred depends on the achievement
between 50 percent performance-related shares and 50 percent that are not dependent of targets during the performance period.
on performance. The performance-related shares are finally granted only when the
Infineon share outperforms the Philadelphia Semiconductor Index (SOX) during The performance period begins on 1 October of the first fiscal year of the perfor-
the period between the date of the provisional allocation and the end of the vesting mance period and ends four years later on 30 September. Performance during the
period. If at the end of the vesting period the requirements for an allocation of perfor- performance period is measured using the relative total shareholder return (TSR)
mance shares – either all or only those that are not performance-related – are fulfilled, financial performance criterion compared to companies in a selected industry peer
then entitlement to the transfer of the corresponding number of (real) Infineon shares group, together with non-financial performance criterion comprising strategy-derived
is acquired. The value of the performance shares ultimately assigned to members environmental, social and governance (ESG) objectives. The TSR target accounts
of the Management Board must not exceed 250 percent of the respective LTI grant for 80 percent and the ESG targets 20 percent of the overall target achievement. For
amount; above this cap, performance shares lapse. tranches from 1 April 2023, the TSR target accounts for 70 percent to 80 percent and
the ESG targets for 20 percent to 30 percent of the overall target achievement. TSR and
The fair value of the performance shares at the date of allocation was determined by the ESG target achievements can be between 0 percent and 150 percent.
an external expert using a recognized financial-mathematical method (Monte Carlo

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 134
Notes to the Consolidated Financial Statements

The tranche is granted on 1 April in the first fiscal year of the performance period The development of the performance shares is as follows:
(allocation day). The vesting period begins on the allocation day. In contrast to the
performance period, the vesting period ends four years after the allocation day, i.e., in number of shares (in millions) 2023 2022
on 31 March. At the end of the four-year performance period, the target achievement Outstanding performance shares at the beginning of the fiscal year 3.2 3.3
is determined. Granted 0.9 0.7
Allocated (0.4) (0.3)
The final number of performance shares to be allocated after the expiry of the Forfeited (0.5) (0.5)
vesting period is determined by multiplying the number of provisionally allocated Outstanding performance shares as of the end of the fiscal year 3.2 3.2
performance shares by the overall target achievement of the two performance criteria
during the performance period. The final allocation of the performance shares
within an LTI tranche may not result in a profit (before tax) of more than 250 percent Restricted Stock Unit Plan
of the respective LTI grant amount; above this cap, all performance shares still to Under this plan, (virtual) restricted stock units are initially provisionally granted on
be allocated lapse. 1 April (up to the 2020 fiscal year: 1 March) of the fiscal year according to a predeter-
mined LTI grant amount in euros. With the allocation of a (virtual) restricted stock
The fair value of the performance shares at the date of allocation was determined by unit, the plan participants acquire the right to receive a (real) Infineon share after the
an external expert using a recognized financial-mathematical method (Monte Carlo expiry of the vesting period, provided that the employees are still employed by Infineon
simulation model for the prediction of the share price development and the TSR target at this time. The final allocation is made in stages (each representing 25 percent of
achievements). The fair value of the instruments granted is determined taking into the provisionally allocated restricted stock units) after the expiry of the vesting period
account future dividends as well as the payment cap. of one year following allocation.

The following is an overview of the allocations made: The fair value of the restricted stock units at the date of allocation was determined
by an external expert using a recognized financial-mathematical method (Monte Carlo
Tranche End of the Average share Number of Fair value per simulation model for the prediction of share price developments). The fair value of
waiting period price in the performance performance the instruments granted is determined, taking into account future dividends.
60 trading shares share in €
days before outstanding
the start of the as of 30 Sep-
performance tember 2023
period in €
2023 fiscal year: Employees 31 March 2027 25.00 683,239 32.31
2023 fiscal year:
Members of the Management Board 31 March 2027 25.00 207,343 32.31
2022 fiscal year: Employees 31 March 2026 34.85 464,798 27.63
2022 fiscal year:
Members of the Management Board 31 March 2026 34.85 148,737 27.63
2021 fiscal year: Employees 31 March 2025 22.82 500,510 28.87
2021 fiscal year:
Members of the Management Board 31 March 2025 22.82 178,213 28.87

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 135
Notes to the Consolidated Financial Statements

The following is an overview of the allocations made: 23 Other financial commitments

Tranche End of the Price of an Number of Fair value per In addition to provisions and liabilities, there were other financial obligations that
waiting period Infineon share restricted restricted were not recognized in the Consolidated Statement of Financial Position. These
as of the stock units stock unit
grant date in € as of 30 Sep- in € resulted, in particular, from legal risks (see note 24, p. 136 ff.) and unconditional
tember 2023 purchase commitments, which are explained in more detail below.
2023 fiscal year:
1st tranche 31 March 2024 37.68 920,464 37.34 Contracts already entered into for commenced or planned investments in property,
2nd tranche 31 March 2025 37.68 920,464 36.53 plant and equipment (purchase commitments) as of 30 September 2023 amounted
3rd tranche 31 March 2026 37.68 920,464 36.16 to €2,921 million (30 September 2022: €2,344 million). Commitments arising from
4th tranche 31 March 2027 37.68 920,464 35.77 orders placed for investments in intangible asset projects amount to €1 million as of
2022 fiscal year: 30 September 2023 (30 September 2022: €6 million).
2nd tranche 31 March 2024 30.99 721,280 30.33
3rd tranche 31 March 2025 30.99 721,280 29.96 Furthermore, Infineon has committed to invest €500 million in the “European Semi-
4th tranche 31 March 2026 30.99 721,280 29.56 conductor Manufacturing Company (ESMC) GmbH” in Dresden (Germany), 100 percent
2021 fiscal year: of whose shares are currently held by Taiwan Semiconductor Manufacturing Company
3rd tranche 31 March 2024 36.16 278,708 35.29 Limited (TSMC). Infineon’s participation will amount to 10 percent.
4th tranche 31 March 2025 36.16 278,708 34.87
2020 fiscal year: In the course of its investing activities, Infineon also receives government grants
4th tranche 29 February 2024 18.62 73,146 17.31 related to the construction and financing of certain of its manufacturing facilities.
Grants are also received for selected research and development projects, and for
employee development initiatives. Certain grants have been received contingent upon
The development of the restricted stock units is as follows: Infineon complying with particular project-related requirements, such as creating
a specified number of jobs over a defined period of time. From today’s perspective,
in number of shares (in millions) 2023 2022 Infineon expects to comply with these requirements. Nevertheless, should such
Outstanding restricted stock units at the beginning of the fiscal year 4.3 1.8 requirements not be met, as of 30 September 2023, a maximum of €290 million
Granted 3.7 3.3 (30 September 2022: €275 million) of subsidies already received could be refundable.
Allocated (1.2) (0.5)
Forfeited (0.3) (0.3) Through certain sales and other agreements, Infineon may be obligated in the normal
Outstanding restricted stock units as of the end of the fiscal year 6.5 4.3 course of business to indemnify or compensate its counterparties under certain con-
ditions for warranties, patent infringement or other matters. The maximum amount
of potential future payments under these types of agreements is not predictable with
Costs for share-based payment any degree of certainty since the potential obligations are contingent on events that
The costs for share-based payment amounted to €92 million in the 2023 fiscal year may or may not occur in the future and depend on certain facts and circumstances
(2022: €62 million).

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 136
Notes to the Consolidated Financial Statements

specific to each agreement. Historically, payments made by Infineon under these Infineon Technologies Holding B.V. and Infineon Technologies Investment B.V., at the
types of agreements have not had a material effect on Infineon’s financial condition, Regional Court Munich I in November 2010. This requested that Infineon be deemed
liquidity position and results of operations. liable to make good the deficit balance of Qimonda as it stood when the insolvency
proceedings with respect to the assets of Qimonda began, i.e., to refund to Qimonda
the difference between the latter’s actual business assets when the insolvency pro-
24 Legal risks ceedings began and its share capital (in German: “Unterbilanzhaftung”). The insolvency
administrator contended that the commencement of operating activities by Qimonda
Litigation and government inquiries amounted to what is considered in case law to be the activation of a shell company
(in German: “Wirtschaftliche Neugründung”), and that this activation of a shell com-
Smart card chips antitrust litigation pany was not disclosed in the correct manner. On 6 March 2012, with respect to
In October 2008, the EU Commission initiated an investigation into the Company and another matter, the German Federal High Court issued a ruling on principle that any
other manufacturers of chips for smart cards for alleged violations of antitrust laws. liability resulting from the activation of a shell company only depends on the situa-
In September 2014, the EU Commission imposed a fine of €83 million on Infineon, tion at the date of the activation of a shell company and not, as asserted by the insol-
which in July 2020 was reduced to €76.9 million by the General Court of the European vency administrator, on the situation at the date on which insolvency proceedings
Union. are opened.

In July 2019, a direct customer filed a lawsuit against Infineon Technologies UK Limited In addition to the request for declaratory judgment against Infineon in an unspecified
and several Renesas entities in London (United Kingdom) relating to the aforemen- amount, on 14 February 2012 the insolvency administrator also lodged a request for
tioned EU antitrust case. The London court dismissed the complaint for being time- payment based on an alternative claim (in German: “Hilfsantrag”), as well as making
barred. The dismissal was confirmed by the Court of Appeal. The plaintiff filed a further other additional claims. In conjunction with this alternative claim, the insolvency
appeal to the UK Supreme Court. In December 2022, the UK Supreme Court finally administrator has requested the payment of at least €1.71 billion plus interest in con-
dismissed the complaint. nection with the alleged activation of a shell company. On 15 June 2012, the insolvency
administrator increased his request for the payment of 14 February 2012 on the
Proceedings in relation to Qimonda grounds of activation of a shell company to at least approximately €3.35 billion plus
All significant assets, liabilities and business activities attributable to the memory interest. Furthermore, the insolvency administrator continues to base a substantial
business (Memory Products) were carved out from Infineon and transferred to part of his alleged payment claims, as already asserted out of court against Infineon
Qimonda in the form of a contribution in kind with economic effect from 1 May 2006. in August 2011 for an unspecified amount, on liability for impairment of capital (in
Qimonda filed an application at the Munich local court to commence insolvency German: “Differenzhaftung”). This claim is based on the allegation that, from the
proceedings on 23 January 2009. On 1 April 2009, the insolvency proceedings were very beginning, the carved-out memory products business had a negative billion
formally opened. The insolvency of Qimonda has given rise to various disputes euro value. The insolvency administrator therefore asserts that Infineon is obliged
between the insolvency administrator and Infineon. to make good the difference between this negative value and the lowest issue price
(in German: “geringster Ausgabebetrag”) of the subscribed stock. Additionally, the
Alleged activation of a shell company and liability for impairment of capital insolvency administrator has asserted a claim for repayment of allegedly unjustly
The insolvency administrator filed a request for declaratory judgment in an unspeci- charged consultancy fees in the amount of €10 million in connection with the flotation
fied amount against Infineon Technologies AG and, by way of third-party notice, of Qimonda.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 137
Notes to the Consolidated Financial Statements

The alleged impairment of capital runs contrary to two valuations prepared as part The parties are exchanging further written submissions. It is not clear at this stage
of the preparatory documentation for the capital increase by independent auditing if the legal dispute can be resolved with an out-of-court settlement, or, if this is not
companies, one of which had been engaged by Infineon and the other of which was the case, when a first-instance court decision would be reached.
acting in the capacity of a court-appointed auditor of contributions in kind and
post-formation acquisitions. The auditing company engaged by Infineon concluded Residual liability of Infineon as former shareholder of
in its valuation that the business area contributed had a value of several times the Qimonda Dresden GmbH & Co. OHG
lowest issue price of the shares issued, while the court-appointed auditor of contribu- Infineon was a shareholder with personal liability of Qimonda Dresden until the
tions in kind and post-formation acquisitions confirmed to the court that the lowest carve-out of the memory business; as a result, certain long-standing creditors have
issue price of the shares issued was covered – as legally required – by the value of residual liability claims against Infineon. These claims can only be exercised by the
the contributions in kind. Additionally, in the course of its defense against the claims insolvency administrator acting in the name of the creditors concerned. In the mean-
asserted by the insolvency administrator, Infineon has commissioned several expert time, settlements have been concluded with most of the major liability creditors.
opinions, all of which arrived at the same conclusion that the objections raised by
the insolvency administrator against the valuation of the contribution in kind are Liabilities, provisions and contingent liabilities relating to Qimonda
not valid. Infineon recognizes provisions and liabilities for such obligations and risks, which it
assesses at the end of each reporting period, are more likely than not to be incurred
The legal dispute has, in the meantime, focused on the claims asserted for alleged (that is where, from Infineon’s perspective at the end of each reporting period, the
lack of value. On 29 August 2013, the court appointed an independent expert to probability of having to settle an obligation or risk is greater than the probability of
clarify the valuation issues raised by the insolvency administrator and to address not having to) and the obligation or risk can be estimated with reasonable accuracy
technical matters. at this time.

The legal dispute is being pursued with great effort by both parties, and many As described above, Infineon faces certain risks in connection with the insolvency
extensive written submissions have already been exchanged between the parties. proceedings relating to the assets of Qimonda and that entity’s subsidiaries. In con-
Both sides have engaged numerous specialists and experts who are supporting the sideration of the interim report from the court-appointed expert, Infineon recorded
respective parties with assessments and opinions. provisions relating to Qimonda of €212 million in total as of 30 September 2023. This
comprises mainly provisions for the still pending legal dispute over the alleged acti-
On 21 September 2018, in consultation with the parties, the independent expert vation of a shell company and liability for impairment of capital, including legal costs.
appointed by the court presented an interim report on his preliminary assessment As of 30 September 2022, provisions relating to Qimonda amounted to €211 million.
of the value of the contribution in kind. The Company is in principle prepared to
conduct discussions about an out-of-court settlement of the legal dispute on the
basis of the interim report.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 138
Notes to the Consolidated Financial Statements

There can be no certainty that the provisions recorded for Qimonda will be sufficient As part of an audit finding relating to the tax treatment of losses from the repurchase
to cover all of the liabilities that could ultimately be incurred in relation to the insol- of convertible bonds in the 2011, 2012 and 2014 fiscal years, there were contingent
vency of Qimonda and, in particular, the matters discussed above. In addition, it is liabilities of €63 million as of 30 September 2023 (2022: €63 million) for withholding
possible that liabilities and risks materialize that are currently considered to be unlikely tax on capital gains to be paid in arrears as well as corporate income tax and trade
to do so and, accordingly, represent contingent liabilities that are not included in tax of €3 million (2022: €3 million), in each case plus interest. Suspension of enforce-
provisions. Should the alleged claims relating to the activation of a shell company and ment was granted as part of the ongoing appeal proceedings for 2011 and 2012. After
liability for impairment of capital prove to be valid, substantial financial obligations completion of the current tax audit, suspension of enforcement will also be applied
above the provisions already recorded could arise for Infineon, which could have an for 2014 and the appeal proceedings will be extended accordingly. Infineon expects
adverse effect on its business and its financial condition, liquidity position and results that there is a sufficient degree of likelihood of winning any potential appeal or
of operations. legal action.

Other Provisions and contingent liabilities for legal proceedings

Infineon is also involved in various other legal disputes and proceedings in connection and other uncertain legal issues
with its existing or previous business activities. These can relate, in particular, to Provisions relating to legal proceedings and other uncertain legal issues are recorded
products, services, patents, export control and environmental issues and other matters. when it is probable that a liability has been incurred and the associated amount can
be reasonably estimated. To the extent that liabilities arising from legal disputes and
Based on its current knowledge, Infineon does not believe that the ultimate resolution other uncertain legal positions are not probable or cannot be reliably estimated, then
of these other pending legal disputes and proceedings will have a material adverse they qualify as contingent liabilities. Any potential liability is reviewed again as soon
effect on Infineon’s financial condition, liquidity position and results of operations. as additional information becomes available and the estimates are revised if necessary.
However, future revisions to this assessment cannot be ruled out, and any reassess- Provisions with respect to these matters are subject to future developments or changes
ment of the miscellaneous legal disputes and proceedings could have a material in circumstances in each of the matters, which could have a material adverse effect
adverse effect on the financial condition, liquidity position and results of operations, on Infineon’s financial condition, liquidity position and results of operations.
particularly in the period in which reassessment is made.

Furthermore, in connection with its existing or previous business operations, Infineon

is also exposed to numerous legal risks, which until now have not resulted in legal
disputes. These include risks related to product liability, environment, capital market,
anti-corruption, competition and antitrust legislation as well as export control and
other compliance regulations. Claims could also be made against Infineon in connec-
tion with these matters in the event of breaches of law committed by individual
employees or third parties.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 139
Notes to the Consolidated Financial Statements

A settlement or adverse judicial decision in any of the matters described above Related companies receivables and payables as of 30 September 2023 and 2022
could result in significant financial liabilities for Infineon and other adverse effects, consisted of the following:
and these in turn could have a material adverse effect on its business and financial
condition, liquidity position and results of operations. Irrespective of the validity 30 September 2023 30 September 2022
of the allegations and the success of the aforementioned claims and other matters
Joint Associates Other Joint Associates Other
described above, Infineon could incur significant costs in the defense of these matters. ventures related ventures related
€ in millions companies companies
Trade and other receivables 16 3 1 8 2 –
25 Transactions with related companies and persons Financial receivables 12 – 1 35 – –
Trade and other payables 30 – 2 8 – 2
Infineon has transactions in the normal course of business with joint ventures, asso- Financial payables – – 1 – – 1
ciates and other related companies (collectively “related companies”). The related
companies are disclosed in note 30, p. 165 ff.. Related persons are persons in key
management positions, in particular members of the Management and Supervisory Sales and service charges to and products and services received from related
Board (see note 30, p. 162 f.) and their close relatives (collectively “related persons”). companies in the 2023 and 2022 fiscal years consisted of the following:

Related companies 2023 2022

Infineon purchases certain raw materials and services from and sells certain products
Joint Associates Other Joint Associates Other
and services to related companies. ventures related ventures related
€ in millions companies companies
Sales and service charges 132 29 1 115 21 1
Products and
services received 120 – 21 100 – 19

As of 30 September 2023, sales and services relationships with related companies

resulted in purchase commitments of €36 million (30 September 2022: €37 million).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 140
Notes to the Consolidated Financial Statements

Related persons these provisionally allocated (virtual) performance shares amounted to €6 million
(2022: €4 million).
Total remuneration of the Management Board and Supervisory Board
according to IAS 24.17 The total remuneration of the members of the Supervisory Board in the 2023 fiscal year
The members of the Management Board and Supervisory Board active in the 2023 amounted to €3 million (2022: €3 million).
and 2022 fiscal years received the following remuneration for their activities in
accordance with IAS 24.17: Former members of the Management Board received payments of €7 million in the
Change
2023 fiscal year (2022: €3 million).
€ in millions 2023 2022 absolute in %
As of 30 September 2023, pension obligations for former members of the Management
Expense for short-term benefits1 9 11 (2) (18) Board amounted to €63 million (30 September 2022: €63 million).
Expense for share-based payment 3 2 1 50
Expense from post-employment benefits 1 1 – – In the 2023 and 2022 fiscal years, there were no significant transactions between
Expense for termination benefits2 – 11 (11) ––– Infineon and related persons that fell outside of the scope of the existing employ-
Total remuneration of the Management Board 13 25 (12) (48) ment, service or appointment terms, or the contractual arrangements for their
remuneration.
Total remuneration of the Supervisory Board3 3 3 – –
Constanze Hufenbecher resigned from her position on the Management Board with
Total remuneration of the executive bodies 16 28 (12) (43) effect from 31 October 2023; her contract of employment will end on 14 April 2024.
The Supervisory Board appointed Elke Reichart to succeed Constanze Hufenbecher
1 The expense includes the fixed remuneration, including fringe benefits and the one-year variable remuneration (STI).
2 Both Dr. Reinhard Ploss and Dr. Helmut Gassel resigned from the Management Board of Infineon Technologies AG in the 2022 fiscal year. with effect from 1 November 2023 until 31 October 2026.
Their employment contracts continued until 31 December 2022 and 30 September 2022, respectively. For this period, Dr. Reinhard Ploss
and Dr. Helmut Gassel were entitled to remuneration in full. In addition, Dr. Helmut Gassel was granted a severance payment and agreed
to a post-contractual non-competition clause that runs until November 2023, for which Dr. Helmut Gassel received compensation. With regard to the disclosures on the individual remuneration of the members of the
3 Employee representatives on the Supervisory Board who are employed by Infineon also receive a salary for their activities as employees.
Management Board and Supervisory Board pursuant to section 162 of the German
Stock Corporation Act (AktG), reference is made to the Remuneration Report prepared
Total remuneration of the Management Board and Supervisory Board according to stock corporation law, which can be found under the following link:
pursuant to section 314, paragraph 1, no. 6 in conjunction with www.infineon.com/remuneration-report
section 315e, paragraph 1, HGB
The total remuneration of the members of the Management Board for their active The references to the Remuneration Report were not audited as part of the audit
service pursuant to section 314, paragraph 1, no. 6 in conjunction with section 315e, of the financial statements. The Remuneration Report was subjected to a separate
paragraph 1, HGB amounted to €9 million (2022: €15 million). This includes a long-term substantive audit by the auditor in accordance with IDW PS 490. This audit also
incentive (LTI) in the form of a performance share plan (see note 22, p. 133 f.). A total includes the formal audit required by section 162, paragraph 3 of the German Stock
of 193,373 (virtual) performance shares (2022: 148,737) were provisionally allocated Corporation Act (AktG).
to the members of the Management Board in the 2023 fiscal year. The fair value of

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 141
Notes to the Consolidated Financial Statements

26 Supplemental cash flow information of consolidated companies located in countries where the transfer of cash is legally
restricted, for example, China.
Cash and cash equivalents reported as of 30 September 2023 and 2022 totaling
€1,820 million and €1,438 million, respectively, included €50 million and €69 million, The reconciliation below shows changes in those financial liabilities and hedging
respectively, which were subject to legal transfer restrictions and so were not avail- transactions for which payments received and made are shown under cash flows from
able for general use by Infineon. This amount represented cash and cash equivalents financing activities in the statement of cash flows.

Starting balance Cash-effective Non-cash-effective changes Carrying amount

changes
€ in millions Acquisitions Currency effects New leases Other changes
The 2023 fiscal year
Short-term and long-term financial debt 5,662 (753) – (182) – 6 4,733
Related party financial payables 1 – – – – – 1
Current and non-current lease liabilities 386 (86) – (17) 100 (2) 381
Total 6,049 (839) – (199) 100 4 5,115
The 2022 fiscal year
Short-term and long-term financial debt 6,585 (1,393) 3 461 – 6 5,662
Related party financial payables 2 (1) – – – – 1
Current and non-current lease liabilities 331 (84) – 17 122 – 386
Total 6,918 (1,478) 3 478 122 6 6,049

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 142
Notes to the Consolidated Financial Statements

27 Additional disclosures on financial instruments

Categories of financial instruments
The following tables present the carrying amounts and the fair values of financial
instruments by their respective classes and a breakdown by category of financial
instruments as of 30 September 2023 and 2022 according to IFRS 9:

Carrying amount Categories of financial assets Not assignable to any Fair value
IFRS 9 measurement
category

At fair value through At amortized cost Designated hedging

profit or loss instruments
€ in millions (cash flow hedges)
As of 30 September 2023
Current assets:
Cash and cash equivalents 1,820 1,169 651 – 1,820
Financial investments 1,770 1,770 – – 1,770
Trade receivables 1,991 – 1,991 – 1,991
Other current assets 363 2 353 8 363
Non-current assets:
Other non-current assets 208 113 95 – 208
Total 6,152 3,054 3,090 8 6,152
As of 30 September 2022
Current assets:
Cash and cash equivalents 1,438 1,045 393 – 1,438
Financial investments 2,279 2,039 240 – 2,279
Trade receivables 1,887 – 1,887 – 1,887
Other current assets1 93 5 88 – 93
Non-current assets:
Other non-current assets1 205 108 97 – 205
Total 5,902 3,197 2,705 – 5,902

1 The presentation of grants receivables as well as of some of the advance payments made was corrected in the 2023 fiscal year. These are now no longer reported under current or non-current financial assets. The previous year’s figures have been adjusted to improve comparability.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 143
Notes to the Consolidated Financial Statements

Carrying amount Categories of financial assets Not assignable to any IFRS 9 Fair value
measurement category

At fair value through Other Designated hedging Others

profit or loss financial liabilities instruments
€ in millions (amortized cost) (cash flow hedges)
As of 30 September 2023
Current liabilities:
Short-term financial debt and current portion
of long-term financial debt 330 – 330 – – 333
Trade payables 2,765 – 2,765 – – 2,765
Current lease liabilities 72 – – – 72 –
Other current liabilities 993 4 987 2 – 993
Non-current liabilities:
Long-term financial debt 4,403 – 4,403 – – 3,915
Non-current lease liabilities 309 – – – 309 –
Other non-current liabilities 130 – 130 – – 130
Total 9,002 4 8,615 2 381 8,136
As of 30 September 2022
Current liabilities:
Short-term financial debt and current portion
of long-term financial debt 752 – 752 – – 742
Trade payables 2,260 – 2,260 – – 2,260
Current lease liabilities 76 – – – 76 –
Other current liabilities 975 22 950 3 – 975
Non-current liabilities:
Long-term financial debt 4,910 – 4,911 – – 4,333
Non-current lease liabilities 310 – – – 310 –
Other non-current liabilities 67 – 67 – – 67
Total 9,350 22 8,940 3 386 8,377

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 144
Notes to the Consolidated Financial Statements

Within financial assets measured at amortized cost, financial assets with a The allocation to the levels as of 30 September 2023 and 2022 was as follows:
carrying amount of €13 million (previous year: €14 million) were included as of
30 September 2023, which Infineon has pledged mainly as collateral for rental Fair value Fair value by category
liabilities.
€ in millions Level 1 Level 2 Level 3

In the 2023 and 2022 fiscal years, there were no reclassifications between the 30 September 2023
categories of financial instruments. Current assets:
Cash and cash equivalents 1,169 1,169 – –
Disclosures about fair value Financial investments 1,770 1,770 – –
Other current assets 10 – 2 8
Financial instruments at fair value Non-current assets:
Financial instruments measured at fair value are allocated to the following measure- Other non-current assets 113 103 – 10
ment levels in accordance with IFRS 13. The allocation to the different levels is Total 3,062 3,042 2 18
based on the market proximity of the valuation parameters used in the determination Current liabilities:
of the fair values: Other current liabilities 6 – 5 1
Total 6 – 5 1
› Level 1: quoted prices (unadjusted) in active markets for identical assets and 30 September 2022
liabilities, Current assets:
Cash and cash equivalents 1,045 1,045 – –
› Level 2: valuation parameters whose prices are not considered in level 1, but which Financial investments 2,039 2,039 – –
can be observed either directly or indirectly for the asset or liability, Other current assets 5 – 5 –
Non-current assets:
› Level 3: valuation parameters for assets and liabilities that are not based on Other non-current assets 108 94 – 14
observable market data. Total 3,197 3,178 5 14
Current liabilities:
Other current liabilities 25 – 25 –
Total 25 – 25 –

Cash equivalents and financial investments included investments in money market

funds and investment funds (level 1).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 145
Notes to the Consolidated Financial Statements

Other current assets and other current liabilities contained derivative financial instru- The following table shows the reconciliation of financial instruments classified as
ments (including cash flow hedges). Their fair value was determined by discounting level 3 (before tax):
future cash flows according to the discounted cash flow method. Where possible, Deal contingent Deal contingent Equity
valuation parameters observed on the reporting date in the relevant markets (such € in millions option forward investments

as currency rates, interest rates, or commodity prices) drawn from reliable external 1 October 2021 – – 16
market data providers were used (level 2). Where fair values are determined on the Unrealized losses recognized in profit or loss1 – – (2)
basis of non-observable factors, these are assigned to level 3. 30 September 2022 – – 14
Acquisitions (including additions) 13 – –
The determination of the fair values of the deal contingent forward and deal contingent Unrealized losses recognized in profit or loss1 – – (4)
option designated as cash flow hedges (see “Derivative financial instruments and Losses in equity (5) (1) –
hedging activities”, p. 147 ff.) were determined on the basis of factors observable in 30 September 2023 8 (1) 10
markets such as forward prices, interest rate curves and volatilities. In addition, the
1 This relates to gains recognized in financial income or losses recognized in financial expenses.
assumption about the date of completion of the acquisition was taken into account
as a non-observable factor (level 3).
A hypothetical change in the material on the market non-observable valuation
Other non-current assets included equity investments and investments in funds. Where parameters at the balance sheet date of ± 10 percent or one month would have resulted
these are traded on an active market, the fair value was based on the actual market in a theoretical reduction in fair values of €1 million or an increase of €1 million
price (level 1). In addition, other non-current assets included derivative financial (previous year: both €1 million).
instruments whose fair value was calculated using recognized financial-mathematical
models, with only observable input parameters included in the measurement (level 2).
For equity investments where no market price from an active market is available, the
fair value was determined by considering existing contractual arrangements based
on externally observable dividend policy (level 3).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 146
Notes to the Consolidated Financial Statements

Financial instruments at amortized cost Gains and losses in relation to financial instruments
For assets allocated to the category “At amortized cost”, it is assumed that the The net gain or loss on financial instruments (including interest income and expense)
fair values correspond to their carrying amounts. The same assumption applies to in the Consolidated Statement of Profit or Loss amounted to the following as of
liabilities resulting from trade payables and other current liabilities categorized as 30 September 2023 and 2022:
“Other financial liabilities (amortized cost)”. Change

€ in millions 2023 2022 absolute in %

The fair value of current and non-current financial debt that is measured at amortized
Financial assets measured at amortized cost (57) 255 (312) –––
cost is based either on quoted prices as of the reporting date (level 1) or is determined
therein interest income 42 11 31 +++
based on expected future cash flows discounted using a current market interest rate
therein impairment losses 1 1 – –
(level 2).
therein currency effects (101) 243 (344) –––
therein other financial expenses 1 – 1 +++
The allocation to the levels of current and non-current financial debt measured at
Financial assets measured at fair value
amortized cost as of 30 September 2023 and 2022 was as follows: through profit and loss (3) (13) 10 77
Financial liabilities measured at amortized cost 51 (544) 595 +++
Fair value Fair value by category therein interest expenses (126) (129) 3 2

€ in millions Level 1 Level 2 Level 3 therein currency effects 177 (414) 591 +++
therein other financial expenses – (1) 1 +++
30 September 2023
Financial assets or liabilities measured at fair value
Short-term financial debt and current portion through profit and loss – held for trading (17) 118 (135) –––
of long-term financial debt 333 – 333 –
therein currency effects (17) 118 (135) –––
Long-term financial debt 3,915 2,370 1,545 –
Total (26) (184) 158 86
Total 4,248 2,370 1,878 –
30 September 2022
Short-term financial debt and current portion
of long-term financial debt 742 739 3 – Interest expense on financial liabilities measured at amortized cost mainly included
Long-term financial debt 4,333 2,353 1,980 – interest on financial debt and effects from using the effective interest method.
Total 5,075 3,092 1,983 –

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 147
Notes to the Consolidated Financial Statements

Infineon does not net financial instruments. The Company conducts derivative Derivative financial instruments designated as a hedging relationship
transactions according to the global netting agreement (Master Agreement) of the As of 30 September 2023 and 2022, Infineon held the following instruments, which
International Swaps and Derivatives Association (ISDA) and other comparable were designated as cash flow hedges and were used to hedge against foreign
national framework agreements. Under the terms of these agreements, any netting exchange and commodity price changes:
arising from the occurrence of certain future events would have had no material Short term
effect on the balance sheet presentation of these financial instruments. 30 September 2023
Hedging of foreign exchange risks
Derivative financial instruments and hedging activities Deal contingent forward
Infineon holds derivative financial instruments exclusively for hedging purposes. This Nominal value (US dollar in millions) 415
includes the use of forward exchange contracts and interest- and commodity swaps. Average forward rate (euro/US dollar) 1.0574
The objective is to reduce the impact of the exchange rate, interest rate and commodity Deal contingent option
price fluctuations on future net cash flows. Nominal value (US dollar in millions) 415
Average forward rate (euro/US dollar) 1.0575
Derivative financial instruments not designated as a hedging relationship Hedging of other risks
The nominal values and fair values of Infineon’s derivative instruments as of Commodity swaps
30 September 2023 and 2022 that were not designated as cash flow hedges were Nominal value (€ in millions) 24
as follows: Average price (US dollar/ounce) 2,008
30 September 2022
30 September 2023 30 September 2022
Hedging of other risks
Nominal Fair value Nominal Fair value Commodity swaps
€ in millions value value
Nominal value (€ in millions) 51
Forward exchange contracts sold 191 (4) 420 (18) Average price (US dollar/ounce) 1,797
Forward exchange contracts purchased 384 2 337 1
Total (2) (17)
In order to hedge the foreign currency risks attributable to the purchase price obliga-
tion arising from the acquisition of GaN Systems (see note 3, p. 107 f.), a contingent
(transaction-dependent) euro/US dollar foreign currency forward (deal contingent
forward) and a contingent (transaction-dependent) euro/US dollar foreign currency
option (deal contingent option), each with a nominal value of US$415 million, were con-
cluded on 2 March 2023 and were accounted for as cash flow hedges. At the inception
of the hedging trans­action, and on a continuing basis, Infineon verifies the existence
of an economic relationship between the hedged item and the hedging instrument
(critical term). For the abovementioned hedging transactions, the hedge ratio was 1:1.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 148
Notes to the Consolidated Financial Statements

As part of the hedging, only the spot component of the deal contingent forward and the Consolidated Statement of Profit or Loss for these hedging relationships. As in the
intrinsic value of the deal contingent option were designated as hedging instruments. previous year, no gains or losses were transferred from other reserves to profit or loss
The forward elements of the deal contingent forward, and the time value of the deal as a result of cash flow hedges for future raw material purchases being canceled
contingent option, each containing a contingency component, are excluded from the following the decision that the occurrence of the hedged transaction had become
designation of hedging instrument and were considered in the recognition of costs unlikely.
of hedging and disclosed in equity in a reserve for the costs of hedging, to the extent
that they can be attributed to the hedged item. No material ineffective elements arising Effects from derivative financial instruments designated
from the deal contingent forward or the deal contingent option were recognized in as a hedging relationship
the Consolidated Statement of Profit or Loss in the 2023 fiscal year. Any ineffectiveness The amounts relating to positions that were designated as hedged items as of
was attributable to changes in the expected timing of the payment of the purchase 30 September 2023 and 2022 are shown in the table below.
price in US dollars as well as the contingency component contained within the hedg-
ing instruments and the credit default risk. With the completion of the acquisition Change in the value Hedge reserve Cost of
of GaN Systems on 24 October 2023, the deal contingent forward and deal contingent of the hedged item (before taxes) hedging reserve
used to determine (before taxes)
option became due and the hedge was closed. The effective portion of the hedge € in millions ineffectiveness
and the cumulative amounts recognized in the reserve for the costs of hedging were 30 September 2023
reclassified as costs of the acquisition of GaN Systems and were therefore taken into Hedging of foreign exchange risk
account in determining the goodwill arising from the transaction. Deal contingent forward 1 (1) –
Deal contingent option 5 – (5)
To hedge the price risks of highly probable gold purchases in the 2024 fiscal year, Hedging of commodity price risks 1 (1) –
Infineon entered into swaps, which are designated as cash flow hedges. The designated Total (2) (5)
hedged items and the hedging instruments were subject to the same risk. The eco- 30 September 2022
nomic connection was proven by means of a regression analysis. Due to the execu- Hedging of commodity price risks 2 (2) –
tion of only highly effective hedging transactions, Infineon assumes that significant Total (2) –
ineffective elements will normally not be generated. Infineon applies a hedging ratio
of 1:1. Ineffectiveness can be caused mainly by the impact of the credit risks arising
from the counterparty and Infineon on the fair value of the swap that is not reflected In the 2023 and 2022 fiscal years, no balances remained in other comprehensive
in the change in the fair value of hedged cash flows attributable to changes in raw income for which hedge accounting was no longer applied.
material prices. As in the previous year, no hedge ineffectiveness was recorded in the

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 149
Notes to the Consolidated Financial Statements

The relevant amounts of the derivative financial instruments designated as hedging

instruments as of 30 September 2023 and 2022 (before taxes) were as follows:

Carrying amount Changes in fair value Changes in fair value Changes in fair value Amount reclassified Line item of the Statement
for the measurement of the hedging instrument of cost of hedging from the hedge reserve of Financial Position
of the ineffectiveness recognized in other recognized in other to the cost of or the Statement of
in the reporting period comprehensive income comprehensive income non-financial assets Profit or Loss affected
€ in millions by the reclassification
30 September 2023
Other current assets:
Hedging of foreign exchange risks
Deal contingent option 8 5 – (5)
Other current liabilities:
Hedging of foreign exchange risks
Deal contingent forward 1 1 (1) –
Hedging of commodity price risks 1 1 (1) 1 Inventories
Total 7 (2) (5) 1
30 September 2022
Other current liabilities:
Hedging of commodity price risks 3 (2) (2) – – Inventories
Total (2) (2) – –

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 150
Notes to the Consolidated Financial Statements

The following table shows the reconciliation for the reserve for cash flow hedges The FT department’s policies contain principles for overall risk management as well
(before taxes) by risk category: as guidance covering specific areas such as foreign exchange risk, interest rate risk,
credit risk, the use of derivative and non-derivative financial instruments, and the
Hedging of Hedging of Hedging of Total investment of excess liquidity.
foreign interest risks commodity
exchange price risks
€ in millions risks Developments in cyclical market and segment risks as well as geopolitical risks are
1 October 2021 – (49) (1) (50) dynamic and can have direct and indirect effects on financial risks. The course of
Change in fair value – – (2) (2) events and their impact on Infineon’s risk position is continually monitored and
Amount reclassified to Statement taken into account in the methods, models and processes used to control financial
of Profit or Loss – 8 – 8 risks. Possible longer-term effects on Infineon and the associated volatility in the
30 September 2022 – (41) (3) (44) financial markets cannot actually be estimated more precisely.
Change in fair value (6) – 3 (3)
Amount reclassified to Statement Market risk
of Profit or Loss – 7 – 7 Market risk is defined as the risk of losses resulting from adverse changes in the
Amount reclassified to the market prices of financial instruments, including those related to foreign exchange
cost of non-financial items – – (1) (1)
rates, interest rates and other price risks.
30 September 2023 (6) (34) (1) (41)

Infineon is exposed to various market risks in the ordinary course of business, primar-
ily resulting from changes in foreign exchange rates and interest rates. Infineon enters
into a range of derivative financial transactions with various counterparties to limit
28 Financial risk management such risks. Derivative instruments are used only for hedging purposes and not for
trading or speculative purposes.
Infineon’s activities are exposed to a variety of financial risks: market risk (including
foreign exchange risk, interest rate risk and price risk), credit risk, financing and Foreign exchange risk
liquidity risk. Infineon’s financial risk management seeks to minimize potential Foreign exchange risk within the meaning of IFRS 7 is the risk arising from changes
adverse effects on its profitability and liquidity. Infineon uses derivative financial to foreign exchange rates. Accordingly, foreign exchange risks are associated with
instruments to hedge certain risks to which it is exposed. Financial risk management financial instruments that are denominated in a foreign currency that does not
is undertaken by the central Finance & Treasury (FT) department in accordance correspond to the functional currency, and the foreign currency represents the
with policies approved by the Chief Financial Officer. The FT department identifies, relevant risk variable. Risks arising from the translation into Infineon’s reporting
evaluates and hedges financial risks in close cooperation with the operating units. currency are not risks within the meaning of IFRS 7.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 151
Notes to the Consolidated Financial Statements

Although Infineon prepares the Consolidated Financial Statements in euros, a varying Foreign exchange risk at Infineon arises predominantly from main foreign currency
but significant portion of its revenue, as well as cost of goods sold, research and positions. The following table shows the value of the net risk position as of
development and product distribution costs, are denominated in currencies other 30 September 2023 and 2022:
than the euro, primarily the US dollar. Fluctuations in the exchange rates of these
30 Septem- 30 Septem-
currencies compared to the euro had an effect on the results of Infineon in the 2023 € in millions ber 2023 ber 2022
and 2022 fiscal years. Euro/US dollar 187 (292)
Euro/Japanese yen (171) (131)
The Management Board has established policies that require Infineon’s individual Euro/Singapore dollar (47) (82)
legal entities to manage the foreign exchange risk with respect to their functional Euro/Malaysian ringgit (104) (106)
currency. Group entities prepare a monthly rolling cash flow forecast by currency Euro/British pound – (7)
in order to determine foreign exchange risks. The net foreign exchange positions Financial position exposure (135) (618)
determined in these forecasts are required to be hedged, usually by entering into Euro/US dollar (101) (330)
internal hedging contracts. Infineon’s policy with respect to limiting short-term Euro/Japanese yen 129 82
foreign currency exposure is to hedge at least 75 percent of its estimated net cash Euro/Singapore dollar 53 50
flow for the following two months, at least 50 percent of its estimated net cash flow Euro/Malaysian ringgit 107 102
for the third month and, depending on the nature of the underlying transactions, Euro/British pound 5 5
a certain additional portion for the periods thereafter. Part of the foreign currency Forward exchange contracts 193 (91)
risk cannot be mitigated due to differences between actual and forecasted amounts. Net risk position 58 (709)
Infineon calculates this remaining risk based on net cash flows considering items
in the Statement of Financial Position, actual orders received or placed and all other
planned cash receipts and payments. The following table shows the effects on profit or loss for the 2023 and 2022 fiscal years
of a ± 10 percent shift in exchange rates. The assumed exchange rate changes relate
In order to hedge the foreign currency risks arising from the purchase price obligation only to financial instruments within the meaning of IAS 32.
arising from the acquisition of GaN Systems, a deal contingent forward and a deal
contingent option were concluded by Infineon in the 2023 fiscal year and were
Profit or Loss Equity
accounted for as cash flow hedges (see note 27, p. 145).
€ in millions plus 10% minus 10% plus 10% minus 10%
For the net result related to foreign currency hedging transactions and foreign currency 30 September 2023 (9) (2) (44) 72
transactions included within profit (loss) for the period, see note 27. p. 142 ff. Euro/US dollar (12) 2 (44) 72
Euro/Japanese yen 4 (5) – –
Euro/Singapore dollar (1) 1 – –
30 September 2022 65 (79) – –
Euro/US dollar 57 (69) – –
Euro/Japanese yen 5 (6) – –
Euro/Singapore dollar 3 (4) – –

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 152
Notes to the Consolidated Financial Statements

Interest rate risk The following table shows the effects on profit or loss for the 2023 and 2022 fiscal years
In accordance with IFRS 7, interest rate risk is defined as the risk that the fair value of a ± 100 basis points shift in market interest rates:
or future cash flows of a financial instrument will fluctuate because of changes in
interest rates. Nominal Profit or loss
value
Infineon is exposed to interest rate risk through its financial investment instruments plus 100 minus 100
€ in millions basis points basis points
and financial debt resulting from bond issuances and debt financing. Due to the
30 September 2023 2,940 29 (29)
cyclical nature of its core business and the need to maintain high operational flexibil-
Variable-interest financial assets 2,940 29 (29)
ity, Infineon holds a relatively high level of liquid financial assets that are invested
30 September 2022 3,084 31 (31)
in short-term fixed-interest instruments. These financial assets generally are invested
Variable-interest financial assets 3,084 31 (31)
with a contract duration of between one day and twelve months maturity at interest
rates achievable in the short-term. The associated interest rate risk is compensated
to a certain extent by financial liabilities, which generally have fixed interest rates.
Other price risk
To reduce the net remaining risks caused by changes in interest rates, Infineon is able According to IFRS 7, other price risk is defined as the risk that the fair value or future
to make use of interest rate derivatives in order to align the fixed interest periods of cash flows of a financial instrument could fluctuate because of changes in market prices
assets and liabilities. (other than those arising from interest rate risk or exchange rate risk), irrespective
of whether those changes are caused by factors specific to the individual financial
IFRS 7 requires a sensitivity analysis showing the effect of possible changes in market instrument or its issuer, or by factors affecting all similar financial instruments traded
interest rates on profit or loss. Infineon prepares this using the iteration method. in the market.

Changes in market interest rates affect Infineon’s interest income and expenses from In the 2023 and 2022 fiscal years, Infineon held financial instruments that were
variable-yield financial instruments as well as from fixed-yield financial instruments exposed to market price risks. A change in the relevant market prices would have had
that were measured at fair value through profit or loss. no significant impact on the results of the 2023 and 2022 fiscal years.

Additionally, Infineon is exposed to price risks with respect to raw materials upon
which it is dependent. Infineon seeks to minimize these risks through its procure-
ment policy (including the use of multiple sources, where possible) and its operating
procedures. In line with these measures, Infineon concluded additional financial
derivative contracts for certain commodity supplies (gold) for the following fiscal year
in order to mitigate the remaining risk arising from the fluctuation of commodity
prices (see note 27, p. 147).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 153
Notes to the Consolidated Financial Statements

The following table presents the effect on equity of a change in the relevant market Infineon applies the general impairment model in accordance with IFRS 9 for cash and
prices by ± 10 percent as of 30 September 2023 and 2022. cash equivalents as well as financial investments. Since Infineon invests exclusively
in high-quality financial assets from issuers with a rating of at least investment grade
Equity
in order to minimize default risk, Infineon assumes that its financial assets carry low
Nominal
value credit risk arising from the creditworthiness of its contract parties, so that any impair-
€ in millions plus 10% minus 10% ment loss recorded at first-time recognition is limited to the twelve-month expected
30 September 2023 credit losses. Infineon considers low credit risk to be an internal credit rating “Holding
Commodity swaps 24 2 (2) Quality 1”. A change in the internal rating from “Holding Quality 1” to “Holding Qual-
30 September 2022 ity 0” indicates a significant increase in credit risk. The impairment is calculated using
Commodity swaps 51 5 (5) a weighted-probability method. This impairment is calculated as a measure of the
probability of default based on the exposure at the balance sheet date, the loss ratio
for that exposure, and the credit default swap spread.
Credit risk
Credit risk arises when a customer or other counterparty of a financial instrument The following table provides information on the credit risk for cash and cash equi­valents
fails to discharge its contractual obligations. Infineon is exposed to this risk as a con- measured at amortized cost, as well as financial investments as of 30 September 2023
sequence of its ongoing operations, its financial investments and certain financing and 2022:
activities. Infineon’s credit risk arises primarily from cash and cash equivalents, finan-
cial investments, trade receivables and derivative financial instruments. Excluding € in millions At amortized cost
the impact of any collateral received, in the case of financial investments, cash and Basis for the Expected 12-month Expected lifetime
cash equivalents, trade receivables, and financial assets measured at amortized cost, determination of credit loss credit loss
Infineon rating External rating the loss allowance non-credit-impaired
the carrying amount corresponds to the maximum credit risk.
30 September 2023
Foreign exchange hedging contracts, as well as the investment of liquid assets in cash Holding Quality 1 AA – to BBB 651 – –
equivalents and financial investments, are entered into with major financial institu- Holding Quality 0 – – – –
tions worldwide that have high credit ratings. Infineon assesses the creditworthiness Total 651 – –
of banks using a methodology that establishes investment limits for individual banks 30 September 2022
that are updated on a daily basis according to current external ratings and credit Holding Quality 1 AA – to BBB 633 – –
default swap premiums. Possible breaches of stipulated investment thresholds result Holding Quality 0 – – – –
in immediate notification and the requirement to reduce the risk. This methodology Total 633 – –
is also used to identify a significant increase in credit risk in the context of the recog-
nition of expected credit losses within the meaning of IFRS 9 at the balance sheet date.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 154
Notes to the Consolidated Financial Statements

As in the previous year, Infineon had no financial assets that were overdue or impaired probability of default provided by a credit rating agency. Individual allowances are
as of 30 September 2023. There was no reclassification between the impairment recorded based on case-by-case facts or other risk indicators.
levels in the 2023 and 2022 fiscal years.
The following table provides information about the credit risk position for trade
Infineon had slightly reduced the distribution of its cash investments over around receivables from third parties as of 30 September 2023 and 2022:
ten banks as of 30 September 2023. As of 30 September 2023, no financial institution
was responsible for more than 18 percent (30 September 2022: 13 percent) of € in millions At amortized cost
Infineon’s cash investments. This gave rise to a maximum risk position of €76 million
Infineon rating Risk class External rating Basis for the determination
(30 September 2022: €55 million) in the event of the default of a single financial of the loss allowance
institution, assuming no deposit insurance scheme is in place. In addition, to spread 30 September 2023 30 September 2022
the risk of investment, investments were made in money market funds with the
1 low risk A– to AAA 586 300
best rating and in money market investment funds. Infineon also held derivative
2 average risk BBB to BBB+ 490 714
financial instruments with a positive fair value of €10 million as of 30 September 2023
3 above average risk BB+ to BBB– 450 559
(30 September 2022: €5 million).
4 increased risk BB– to BB 304 221
5 high risk C to B+ 102 62
Infineon manages the credit risk with respect to trade receivables through a com­
– individual none 3 4
prehensive credit evaluation for all major customers, the use of credit limits and
– others none 43 23
continual monitoring procedures. New customers are evaluated for creditworthiness
Total 1,978 1,883
in accordance with Infineon guidelines. Credit limits are also in place per customer,
and creditworthiness and credit limits are constantly monitored. A further measure
taken to reduce credit risk is the use of reservation of title clauses. However, despite
continuous monitoring, Infineon cannot fully exclude the possibility of a loss arising Expected credit losses on trade receivables (see note 10, p. 116) amounted to €2 million
from the default of one of its contract parties. for all risk classes in both the 2023 and 2022 fiscal years. The individual allowances
on trade receivables (no rating) amounted to €3 million as of 30 September 2023
Infineon assigns trade receivables to different risk classes based on external ratings, (30 September 2022: €4 million).
the analysis of customer balance sheet figures, default probabilities (credit default
swaps), customer payment behavior and country risks. The simplified method is used Developments in cyclical market and segment risks as well as geopolitical risks are
to determine the expected losses from trade receivables. The expected losses over dynamic, so it cannot be ruled out that the actual credit losses deviate significantly
the entire term of the trade receivables are determined. The allowance is calculated from the expected credit losses recognized based on current estimates and assump-
for each customer using a weighted-probability method. In calculating the expected tions or that the affected estimates and assumptions will have to be adjusted in future
credit losses, for each customer, Infineon takes into account a forward-looking periods and this could have a significant impact on Infineon’s expected credit losses.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 155
Notes to the Consolidated Financial Statements

Financing and liquidity risk The following table discloses the maturity profile for non-derivative financial liabilities
Financing and liquidity risk is the risk that an entity will encounter difficulties in and a cash flow analysis for derivative financial instruments with negative fair values.
meeting obligations associated with financial liabilities. The table shows the undiscounted contractually agreed cash flows that result from
the respective financial liability. Cash flows are recognized at the date when Infineon
Liquidity risk could arise from a potential inability of Infineon to meet maturing becomes a contractual partner to the financial instrument. Amounts in foreign cur-
financial obligations. Infineon’s liquidity management provides that sufficient rencies were translated using the closing rate at the reporting date. The cash outflows
levels of cash and other liquid assets are available and ensures the availability of financial liabilities that can be repaid at any time are assigned to the period in
of funding through adequate levels of committed credit facilities. which the earliest redemption is possible.

Due in the fiscal year

€ in millions Total 2024 2025 2026 2027 2028 Beyond 2028

30 September 2023
Non-derivative financial liabilities 9,544 4,168 705 1,246 456 324 2,645
Derivative financial liabilities:
Cash outflow 574 574 – – – – –
Cash inflow1 (526) (526) – – – – –
Total 9,592 4,216 705 1,246 456 324 2,645

Total 2023 2024 2025 2026 2027 Beyond 2027

30 September 2022
Non-derivative financial liabilities 10,081 4,133 554 681 1,294 473 2,946
Derivative financial liabilities:
Cash outflow 596 596 – – – – –
Cash inflow1 (557) (557) – – – – –
Total 10,120 4,172 554 681 1,294 473 2,946

1 Cash inflows from derivative financial liabilities that arise upon settlement of the instrument.

Future cash flows from derivative financial instruments (see note 27, p. 147 ff.) may
differ from the amounts shown in the table, since exchange rates or relevant factors
are subject to change.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 156
Notes to the Consolidated Financial Statements

29 Segment reporting Power & Sensor Systems

The Power & Sensor Systems segment comprises a wide range of power semiconductor,
Identification of segments radio frequency and sensor technologies. The portfolio of products consists of control
The basis for identifying the reporting segments is the differences between the ICs, drivers and MOSFET power transistors, USB controllers and radio frequency
products and applications. In the 2023 fiscal year, Infineon’s business was structured products such as RF antenna switches, RF power transistors and signal amplifiers.
into the four operating segments Automotive, Green Industrial Power, Power & Sensor
Systems and Connected Secure Systems. In addition, Infineon differentiates Other Connected Secure Systems
Operating Segments as well as Corporate and Eliminations. The Connected Secure Systems segment provides comprehensive systems which are
based on microcontrollers as well as on wireless connectivity and security solutions.
Automotive Notably, this includes microcontroller, Wi-Fi, Bluetooth and combined connectivity
The Automotive segment designs, develops, manufactures and markets semicon­ solutions (so-called combo chips), hardware-based security technologies, and a
ductor products for automotive applications. These include powertrain and energy powerful software environment for programming and configuring microcontrollers
management, connectivity and infotainment, body and comfort electronics, safety and connectivity components, covering a wide range of applications including:
and data security. The product portfolio ranges from sensors, microcontrollers, devices for IoT applications, home appliances and smart home appliances, IT equip-
software solutions, reliable power supplies, storage systems for specific applications, ment, consumer electronics, cloud security and connected vehicles, as well as credit
Si and SiC power semiconductors, as well as components for human-machine and debit cards, electronic passports and national identity cards.
interaction and vehicle connectivity.
Other Operating Segments
Green Industrial Power Other Operating Segments comprise the remaining activities of divested businesses
The Industrial Power Control segment was renamed Green Industrial Power with and other business activities. Since the sale of the Wireless mobile phone business,
effect from 1 April 2023. Decarbonization, electrification and energy efficiency are key services to Intel Mobile Communications and MaxLinear are included in this segment.
business drivers in this segment. This focus, together with the decisive contribution Also included are supplies of LDMOS wafers and related components and services
that the segment makes to CO2 reduction, is reflected in the new name. The name to Wolfspeed, Inc. (formerly Cree, Inc.), since the sale of the major part of Infineon’s
change has no impact on the organizational structure, the strategy, or the scope of Radio Frequency Power Components business.
the business. The Green Industrial Power segment specializes in semiconductor solu-
tions for the intelligent management and efficient conversion of electrical energy
across the entire conversion chain, comprising the generation, transmission, storage
and use of electricity. The product portfolio comprises mainly IGBT power transistors
and the driver ICs to control them, as well as power semiconductors based on SiC.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 157
Notes to the Consolidated Financial Statements

Corporate and Eliminations Segment Result is defined as operating profit excluding certain net impairments
The elimination of intragroup revenue and profits/losses to the extent that these and reversal of impairments (in particular on goodwill), the impact on earnings of
arise between the segments is presented in Corporate and Eliminations. restructuring and closures, share-based payment, acquisition-related depreciation/
amortization and other expense, impact on earnings of sales of businesses or interests
Similarly, certain items are included in Corporate and Eliminations which are not in subsidiaries, and other income (expense).
allocated to the other segments. These include certain corporate headquarters costs
and selected topics, which are not allocated to the segments since they arise from Decisions relating to financing and the investment of cash funds are taken at a
corporate decisions and are not within the direct control of segment management. Group level and not at a segment level. For this reason, neither financial income nor
financial expense (including interest income and expense) is allocated internally to
Furthermore, raw materials and supplies are mostly not under the control or respon- the segments.
sibility of the operating segment management and are therefore mostly allocated
to corporate functions. Work in progress and finished goods are almost entirely Neither assets, liabilities nor cash flows per segment is reported to the Management
allocated to the operating segments. Board on a regular basis, nor is segment performance assessed on this basis.

Chief Operating Decision Maker, definition of Segment Result and The exception to this approach is certain inventory information which is regularly
allocation of assets and liabilities to the individual segments analyzed at a segment level. Infineon also allocates depreciation and amortization
The Management Board, as joint Chief Operating Decision Maker, decides how expense to the operating segments based on production volume and products
resources are allocated to the segments. produced using standard costs.

Based on revenue and Segment Result, the Management Board assesses performance
and defines operating targets and budgets for the segments.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 158
Notes to the Consolidated Financial Statements

Segment information
Product category

Total Power semiconductors Embedded control RF & sensors Memory ICs for
& connectivity specific applications

€ in millions 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Revenue from contracts with customers:
Automotive 8,242 6,516 4,040 3,298 2,796 1,742 710 733 696 743
Green Industrial Power 2,205 1,790 2,205 1,790 – – – – – –
Power & Sensor Systems 3,798 4,070 2,997 3,034 332 330 469 706 – –
Connected Secure Systems 2,046 1,822 – – 2,046 1,822 – – – –
Subtotal 16,291 14,198 9,242 8,122 5,174 3,894 1,179 1,439 696 743
Other Operating Segments 18 20
Corporate and Eliminations – –
Total 16,309 14,218

There were limited levels of trading relationships between the operating segments
during the 2023 and 2022 fiscal years. Costs are generally recharged without impact
on profit or loss.
Change

€ in millions 2023 2022 absolute in %

Segment Result:
Automotive 2,380 1,490 890 60
Green Industrial Power 662 384 278 72
Power & Sensor Systems 861 1,137 (276) (24)
Connected Secure Systems 488 378 110 29
Other Operating Segments 5 5 – –
Corporate and Eliminations 3 (16) 19 +++
Total 4,399 3,378 1,021 30

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 159
Notes to the Consolidated Financial Statements

The following table provides the reconciliation of Segment Result to profit (loss) from Change

continuing operations before income taxes: € in millions 2023 2022 absolute in %

Change Depreciation and amortization:
€ in millions 2023 2022 absolute in % Automotive 716 631 85 13

Segment Result: 4,399 3,378 1,021 30 Green Industrial Power 200 187 13 7

Plus/minus: Power & Sensor Systems 295 279 16 6

Certain reversal of impairments (impairments) Connected Secure Systems 93 85 8 9

(in particular on goodwill) – 6 (6) ––– Other Operating Segments 2 2 – –
Gains (losses) on earnings of Depreciation and amortization
restructuring and closures 4 – 4 +++ allocated to the segments 1,306 1,184 122 10
Share-based payment (92) (62) (30) (48) Depreciation and amortization
not allocated to the segments 448 480 (32) (7)
Acquisition-related depreciation/
amortization and other expenses (464) (484) 20 4 Total depreciation and amortization 1,754 1,664 90 5
Gains (losses) on sales of businesses,
or interests in subsidiaries 30 – 30 +++
Other income and expenses 71 7 64 +++ Change
30 Septem- 30 Septem-
Operating profit 3,948 2,845 1,103 39
€ in millions ber 2023 ber 2022 absolute in %
Financial income 105 7 98 +++
Inventories:
Financial expenses (159) (168) 9 5
Automotive 2,039 1,337 702 53
Share of profit (loss) of associates
and joint ventures accounted for using Green Industrial Power 336 290 46 16
the equity method 27 39 (12) (31) Power & Sensor Systems 736 798 (62) (8)
Profit (loss) from continuing operations Connected Secure Systems 461 311 150 48
before income taxes 3,921 2,723 1,198 44
Other Operating Segments 1 3 (2) (67)
Corporate and Eliminations 401 342 59 17
Total 3,974 3,081 893 29
Of the €464 million (2022: €484 million) “Acquisition-related depreciation/amortization
and other expenses” incurred in the 2023 fiscal year, €276 million (2022: €288 million)
was attributable to cost of goods sold, €9 million (2022: €12 million) to research and Impairment losses on assets in the 2023 fiscal year amounted to €0 million (2022:
development expenses, €168 million (2022: €177 million) to selling, general and €4 million) in the Automotive segment, €12 million (2022: €0 million) in the Green
administrative expenses and €11 million (2022: €7 million) to the balance of other Industrial Power segment, €5 million (2022: €20 million) in the Power & Sensor
operating income and expense. Systems segment, and €1 million (2022: €7 million) in Corporate and Eliminations.
Also allocated to Corporate and Eliminations in the 2023 fiscal year was €0 million
(2022: €7 million) of reversal of impairments to assets.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 160
Notes to the Consolidated Financial Statements

Entity-wide disclosures in accordance with IFRS 8 Non-current assets as of 30 September 2023 and 2022, by region, were as follows:
Revenue for the 2023 and 2022 fiscal years by region was as follows:
Change
30 Septem- 30 Septem-
Change € in millions ber 2023 ber 20221 absolute in %
€ in millions 2023 2022 absolute in % Non-current assets:
Revenue: Europe 6,105 4,873 1,232 25
Europe, Middle East, Africa 4,360 3,399 961 28 therein: Germany 3,621 2,904 717 25
therein: Germany 2,017 1,594 423 27 Asia-Pacific (excluding Japan, Greater China) 2,128 1,627 501 31
Asia-Pacific (excluding Japan, Greater China) 2,594 2,343 251 11 Greater China2 176 152 24 16
Greater China1 5,275 5,204 71 1 therein: Mainland China, Hong Kong 162 137 25 18
therein: Mainland China, Hong Kong 4,124 4,063 61 2 Japan 79 67 12 18
Japan 1,706 1,415 291 21 Americas 8,767 9,993 (1,226) (12)
Americas 2,374 1,857 517 28 therein: USA 8,750 9,978 (1,228) (12)
therein: USA 1,982 1,564 418 27 Total 17,255 16,712 543 3
Total 16,309 14,218 2,091 15
1 The presentation of grants receivables, as well as of some of the advance payments made, was corrected in the 2023 fiscal year.
These are now no longer reported under current or non-current financial assets. The previous year’s figures have been adjusted to
1 Greater China comprises Mainland China, Hong Kong and Taiwan. improve comparability.
2 Greater China comprises Mainland China, Hong Kong and Taiwan.

The allocation of revenues from external customers to geographic areas is based on

the customers’ locations. The average number of employees by geographic region is Non-current assets do not include financial instruments, deferred tax assets and
provided in note 4. p. 109 assets from employee benefits.

No single customer accounted for more than 10 percent of Infineon’s revenue during
the 2023 and 2022 fiscal years.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 161
Notes to the Consolidated Financial Statements

30 Additional information in accordance with HGB Fees for other services

Fees of €0.2 million were charged by KPMG to the Company in the 2023 fiscal year for
Information pursuant to section 161 Stock Corporation Act (AktG) other services. These mainly included quality assurance during the implementation
The Declaration of Compliance prescribed by section 161 AktG was drawn up by the of regulatory requirements.
Management Board and the Supervisory Board and made permanently available to
the public on Infineon’s website. Management Board and Supervisory Board
www.infineon.com/cms/en/about-infineon/investor/corporate-governance/#corporate-governance
Management remuneration in the 2023 fiscal year
Fees for audit and advisory services pursuant to section 314, As required by section 314, paragraph 1, no. 6, in conjunction with section 315e
paragraph 1, no. 9, HGB paragraph 1, HGB, the total remuneration of the Management Board and the Super­
visory Board is disclosed in note 25, p. 140.
Year-end audit fees
At the Annual General Meeting held on 16 February 2023, the shareholders elected Disclosure of the renumeration of individual members of the Management Board and
KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG), Munich (Germany), as auditor for the Supervisory Board, as required by section 162 of the AktG, can be found in the
the 2023 Separate Financial Statements and the Consolidated Financial Statements Remuneration Report, which is prepared according to stock corporation law and is
of Infineon Technologies AG. The audit fees charged by KPMG in the 2023 fiscal year available under the following link:
amounted to €4.3 million for the audit of the Consolidated Financial Statements and www.infineon.com/remuneration-report
various annual audits, including an audit review of the Interim Financial Statements.
The references to the Remuneration Report are not audited as part of the audit of
Fees for other advisory services the financial statements. The Remuneration Report was subjected to a separate
In addition to the amounts described above, KPMG charged an aggregate of substantive audit by the auditor in accordance with IDW PS 490. This audit also
€0.7 million in the 2023 fiscal year for other audit services, which mainly included includes the formal audit required by section 162, paragraph 3 of the German Stock
the audit of the disclosures in the Sustainability Report, the audit of compliance Corporation Act (AktG).
management systems, the provision of comfort letters, as well as the substantive
audit of the Remuneration Report.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 162
Notes to the Consolidated Financial Statements

Management Board The Supervisory Board

The Management Board members were as follows: The Supervisory Board members, their Supervisory Board position, their occupation,
and their membership of other supervisory and governing bodies are as follows:
Name Position Membership of Supervisory Boards
and other comparable governing bodies of domestic
Name Position Membership of other Supervisory Boards
and foreign companies
and other comparable governing bodies of domestic
and foreign companies
Jochen Hanebeck Chief Executive Officer, Supervisory Board member
Labor Director › Infineon Technologies Austria AG, Austria Dr. Herbert Diess Manager, most recently
(Chairman) Chairman CEO of Volkswagen AG
(since 16 February 2023)
Constanze Hufenbecher Chief Digital Supervisory Board member
(until 31 October 2023) Transformation Officer › Voith GmbH & Co. KGaA, Germany
Member of the Shareholders’ Committee Johann Dechant1 Chairman of the Member of the Administrative Board
› Voith Management GmbH, Germany Vice Chairman group works council, › SBK Siemens-Betriebskrankenkasse, Germany
Vice Chairman of the
Elke Reichart Chief Digital Supervisory Board member general works council
(since 1 November 2023) Transformation Officer › Trumpf SE + Co. KG, Germany and Chairman of the
› SUSE S.A., Luxembourg works council Regensburg,
› BECHTLE AG, Germany Infineon Technologies AG
Member of the Board of Directors Xiaoqun Clever-Steg Member of various Supervisory Board member
› esure Group plc, Great Britain supervisory bodies › Capgemini SE, France (listed)
(until 16 May 2023)
Dr. Sven Schneider Chief Financial Officer Supervisory Board member › Amadeus IT Group SA, Spain (listed)
› Covestro AG, Germany (listed)
› Infineon Technologies Austria AG, Austria Member of the Administrative Board
› Cornelsen Group, Germany
Member of the Board of Directors
› Infineon Technologies China Co., Ltd., Member of the Board of Directors
People’s Republic of China › BHP Group Plc., Great Britain (listed)
› Infineon Technologies Asia Pacific Pte., Ltd., Singapore und BHP Group Ltd., Australia (listed)
› Infineon Technologies Americas Corp., USA Dr. Wolfgang Eder Member of various Supervisory Board member
› Infineon Technologies Japan K.K., Japan Chairman supervisory bodies › voestalpine AG, Austria (listed)
(until 16 February 2023) (Chairman)
Andreas Urschitz Chief Marketing Officer Member of the Board of Directors
› Infineon Technologies Asia Pacific Pte., Ltd., Singapore Dr. Friedrich Eichiner Member of various Supervisory Board member
(Chairman) supervisory bodies › Festo Management SE, Germany (Chairman)
› Infineon Technologies Japan K.K., Japan › Allianz SE, Germany (listed)
› Infineon Technologies China Co., Ltd., Annette Engelfried1 Labor union secretary Supervisory Board member
People’s Republic of China IG Metall district › Infineon Technologies Dresden Verwaltungs GmbH,
› Infineon Technologies Americas Corp., USA management, Berlin- Germany
(Chairman) Brandenburg-Saxony › Siemens Gamesa Renewable Energy
Deutschland GmbH, Germany
Dr. Rutger Wijburg Chief Operations Officer Supervisory Board member
› SMART Photonics B.V., Netherlands
› Carl Zeiss AG, Germany (since 13 March 2023)

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 163
Notes to the Consolidated Financial Statements

Name Position Membership of other Supervisory Boards Name Position Membership of other Supervisory Boards
and other comparable governing bodies of domestic and other comparable governing bodies of domestic
and foreign companies and foreign companies
Peter Gruber1 Chief Financial Officer Supervisory Board member Dr. Ulrich Spiesshofer Senior advisor – Member of the Board of Directors
Representative of Operations, › Infineon Technologies Dresden Verwaltungs GmbH, The Blackstone Group, › Schlumberger N.V. (Schlumberger Ltd), Curaçao
Senior Management Infineon Technologies AG Germany member of various advisory (listed)
Klaus Helmrich Member of various Supervisory Board member boards and investor
(since 16 February 2023) supervisory bodies › ZF Friedrichshafen AG, Germany Margret Suckale Member of various Supervisory Board member
› Festo SE & Co. KG, Germany supervisory bodies › Heidelberg Materials AG, Germany (listed)
› Deutsche Telekom AG, Germany (listed)
Member of the Foundation Council › DWS Group GmbH & Co. KGaA, Germany (listed)
› Friedhelm Loh Familienstiftung, Germany › Greiner AG, Austria (since 27 June 2023)
› Friedhelm Loh Stiftung, Germany Mirco Synde 1 Supervisor
Hans-Ulrich Holdenried Independent Member of the Advisory Board frontend production,
(until 16 February 2023) Management Consultant ›Bridge imp GmbH, Germany Infineon Technologies
Dr. Susanne Lachenmann1 Principal Engineer, Dresden GmbH & Co. KG
Infineon Technologies AG Diana Vitale 1 Chairwoman of the
Géraldine Picaud Chief Financial Officer, Member of the Board of Directors Works Council Warstein,
(until 2 February 2023) Holcim Ltd., Switzerland › Danone S.A., France (listed) Infineon Technologies AG
(until 30 April 2023) Ute Wolf Member of various Supervisory Board member
Following Holcim Group mandates (until 30 April 2023):
› Holcim Group Services Ltd, Switzerland (since 22 April 2023) supervisory bodies › DWS Group GmbH & Co. KGaA, Germany (listed)
› Holcim Technology Ltd, Switzerland › Klöckner & Co. SE, Germany (listed)
› Lafarge Maroc SA, Morocco › MTU Aero Engines AG, Germany
(since 11 May 2023)
› LafargeHolcim Maroc SAS, Morocco (listed)
› LafargeHolcim Maroc Afrique SAS, Morocco Member of the Advisory Board
› Huaxin Cement Co., Ltd., People’s Republic of China › Borussia Dortmund Geschäftsführungs-GmbH,
(listed) Germany
Dr. Manfred Puffer Independent Supervisory Board member
Management Consultant › Athora Lebensversicherung AG, Germany
1 Employee representative.

› Nova KBM Bank, Slovenia (until 6 February 2023)

› Oldenburgische Landesbank AG, Germany The business address of each member of the Supervisory Board is:
Member of the Board of Directors Infineon Technologies AG, Am Campeon 1– 15, D-85579 Neubiberg (Germany).
› Athene Holding Ltd., Bermuda (listed)
› Catalina Holdings (Bermuda) Ltd., Bermuda
Melanie Riedl 1 Analysis Engineer and
Vice Chairwoman of the
Works Council Campeon
Jürgen Scholz 1 Labor union secretary Supervisory Board member
› Krones AG, Germany (listed)
(until 23 May 2023)
Member of the Administrative Board
› BKK of BMW AG, Germany

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 164
Notes to the Consolidated Financial Statements

Supervisory Board committees

Mediation Committee Strategy and Technology Committee
Dr. Herbert Diess (Member and Chairman since 16 February 2023) Dr. Herbert Diess (Member and Chairman since 16 February 2023)
Dr. Wolfgang Eder (Member and Chairman until 16 February 2023) Xiaoqun Clever-Steg
Johann Dechant Dr. Wolfgang Eder (Member until 16 February 2023)
Hans-Ulrich Holdenried (Member until 16 February 2023) Peter Gruber
Jürgen Scholz Dr. Susanne Lachenmann
Margret Suckale (Member since 16 February 2023) Jürgen Scholz
Dr. Ulrich Spiesshofer (Chairman until 16 February 2023)
Executive Committee
Dr. Herbert Diess (Member and Chairman since 16 February 2023) Nomination Committee
Dr. Wolfgang Eder (Member and Chairman until 16 February 2023) Dr. Herbert Diess (Member and Chairman since 16 February 2023)
Johann Dechant Dr. Friedrich Eichiner (Chairman until 16 February 2023)
Dr. Friedrich Eichiner (Member since 16 February 2023) Géraldine Picaud (Member until 2 February 2023)
Annette Engelfried Dr. Manfred Puffer (Member until 16 February 2023)
Hans-Ulrich Holdenried (Member until 16 February 2023) Margret Suckale
Margret Suckale
Diana Vitale

Investment, Finance and Audit Committee

Dr. Friedrich Eichiner (Chairman)
Johann Dechant
Dr. Wolfgang Eder (Member until 16 February 2023)
Annette Engelfried
Ute Wolf (Member since 22 April 2023)

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 165
Notes to the Consolidated Financial Statements

Subsidiaries, associated companies, joint ventures and other companies (not consolidated)
as of 30 September 2023

Name of company Registered office Shareholdings Thereof Infineon Equity Net result Footnote
in % Technologies AG (€ in millions) (€ in millions)
Fully consolidated subsidiaries:
5200 Ben White Condominiums Association, Inc. Austin, Texas, USA n.a. 0 0.00 0.00 6, 19, 24
AgigA Tech, Inc. Wilmington, Delaware, USA 100 0 0.32 (2.04) 6, 24
CYLand Corp. General Trias, Philippines 40 0 1.39 0.00 11, 20
Cypress International, LLC Wilmington, Delaware, USA 100 0 0.00 0.00 6, 24
Cypress Manufacturing, Ltd. Camana Bay (George Town), Cayman Islands 100 0 47.35 0.42 6, 24
Cypress Semiconductor (Canada), Inc. Kanata, Ontario, Canada 100 0 1.34 1.05 6
Cypress Semiconductor (Mauritius) LLC Ebène, Mauritius 100 0 0.13 (0.03) 5
Cypress Semiconductor (Switzerland) Sàrl Lausanne, Switzerland 100 0 7.09 1.46 11
Cypress Semiconductor Corporation Wilmington, Delaware, USA 100 0 6,495.61 (197.26) 6, 24
Cypress Semiconductor International, Inc. Wilmington, Delaware, USA 100 0 316.41 4.78 6, 24
Cypress Semiconductor Ireland Limited Cork, Ireland 100 0 8.89 2.34 4
Cypress Semiconductor México, S. de R.L. de C.V. Guadalajara, Mexico 100 0 (0.03) 0.02 11
Cypress Semiconductor Philippines Headquarters, Ltd. Camana Bay (George Town), Cayman Islands 100 0 6.29 (0.03) 6, 24
Cypress Semiconductor Singapore Pte. Ltd. Singapore, Singapore 100 0 2.80 2.24 11
Cypress Semiconductor Technology (Shanghai) Co. Ltd. Shanghai, People’s Republic of China 100 0 4.29 (6.92) 11
Cypress Semiconductor Technology Ltd. Camana Bay (George Town), Cayman Islands 100 0 274.43 (0.82) 6, 24
Cypress Semiconductor Ukraine LLC Lviv, Ukraine 100 0 2.36 0.09 11
Cypress Semiconductor World Trade Corp. Camana Bay (George Town), Cayman Islands 100 0 6.64 0.00 6, 24
Hitex GmbH Karlsruhe, Germany 100 100 2.16 0.00 3, 13, 14
Infineon Integrated Circuit (Beijing) Co., Ltd. Beijing, People’s Republic of China 100 0 15.16 1.29 11
Infineon Semiconductors (Shenzhen) Co., Ltd. Shenzhen, People’s Republic of China 100 0 3.39 1.88 11
Infineon Semiconductors (Wuxi) Co., Ltd. Wuxi, People’s Republic of China 100 0 47.64 2.92 11
Infineon Technologies (Kulim) Sdn. Bhd. Kulim, Malaysia 100 0 429.36 76.96 6
Infineon Technologies (Malaysia) Sdn. Bhd. Melaka, Malaysia 100 0 353.34 47.08 6
Infineon Technologies (Penang) Sdn. Bhd. Kuala Lumpur, Malaysia 100 0 9.10 1.36 8
Infineon Technologies (Shanghai) Co. Ltd. Shanghai, People’s Republic of China 100 0 n.a. n.a. 12
Infineon Technologies (Thailand) Limited Nonthaburi, Thailand 100 0 91.88 3.80 8
Infineon Technologies (Wuxi) Co., Ltd. Wuxi, People’s Republic of China 100 0 141.33 14.74 11
Infineon Technologies (Xi’an) Co., Ltd. Xi’an, People’s Republic of China 100 0 8.13 0.37 11

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 166
Notes to the Consolidated Financial Statements

Name of company Registered office Shareholdings Thereof Infineon Equity Net result Footnote
in % Technologies AG (€ in millions) (€ in millions)
Infineon Technologies 2. Vermögensverwaltungsgesellschaft mbH Neubiberg, Germany 100 0 0.03 (0.02) 6
Infineon Technologies 3. Vermögensverwaltungsgesellschaft mbH Dresden, Germany 100 0 n.a. n.a. 12
Infineon Technologies Acquisition B.V. Rotterdam, The Netherlands 100 100 n.a. n.a. 12
Infineon Technologies Americas Corp. Wilmington, Delaware, USA 100 0 1,818.33 200.18 6, 24
Infineon Technologies Asia Pacific Pte Ltd Singapore, Singapore 100 0 802.02 275.97 6
Infineon Technologies Australia Pty Limited Blackburn, Australia 100 0 1.46 0.05 6
Infineon Technologies Austria AG Villach, Austria 100 0.004 1,965.89 518.96 6
Infineon Technologies Canada Acquisition Inc. Toronto, Ontario, Canada 100 0 n.a. n.a. 12
Infineon Technologies Cegléd Kft. Cegléd, Hungary 100 0 42.37 (12.95) 6
Infineon Technologies Center of Competence (Shanghai) Co., Ltd. Shanghai, People’s Republic of China 100 0 4.09 1.19 11
Infineon Technologies China Co., Ltd. Shanghai, People’s Republic of China 100 0 217.53 36.64 11
Infineon Technologies d.o.o. Beograd Belgrade, Serbia 100 0 0.07 0.07 11
Infineon Technologies Denmark ApS Herlev, Denmark 100 0 (1.03) (5.95) 6
Infineon Technologies Dresden GmbH & Co. KG Dresden, Germany 100 100 288.61 25.27 6, 16
Infineon Technologies Dresden Verwaltungs GmbH Neubiberg, Germany 100 0 0.09 0.00 6, 13, 15
Infineon Technologies Epi Services, Inc. Wilmington, Delaware, USA 100 0 21.07 7.17 6, 24
Infineon Technologies Finance B.V. Rotterdam, The Netherlands 100 100 1.91 (0.02) 6
Infineon Technologies France S.A.S. St. Denis, France 100 0 9.14 0.68 6
Infineon Technologies Holding Asia Pacific Pte. Ltd. Singapore, Singapore 100 0 3.81 3.04 6
Infineon Technologies Holding B.V. Rotterdam, The Netherlands 100 100 11,677.51 276.10 6
Infineon Technologies Hong Kong Ltd. Hong Kong, People’s Republic of China 100 0 2.63 0.90 6
Infineon Technologies India Private Limited Bangalore, India 100 0 22.35 5.39 5
Infineon Technologies Innovates G.K. Tokyo, Japan 100 0 24.90 5.78 6
Infineon Technologies Investment B.V. Rotterdam, The Netherlands 100 0 0.09 (0.02) 6
Infineon Technologies Ireland Limited Dublin, Ireland 100 100 0.54 0.26 6
Infineon Technologies Italia s.r.l. Milan, Italy 100 0 6.77 1.69 6
Infineon Technologies IT-Services GmbH Klagenfurt, Austria 100 0 11.15 6.53 6
Infineon Technologies Japan K.K. Tokyo, Japan 100 0 56.88 17.98 6
Infineon Technologies Korea Co., LLC Seoul, Republic of Korea 100 0 15.89 7.01 6
Infineon Technologies LLC Wilmington, Delaware, USA 100 0 832.53 52.39 6, 24
Infineon Technologies Memory Solutions Germany GmbH Neubiberg, Germany 100 0 0.11 0.09 3
Infineon Technologies Memory Solutions Holdings Inc. Wilmington, Delaware, USA 100 0 74.84 0.00 6, 24
Infineon Technologies Memory Solutions India LLP Bangalore, India 100 0 0.15 0.14 5

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 167
Notes to the Consolidated Financial Statements

Name of company Registered office Shareholdings Thereof Infineon Equity Net result Footnote
in % Technologies AG (€ in millions) (€ in millions)
Infineon Technologies Memory Solutions Israel Ltd. Netanya, Israel 100 0 84.64 6.27 3
Infineon Technologies Memory Solutions Japan G.K. Tokyo, Japan 100 0 0.80 0.43 6
Infineon Technologies Memory Solutions Malaysia Sdn. Bhd. Kuala Lumpur, Malaysia 100 0 0.57 0.18 10
Infineon Technologies Memory Solutions Taiwan Ltd. Taipei, Taiwan 100 0 0.31 0.11 6
Infineon Technologies Nijmegen B.V. Nijmegen, The Netherlands 100 0 0.20 0.00 7
Infineon Technologies Nordic AB Kista, Sweden 100 0 4.87 0.54 6
Infineon Technologies Philippines, Inc. Muntinlupa City, Philippines 100 0 0.70 0.52 6
Infineon Technologies Power Semitech Co., Ltd. Cheonan, Republic of Korea 100 100 52.74 4.81 6
Infineon Technologies Reigate Limited Bristol, Great Britain 100 0 4.68 1.09 6
Infineon Technologies Romania & Co. Societate in Comandita Bucharest, Romania 100 0 6.21 2.55 6
Infineon Technologies Semiconductor GmbH Aschheim, Germany 100 0 12.09 2.68 4
Infineon Technologies Semiconductor India Private Limited Bangalore, India 100 0 52.03 8.27 5
Infineon Technologies Shared Service Center, Unipessoal Lda. Maia, Portugal 100 100 5.59 0.86 6
Infineon Technologies Taiwan Co., Ltd. Taipei, Taiwan 100 0 10.00 2.10 6
Infineon Technologies UK Limited Bristol, Great Britain 100 0 4.33 0.97 6
Infineon Technologies US HoldCo Inc. Wilmington, Delaware, USA 100 0 8,648.84 19.23 6, 24
Infineon Technologies US InterCo LLC Wilmington, Delaware, USA 100 0 7,889.00 2.10 6, 24
Infineon Technologies US Investment LLC Wilmington, Delaware, USA 100 0 (0.09) 19.15 6, 24
Infineon Technologies Vermögensverwaltungsgesellschaft mbH Neubiberg, Germany 100 100 286.47 0.00 6, 13, 15
International Rectifier HiRel Products, Inc. Wilmington, Delaware, USA 100 0 307.76 86.78 6, 24
MOLSTANDA Vermietungsgesellschaft mbH Neubiberg, Germany 100 0 304.94 0.00 6, 15
MOTEON GmbH Neubiberg, Germany 100 100 0.31 0.21 6
MoTo Objekt CAMPEON GmbH & Co. KG Neubiberg, Germany 100 0 93.39 28.40 6, 17
NoBug Consulting SRL Bucharest, Romania 100 0 1.15 0.62 11
PT Infineon Technologies Batam Batam, Indonesia 100 0 24.87 1.41 6
Ramtron International Corporation Wilmington, Delaware, USA 100 0 0.00 0.00 6, 24
Rectificadores Internacionales, S.A. de C.V. Tijuana, Mexico 100 0 14.34 1.99 6, 24
SILTECTRA GmbH Dresden, Germany 100 0 15.92 12.47 6
Spansion Inc. Wilmington, Delaware, USA 100 0 1,281.11 56.64 6, 24
Spansion LLC Wilmington, Delaware, USA 100 0 1,859.61 326.82 6, 24
Syntronixs Asia Sdn. Bhd. Melaka, Malaysia 100 0 5.57 1.09 8

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 168
Notes to the Consolidated Financial Statements

Name of company Registered office Shareholdings Thereof Infineon Equity Net result Footnote
in % Technologies AG (€ in millions) (€ in millions)
Associated companies:
Deca Technologies, Inc. Dover, Delaware, USA 42.5 0 9.31 (0.85) 11, 23, 24
pmdtechnologies ag Siegen, Germany 15 15 4.48 (13.54) 11, 21
SkyHigh Memory Limited Hong Kong, People’s Republic of China 40 0 52.76 19.23 11, 23

Joint ventures:
Infineon Technologies Bipolar GmbH & Co. KG Warstein, Germany 60 60 52.67 17.73 6, 22
SAIC Infineon Automotive Power Modules (Shanghai) Co., Ltd Shanghai, People’s Republic of China 49 25 53.57 43.11 11

Other companies (not consolidated):1

CHiL Semiconductors Corporation Wilmington, Delaware, USA 100 0 0.00 0.00 6
Cypress Envirosystems, Inc. Wilmington, Delaware, USA n.a. 0 n.a. n.a. 18
EPOS embedded core & power systems GmbH & Co. KG Duisburg, Germany 100 100 1.26 0.54 6
EPOS embedded core & power systems Verwaltungs GmbH Duisburg, Germany 100 100 0.08 0.00 6
Futurium gGmbH Berlin, Germany n.a. n.a. n.a. n.a. 18
Hitex (UK) Limited Coventry, Great Britain 100 0 2.64 0.85 6
Imagimob AB Stockholm, Sweden 100 0 0.08 (1.02) 11
Industrial Analytics IA GmbH Neubiberg, Germany 100 100 0.53 (0.06) 8
Infineon Technologies Bipolar Verwaltungs GmbH Warstein, Germany 60 60 0.03 0.00 6
Infineon Technologies Campeon Verwaltungsgesellschaft mbH Neubiberg, Germany 100 0 0.15 0.02 6
Infineon Technologies Delta GmbH Neubiberg, Germany 100 100 0.04 0.00 6
Infineon Technologies Gamma GmbH Neubiberg, Germany 100 100 0.03 0.00 6
Infineon Technologies Holding GmbH Neubiberg, Germany 100 100 0.13 0.00 6, 13
Infineon Technologies Iberia, S.L.U. Madrid, Spain 100 0 0.16 0.06 6
Infineon Technologies Israel Ltd. Netanya, Israel 100 0 0.00 0.00 9
Infineon Technologies Mantel 26 AG Neubiberg, Germany 100 100 0.02 (0.01) 6
Infineon Technologies Mantel 27 GmbH Neubiberg, Germany 100 100 0.03 0.00 6, 13
Infineon Technologies Mantel 29 GmbH Neubiberg, Germany 100 100 0.03 0.00 6, 13
Infineon Technologies Polska Sp. z o.o. Warsaw, Poland 100 0 0.15 0.02 6
Infineon Technologies Romania s.r.l. Bucharest, Romania 100 0 0.05 0.01 11
Infineon Technologies South America Ltda São Paulo, Brasil 100 0 (0.03) (0.11) 11
Infineon Technologies Vietnam Company Ltd. Hanoi, Vietnam 100 0 0.17 0.05 6
IR International Holdings China, Inc. Wilmington, Delaware, USA 100 0 0.00 0.00 6
KAI Kompetenzzentrum Automobil- und Industrieelektronik GmbH Villach-St. Magdalen, Austria 100 0 0.87 0.30 11

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 169
Notes to the Consolidated Financial Statements

Name of company Registered office Shareholdings Thereof Infineon Equity Net result Footnote
in % Technologies AG (€ in millions) (€ in millions)
KFE Kompetenzzentrum Fahrzeug Elektronik GmbH Lippstadt, Germany 24 24 1.27 0.09 11
MicroLinks Technology Corp. Kaohsiung, Taiwan n.a. 0 n.a. n.a. 18
OSPT IP Pool GmbH Neubiberg, Germany 100 100 0.03 (0.01) 6
PT Infineon Technologies Indonesia Jakarta, Indonesia 100 0 0.23 0.04 6
R Labco, Inc. Wilmington, Delaware, USA 100 0 0.00 0.00 6
Schweizer Electronic AG Schramberg, Germany 9 9 24.23 (24.89) 11
Silicon Alps Cluster GmbH Villach, Austria n.a. 0 n.a. n.a. 18
TTTech Auto AG Vienna, Austria n.a. n.a. n.a. n.a. 18
Virtual Vehicle Research GmbH Graz, Austria n.a. n.a. n.a. n.a. 18
XMOS Limited Bristol, Great Britain n.a. 0 n.a. n.a. 18

Qimonda AG and its subsidiaries:2

Celis Semiconductor Corp. Colorado Springs, Colorado, USA 17 0 – – 2
Itarion Solar Lda. Vila do Conde, Portugal 40 0 – – 2
Qimonda (Malaysia) Sdn. Bhd. (in liquidation) Melaka, Malaysia 77 0 – – 2
Qimonda AG (in insolvency) Munich, Germany 77 28 – – 2
Qimonda Asia Pacific Pte. Ltd. Singapore, Singapore 77 0 – – 2
Qimonda Belgium BVBA (in insolvency) Leuven, Belgium 77 0 – – 2
Qimonda Bratislava s.r.o. (in liquidation) Bratislava, Slovakia 77 0 – – 2
Qimonda Dresden GmbH & Co. OHG (in insolvency) Dresden, Germany 77 0 – – 2
Qimonda Dresden Verwaltungsgesellschaft mbH (in insolvency) Dresden, Germany 77 0 – – 2
Qimonda Finance LLC (in insolvency) Wilmington, Delaware, USA 77 0 – – 2
Qimonda Flash GmbH (in insolvency) Dresden, Germany 77 0 – – 2
Qimonda France SAS (in liquidation) St. Denis, France 77 0 – – 2
Qimonda Holding B.V. (in insolvency) Rotterdam, The Netherlands 77 0 – – 2
Qimonda International Trade (Shanghai) Co. Ltd. Shanghai, People’s Republic of China 77 0 – – 2
Qimonda Investment B.V. Rotterdam, The Netherlands 77 0 – – 2
Qimonda IT (Suzhou) Co., Ltd. (in liquidation) Suzhou, People’s Republic of China 77 0 – – 2
Qimonda Italy s.r.l. (in liquidation) Padua, Italy 77 0 – – 2
Qimonda Korea Co. Ltd. (in liquidation) Seoul, Republic of Korea 77 0 – – 2
Qimonda Licensing LLC Fort Lauderdale, Florida, USA 77 0 – – 2
Qimonda Memory Product Development Center (Suzhou) Co. (in liquidation) Suzhou, People’s Republic of China 77 0 – – 2
Qimonda North America Corp. (in insolvency) Wilmington, Delaware, USA 77 0 – – 2

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 170
Notes to the Consolidated Financial Statements

Name of company Registered office Shareholdings Thereof Infineon Equity Net result Footnote
in % Technologies AG (€ in millions) (€ in millions)
Qimonda Richmond LLC (in insolvency) Wilmington, Delaware, USA 77 0 – – 2
Qimonda Taiwan Co. Ltd. (in liquidation) Taipei, Taiwan 77 0 – – 2
Qimonda UK Ltd. (in liquidation) High Blantyre, Scotland 77 0 – – 2

1 Certain subsidiaries were not consolidated due to immateriality.

2 On 23 January 2009, Qimonda AG applied to the Munich District Court for insolvency proceedings to be opened. Insolvency proceedings were formally opened on 1 April 2009. The equity and earnings of Qimonda AG and its subsidiaries
are not disclosed due to the substantial and ongoing restriction of Infineon’s rights as a result of Qimonda AG’s insolvency. The list of subsidiaries held by Qimonda AG is based on information from 30 September 2010, since Infineon
had not received any further information from the insolvency administrator of Qimonda AG with respect to the insolvency or liquidation of Qimonda companies, and further reflects information from the German commercial register.
Since all Qimonda-related investments were written down in full in previous years, this has no effect on Infineon’s net assets, financial position and results of operations.
3 Equity and net result as of 30 September 2021.
4 Equity and net result as of 31 December 2021.
5 Equity and net result as of 31 March 2022.
6 Equity and net result as of 30 September 2022.
7 Equity and net result as of 30 September 2022 (period from 12 November 2021 until 30 September 2022).
8 Equity and net result as of 30 September 2022 (period from 1 January 2022 until 30 September 2022).
9 Equity and net result as of 30 September 2022 (period from 8 September 2022 until 30 September 2022).
10 Equity and net result as of 2 October 2022 (period from 4 October 2021 until 2 October 2022).
11 Equity and net result as of 31 December 2022.
12 The entity was founded in the 2023 fiscal year.
13 Control and profit transfer agreement.
14 Exemption pursuant to section 264, paragraph 3, German Commercial Code from the preparation of a management report and from the audit obligation pursuant to section 264 et seq. German Commercial Code and from the obligations
to disclose the annual financial statements pursuant to section 325 German Commercial Code.
15 Exemption pursuant to section 264, paragraph 3, German Commercial Code from the obligations to disclose the annual financial statements pursuant to section 325 German Commercial Code.
16 Exemption pursuant to section 264b German Commercial Code from the obligations to prepare a management report as well as notes and from the obligations to disclose the annual financial statements.
17 Exemption pursuant to section 264b German Commercial Code from the obligations to prepare a management report, from the audit obligation, and from the obligation to disclose the annual financial statements.
18 Because criteria pursuant to section 285, No. 11, German Commercial Code are not met, investments in the affiliate are not disclosed.
19 Non-stock entity. Disclosure of ownership in percent does not apply.
20 The entity owns land of which Infineon is the sole tenant.
21 Infineon accounts for its interest using the equity method because Infineon has significant influence due to the right to hold a supervisory board position in combination with comprehensive minority rights and certain contractual rights
in the context of development cooperation.
22 Infineon accounts for its interest using the equity method as Infineon lacks controlling influence due to certain contractual participation rights of the co-shareholder.
23 Consolidated financial statements.
24 IFRS figures.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 171
Notes to the Consolidated Financial Statements

Neubiberg, 21 November 2023

Infineon Technologies AG
Management Board

Jochen Hanebeck Elke Reichart Dr. Sven Schneider

Andreas Urschitz Dr. Rutger Wijburg

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 172
Responsibility Statement
by the Management Board

Further information
Responsibility Statement
by the Management Board
To the best of our knowledge, and in accordance with the applicable reporting
principles, the Consolidated Financial Statements give a true and fair view of the
assets, liabilities, financial position and profit or loss of the Group, and the Combined
Management Report, which is combined with the Management Report of Infineon
Technologies AG, includes a fair review of the development and performance of the
business and the position of the Group, together with a description of the principal
opportunities and risks associated with the expected development of the Group.

Neubiberg, 23 November 2023

Infineon Technologies AG
Management Board

Jochen Hanebeck Elke Reichart Dr. Sven Schneider

Andreas Urschitz Dr. Rutger Wijburg

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 173
Independent Auditor’s Report

For the Consolidated Financial Statements and Group Management Report we have issued an unqualified auditor’s report.
The English language text below is a translation of the auditor’s report. The original German text shall prevail in the event of any discrepancies
between the English translation and the German original. We do not accept any liability for the use of, or reliance on, the English translation
or for any errors or misunderstandings that may derive from the translation.

Independent Auditor’s Report

To Infineon Technologies AG, Neubiberg In our opinion, on the basis of the knowledge obtained in the audit,

Report on the Audit of the Consolidated Financial › t he accompanying consolidated financial statements comply, in all material respects,
Statements and of the Group Management Report with the IFRSs as adopted by the EU, and the additional requirements of German
commercial law pursuant to Section 315e (1) HGB [Handelsgesetzbuch: German
Opinions Commercial Code] and, in compliance with these requirements, give a true and fair
We have audited the consolidated financial statements of Infineon Technologies AG, view of the assets, liabilities, and financial position of the Group as at 30 Septem-
Neubiberg, and its subsidiaries (the Group), which comprise the consolidated state- ber 2023, and of its financial performance for the financial year from 1 October 2022
ment of financial position as at 30 September 2023, and the consolidated statement to 30 September 2023, and
of profit or loss, consolidated statement of comprehensive income, consolidated state-
ment of changes in equity and consolidated statement of cash flows for the financial › t he accompanying group management report as a whole provides an appropriate
year from 1 October 2022 to 30 September 2023, and notes to the consolidated financial view of the Group’s position. In all material respects, this group management report
statements, including a summary of significant accounting policies. In addition, we is consistent with the consolidated financial statements, complies with German
have audited the combined management report of Infineon Technologies AG and of legal requirements and appropriately presents the opportunities and risks of future
the Group (hereinafter: the “group management report”) for the financial year from development. Our opinion on the group management report does not cover the
1 October 2022 to 30 September 2023. content of those components of the group management report specified in the
“Other Information” section of the auditor’s report. The group management report
In accordance with German legal requirements, we have not audited the content contains cross-references that are not required by law and which are marked as
of those components of the group management report specified in the “Other Infor- unaudited. Our audit opinion does not extend to the cross-references and the
mation” section of our auditor’s report. information to which the cross-references refer.

The group management report contains cross-references that are not required by Pursuant to Section 322 (3) sentence 1 HGB, we declare that our audit has not led
law and which are marked as unaudited. In accordance with German legal require- to any reservations relating to the legal compliance of the consolidated financial
ments, we have not audited the cross-references and the information to which the statements and of the group management report.
cross-references refer.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 174
Independent Auditor’s Report

Basis for the Opinions Infineon tests goodwill for impairment in accordance with IAS 36 at the operating
We conducted our audit of the consolidated financial statements and of the group segment level annually in the fourth quarter of the financial year ending 30 Septem-
management report in accordance with Section 317 HGB and the EU Audit Regulation ber, as well as in cases where events or changes to the prevailing conditions provide
No 537/2014 (referred to subsequently as “EU Audit Regulation”) and in compliance indications that the recoverable amount may have fallen below the carrying amount.
with German Generally Accepted Standards for Financial Statement Audits promulgated The recoverable amount is the higher of fair value less costs of disposal and value
by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). in use. Goodwill is impaired if the carrying amount of the operating segment to which
Our responsibilities under those requirements and principles are further described in the goodwill is allocated exceeds the recoverable amount of this unit. Infineon
the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements determines the recoverable amount of the respective cash-generating unit to which
and of the Group Management Report” section of our auditor’s report. We are inde- goodwill was allocated according to value in use.
pendent of the group entities in accordance with the requirements of European law
and German commercial and professional law, and we have fulfilled our other German Impairment testing of goodwill is complex and based on a range of assumptions that
professional responsibilities in accordance with these requirements. In addition, in require judgement. Such judgement includes, among other elements, the assumptions
accordance with Article 10 (2)(f) of the EU Audit Regulation, we declare that we have found in the adopted corporate planning for a period of five years, such as revenue
not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regula- growth and margins, assumed long-term growth rates in perpetuity, which consider
tion. We believe that the evidence we have obtained is sufficient and appropriate to a steady state taking into account the synergy effects of the acquisition of Cypress
provide a basis for our opinions on the consolidated financial statements and on the Semiconductor Corporation, and the underlying discount rates.
group management report.
As a result of the impairment test performed, the Company did not identify any
Key Audit Matters in the Audit of the Consolidated need to recognise impairment losses. In light of the discretionary judgement of the
Financial Statements assumptions underlying impairment testing, there is the risk for the consolidated
Key audit matters are those matters that, in our professional judgement, were of most financial statements that a required impairment was not recognised. There is also the
significance in our audit of the consolidated financial statements for the financial risk that the related disclosures in the notes are not appropriate.
year from 1 October 2022 to 30 September 2023. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in Our audit approach
forming our opinion thereon, we do not provide a separate opinion on these matters. When assessing the impairment test, we also assessed the appropriateness of key
assumptions. We assessed the Company’s calculation method and selected assump-
Impairment testing of goodwill tions in terms of their appropriateness with the help of our valuation specialists.
Please refer to note 2 in the notes to the consolidated financial statements for infor- For this purpose, we checked that corporate planning was updated for the next five
mation on the accounting policies applied and the assumptions used. Information on years and adopted by the Management Board. Using elements selected on the basis
the value of goodwill can be found under note 14. of risk, we had the staff responsible for preparing corporate planning explain to us in
particular revenue and margin performance, as well as the long-term growth rates
The financial statement risk assumed in perpetuity, which consider a steady state taking into account the synergy
The consolidated financial statements of Infineon Technologies AG reported goodwill effects of the acquisition of Cypress Semiconductor Corporation. In this context,
in the amount of EUR 6,547 million as at 30 September 2023. At 23% of the balance revenue performance in particular was critically reviewed and assessed based on
sheet total, goodwill accounts for a considerable share of total assets. publicly available market estimates and information to determine whether the revenue

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 175
Independent Auditor’s Report

performance used for measurement is within a reasonable range. We also confirmed Other information
the accuracy of the Company’s previous forecasts by comparing the budgets of The Management Board and the Supervisory Board, respectively, are responsible for
previous financial years with actual results and by analysing deviations. the other information. The other information comprises the following components of
the group management report, whose content was not audited:
We checked how the discount rates used were derived and their amounts. For this
purpose, we compared the assumptions and data underlying the discount rates, › t he separate combined non-financial report of the Company and Group, which is
in particular the risk-free rate, the market risk premium and the beta factor, with our referred to in the group management report
own assumptions and publicly available data.
› t he combined corporate governance statement for the Company and the Group
To ensure the computational accuracy of the valuation method used, we verified the referred to in the group management report, and
Company’s calculations on the basis of selected risk-based elements.
› information extraneous to management reports and marked as unaudited.
In order to take account of the existing forecast uncertainty and the earlier cut-off
date selected for impairment testing, the Company examined the effects of possible The other information also includes the remaining parts of the annual report. The
changes in the discount rates, revenue and margin performance and the long-term other information does not include the consolidated financial statements, the group
growth rate in perpetuity on the value in use by calculating alternative scenarios management report information audited for content and our auditor’s report thereon.
and comparing these with its own reported figures (sensitivity analysis). We have
assessed this analysis. In order to take into account the earlier cut-off date for impair- Our opinions on the consolidated financial statements and on the group management
ment testing, we also assessed the impact of events until 30 September 2023 on report do not cover the other information, and consequently we do not express an
impairment testing. opinion or any other form of assurance conclusion thereon.

Finally, we assessed whether the disclosures in the notes regarding impairment In connection with our audit, our responsibility is to read the other information and,
testing of goodwill are appropriate. in so doing, to consider whether the other information

Our observations › i s materially inconsistent with the consolidated financial statements, with the
The calculation method used for impairment testing of goodwill is appropriate and group management report information audited for content or our knowledge
in line with the accounting policies to be applied. obtained in the audit, or

The Company’s assumptions used for measurement are appropriate. › otherwise appears to be materially misstated.

The related disclosures in the notes are appropriate. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 176
Independent Auditor’s Report

Responsibilities of the Management Board and the Auditor’s Responsibilities for the Audit of the Consolidated
Supervisory Board for the Consolidated Financial Statements Financial Statements and of the Group Management Report
and the Group Management Report Our objectives are to obtain reasonable assurance about whether the consolidated
The Management Board is responsible for the preparation of consolidated financial financial statements as a whole are free from material misstatement, whether due
statements that comply, in all material respects, with IFRSs as adopted by the EU and to fraud or error, and whether the group management report as a whole provides an
the additional requirements of German commercial law pursuant to Section 315e (1) appropriate view of the Group’s position and, in all material respects, is consistent
HGB and that the consolidated financial statements, in compliance with these require- with the consolidated financial statements and the knowledge obtained in the audit,
ments, give a true and fair view of the assets, liabilities, financial position, and financial complies with the German legal requirements and appropriately presents the oppor-
performance of the Group. In addition, the Management Board is responsible for such tunities and risks of future development, as well as to issue an auditor’s report that
internal control as they have determined necessary to enable the preparation of con- includes our opinions on the consolidated financial statements and on the group
solidated financial statements that are free from material misstatement, whether due management report.
to fraud (i.e., fraudulent financial reporting and misappropriation of assets) or error.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
In preparing the consolidated financial statements, the Management Board is respon- conducted in accordance with Section 317 HGB and the EU Audit Regulation and in
sible for assessing the Group’s ability to continue as a going concern. They also have compliance with German Generally Accepted Standards for Financial Statement Audits
the responsibility for disclosing, as applicable, matters related to going concern. In promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material
addition, it is responsible for financial reporting based on the going concern basis of misstatement. Misstatements can arise from fraud or error and are considered material
accounting unless there is an intention to liquidate the Group or to cease operations, if, individually or in the aggregate, they could reasonably be expected to influence
or there is no realistic alternative but to do so. the economic decisions of users taken on the basis of these consolidated financial
statements and this group management report.
Furthermore, the Management Board is responsible for the preparation of the group
management report that, as a whole, provides an appropriate view of the Group’s We exercise professional judgement and maintain professional scepticism throughout
position and is, in all material respects, consistent with the consolidated financial the audit. We also:
statements, complies with German legal requirements, and appropriately presents
the opportunities and risks of future development. In addition, the Management Board › I dentify and assess the risks of material misstatement of the consolidated financial
is responsible for such arrangements and measures (systems) as they have consid- statements and of the group management report, whether due to fraud or error,
ered necessary to enable the preparation of a group management report that is in design and perform audit procedures responsive to those risks, and obtain audit
accordance with the applicable German legal requirements, and to be able to provide evidence that is sufficient and appropriate to provide a basis for our opinions. The
sufficient appropriate evidence for the assertions in the group management report. risk of not detecting a material misstatement resulting from fraud is higher than
the risk of not detecting a material misstatement resulting from error, as fraud
The Supervisory Board is responsible for overseeing the Group’s financial reporting may involve collusion, forgery, intentional omissions, misrepresentations, or the
process for the preparation of the consolidated financial statements and of the group override of internal controls.
management report.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 177
Independent Auditor’s Report

›  btain an understanding of internal control relevant to the audit of the consolidated

O ›  btain sufficient appropriate audit evidence regarding the financial information
O
financial statements and of arrangements and measures (systems) relevant to the of the entities or business activities within the Group to express opinions on the
audit of the group management report in order to design audit procedures that are consolidated financial statements and on the group management report. We are
appropriate in the circumstances, but not for the purpose of expressing an opinion responsible for the direction, supervision and performance of the group audit.
on the effectiveness of these systems. We remain solely responsible for our opinions.

›  valuate the appropriateness of accounting policies used by the Management

E ›  valuate the consistency of the group management report with the consolidated
E
Board and the reasonableness of estimates made by the Management Board and financial statements, its conformity with [German] law, and the view of the Group’s
related disclosures. position it provides.

›  onclude on the appropriateness of the Management Board’s use of the going

C ›  erform audit procedures on the prospective information presented by the
P
concern basis of accounting and, based on the audit evidence obtained, whether Management Board in the group management report. On the basis of sufficient
a material uncertainty exists related to events or conditions that may cast significant appropriate audit evidence we evaluate, in particular, the significant assumptions
doubt on the Group’s ability to continue as a going concern. If we conclude that a used by the Management Board as a basis for the prospective information, and
material uncertainty exists, we are required to draw attention in the auditor’s report evaluate the proper derivation of the prospective information from these assump-
to the related disclosures in the consolidated financial statements and in the group tions. We do not express a separate opinion on the prospective information and
management report or, if such disclosures are inadequate, to modify our respec- on the assumptions used as a basis. There is a substantial unavoidable risk that
tive opinions. Our conclusions are based on the audit evidence obtained up to the future events will differ materially from the prospective information.
date of our auditor’s report. However, future events or conditions may cause the
Group to cease to be able to continue as a going concern. We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including
›  valuate the overall presentation, structure and content of the consolidated
E any significant deficiencies in internal control that we identify during our audit.
financial statements, including the disclosures, and whether the consolidated
financial statements present the underlying transactions and events in a manner We also provide those charged with governance with a statement that we have
that the consolidated financial statements give a true and fair view of the assets, complied with the relevant independence requirements, and communicate with
liabilities, financial position and financial performance of the Group in compliance them all relationships and other matters that may reasonably be thought to bear on
with IFRSs as adopted by the EU and the additional requirements of German our independence, and where applicable, the actions taken or safeguards applied
commercial law pursuant to Section 315e (1) HGB. to eliminate independence threats.

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Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 178
Independent Auditor’s Report

From the matters communicated with those charged with governance, we determine we do not express any assurance opinion on the information contained within these
those matters that were of most significance in the audit of the consolidated financial renderings or on the other information contained in the file identified above.
statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclo- We conducted our assurance work on the rendering of the consolidated financial
sure about the matter. statements and the group management report contained in the file made available
and identified above in accordance with Section 317 (3a) HGB and the IDW Assurance
Standard: Assurance Work on the Electronic Rendering of Financial Statements and
Other Legal and Regulatory Requirements Management Reports Prepared for Publication Purposes in Accordance with Section
317 (3a) HGB (IDW AsS 410 (06.2022)). Our responsibility in accordance therewith is
Report on the Assurance on the Electronic Rendering of the further described below. Our audit firm applies the IDW Standard on Quality Manage-
Consolidated Financial Statements and the Group Management ment 1: Requirements for Quality Management in Audit Firms (IDW QS 1).
Report Prepared for Publication Purposes in Accordance with
Section 317 (3a) HGB The Company’s Management Board is responsible for the preparation of the ESEF
We have performed assurance work in accordance with Section 317 (3a) HGB to obtain documents including the electronic rendering of the consolidated financial statements
reasonable assurance about whether the rendering of the consolidated financial and the group management report in accordance with Section 328 (1) sentence 4
statements and the group management report (hereinafter the “ESEF documents”) item 1 HGB and for the tagging of the consolidated financial statements in accordance
contained in the electronic file „Infineon_Technologies_AG_KA+KLB_ESEF_2023- with Section 328 (1) sentence 4 item 2 HGB.
09-30.zip“ (SHA256-Hashwert: 2e23e589e5a7223309fd39b953f18c24f0f95c79648
­b6d38651487c0207649db) made available and prepared for publication purposes In addition, the Company’s Management Board is responsible for such internal control
complies in all material respects with the requirements of Section 328 (1) HGB for that it has considered necessary to enable the preparation of ESEF documents that
the electronic reporting format (“ESEF format”). In accordance with German legal are free from material intentional or unintentional non-compliance with the require-
requirements, this assurance work extends only to the conversion of the information ments of Section 328 (1) HGB for the electronic reporting format.
contained in the consolidated financial statements and the group management report
into the ESEF format and therefore relates neither to the information contained in The Supervisory Board is responsible for overseeing the process of preparing the
these renderings nor to any other information contained in the file identified above. ESEF documents as part of the financial reporting process.

In our opinion, the rendering of the consolidated financial statements and the group Our objective is to obtain reasonable assurance about whether the ESEF documents
management report contained in the electronic file made available, identified above are free from material intentional or unintentional non-compliance with the require-
and prepared for publication purposes complies in all material respects with the ments of Section 328 (1) HGB. We exercise professional judgement and maintain
requirements of Section 328 (1) HGB for the electronic reporting format. Beyond this professional scepticism throughout the assurance work. We also:
assurance opinion and our audit opinion on the accompanying consolidated financial
statements and the accompanying group management report for the financial year › I dentify and assess the risks of material intentional or unintentional non-compliance
from 1 October 2022 to 30 September 2023 contained in the “Report on the Audit of with the requirements of Section 328 (1) HGB, design and perform assurance pro-
the Consolidated Financial Statements and the Group Management Report” above, cedures responsive to those risks, and obtain assurance evidence that is sufficient
and appropriate to provide a basis for our assurance opinion.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 179
Independent Auditor’s Report

›  btain an understanding of internal control relevant to the assurance on the ESEF

O Other matter – Use of the Auditor’s Report
documents in order to design assurance procedures that are appropriate in the
circumstances, but not for the purpose of expressing an assurance opinion on the Our auditor’s report must always be read together with the audited consolidated
effectiveness of these controls. financial statements and the audited group management report as well as the exam-
ined ESEF documents. The consolidated financial statements and group management
›  valuate the technical validity of the ESEF documents, i.e. whether the file made
E report converted to the ESEF format – including the versions to be entered in the
available containing the ESEF documents meets the requirements of Commission company register – are merely electronic renderings of the audited consolidated
Delegated Regulation (EU) 2019/815, as amended as at the reporting date, on the financial statements and the audited group management report and do not take their
technical specification for this electronic file. place. In particular, the ESEF report and our assurance opinion contained therein
are to be used solely together with the examined ESEF documents made available in
›  valuate whether the ESEF documents provide an XHTML rendering with content
E electronic form.
equivalent to the audited consolidated financial statements and the audited group
management report.
German Public Auditor
›  valuate whether the tagging of the ESEF documents with Inline XBRL technology
E Responsible for the Engagement
(iXBRL) in accordance with the requirements of Articles 4 and 6 of Commission
Delegated Regulation (EU) 2019/815, as amended as at the reporting date, enables The German Public Auditor responsible for the engagement is Martin Schmitt.
an appropriate and complete machine-readable XBRL copy of the XHTML rendering.

Further information pursuant to Article 10 of the EU Audit Regulation Munich, 23 November 2023
We were elected as group auditor at the Annual General Meeting on 16 February 2023.
We were engaged by the Supervisory Board on 3 May 2023. In compliance with the KPMG AG
transitional provision of Article 41 (2) of the EU Audit Regulation, we have been, with- Wirtschaftsprüfungsgesellschaft
out interruption since short financial year 1999 (1 April to 30 September 1999), the [Original German version signed by:]
group auditor of Infineon Technologies AG, which without interruption since its IPO
in 2000 has fulfilled the definition of a public interest entity within the meaning of Huber-Straßer Schmitt
Section 316a sentence 2 HGB. Wirtschaftsprüferin Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
We declare that the opinions expressed in this auditor’s report are consistent with
the additional report to the Audit Committee pursuant to Article 11 of the EU Audit
Regulation (long-form audit report).

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 180
Applications and product range
Automotive

Applications and product range

ATV Automotive
Applications Product range

Assistance systems and safety systems Infotainment › 3 2-bit automotive microcontrollers for powertrain,
› ABS (Anti-blocking system) › Connectivity for in-cabin infotainment safety, driver assistance systems, infotainment and
› Airbag › Digital instrument cluster digital display systems
› Automatic parking › Discrete power semiconductors
› E/E architecture Powertrain › IGBT modules
– Power distribution › Battery charging control › Industrial microcontrollers
– On-board network › Battery management › Memory ICs (NOR flash, SRAM, nvSRAM, F-RAM)
› Blind spot detection › Combustion engine control › Power ICs
› Cruise control › DC-DC converter › Sensors (3D-ToF, pressure, magnetic,
› Distance control › Electric motor control 77 GHz radar, current)
› Electronic chassis control › Generator control › SiC (diodes, MOSFETs, modules)
› Electronic power steering › Start-stop system › Transceivers (CAN, CAN FD, LIN, Ethernet, FlexRay™)
› Emergency braking assistant › Thermal management › Voltage regulators
› ESP (Electronic Stability Program) › Transmission control
› Lane departure warning system
› Tire pressure monitoring system Security
› Communication
Comfort electronics – Car-to-car
› Air conditioning – Car-to-infrastructure
› Body control units › Original spare parts authentication
› Door electronics › Protection against manipulation (e.g., odometer)
› Electronic seat adjustment › Protection against software manipulation
› Hatch door › Remote keyless entry
› Lighting › Tachograph
› Power window
› Steering
› Sunroof
› Suspension
› Windshield wipers

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 181
Applications and product range
Green Industrial Power

GIP Green Industrial Power

Applications Product range

Energy generation › Materials handling › Bare die business

› Photovoltaic systems › Oil derricks › Discrete IGBTs
› Wind power turbines › Pipelines › Driver ICs
› Rolling mills › IGBT modules (low-power, medium-power,
Energy storage high-power)
› Grid stability Industrial power supplies › IGBT module solutions, including IGBT stacks
› Home usage › Auxiliary power supplies › Intelligent IGBT modules with integrated
› Urban district › Battery chargers control unit, driver and switch
› Wall box › Charging stations for electric vehicles › SiC diodes, SiC MOSFETs, SiC modules
› Home energy storage
Energy transmission › Uninterruptable power supplies
› FACTS (Flexible AC Transmission Systems)
› Offshore wind farm HVDC transmission lines Industrial robotics
› Overland HVDC transmission lines
Industrial vehicles
Home appliances › Agricultural vehicles
› Air conditioners › Construction vehicles
› Dishwashers › Electric delivery vehicles
› Induction cooktops › Forklifts
› Microwave ovens › Hybrid buses
› Refrigerators
› Vacuum cleaners Traction
› Washing machines › High-speed trains
› Locomotives
Industrial drives1 › Metro trains
› Air conditioning technology › Trams
› Automation technology
› Drives technologies
› Elevator systems
› Escalators 1 Including motors, compressors, pumps and fans.

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 182
Applications and product range
Power & Sensor Systems

PSS Power & Sensor Systems

Applications Product range

Audio amplifiers IoT › 3D ToF sensors

› Battery-powered loudspeakers › Communications › Chips for gas sensors
› Smart speakers › Sensors › Chips for MEMS microphones
› Smart speakers › Chips for pressure sensors
Automotive electronics › Voice control › Control ICs for power switches
› Blind spot detection
› Customized chips (ASICs)
› In-cabin USB PD charging LED and conventional lighting systems
›
› Onboard charger Discrete low-voltage, mid-voltage and
› Power train for low-speed electric vehicles Microinverter for roof-top systems high-voltage power MOSFETs (Si-based)
Mobile devices
› GaN power switches
BLDC motor
› Activity trackers › GPS low-noise amplifiers
› Battery-powered gardening equipment, e.g.,
› Health care trackers › Low-voltage and high-voltage driver ICs
– Hedge trimmers
› Navigation devices › Radar sensor ICs (24 GHz, 60 GHz)
– Lawn mowers
› Smartphones › RF antenna switches
› Battery-powered home appliances, e.g.,
› Tablets › RF power transistors
›
– Vacuum cleaners
Battery-powered power tools, e.g.,
› SiC diodes, SiC MOSFETs
– Cordless screwdrivers
Power management (chargers, adapters, power › TVS (transient voltage suppressor) diodes
supplies, DC-DC conversion, wireless charging) › USB controllers
– Drills › Consumer electronics
– Power saws › Data centers
› eBikes › Home appliances
› eScooters › Mobile devices
› Multi-copters › PCs and notebooks
Cellular communications infrastructure › Servers
› Base stations › Telecommunication technology

Charging stations for electric vehicles Special applications in harsh environments

› Aerospace systems
Human-machine interaction › Aviation technologies
› Defense technologies
› Oil and gas exploration
› Submarine telecommunications

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 183
Applications and product range
Connected Secure Systems

CSS Connected Secure Systems

Applications Product range

Authentication IoT › Connectivity solutions (Wi-Fi, Bluetooth, BLE, UWB)

› Accessories › Industry 4.0 › Embedded security controllers (Embedded SIM,
› Brand protection › IT equipment Authentication, Trusted Computing)
› Game consoles › Smart city › Microcontroller for consumer electronics
› Industrial control systems › Smart home and industrial applications
› Printer cartridges › Security controllers (contact-based, contactless,
Mobile communications dual-interface)
Automotive › Embedded SIM
› Connected vehicles (machine-to-machine communication)
– eCall – Consumer applications
– Car-to-car communications – IoT applications
– Car-to-infrastructure communications › SIM cards
› Electronic toll collection (toll collect)
› In-cabin infotainment Payment systems
› Protection against manipulation (e.g., tachographs) › Credit/debit cards
› Mobile payment
Consumer electronics › NFC-based contactless payment
› Game consoles
› Remote control Ticketing, access control
› Smart watches and activity trackers
Trusted computing
Government identification documents
› Driver’s licenses
› Healthcare cards
› National identity cards
› Passports
› Social insurance cards

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 184
Chart overview | List of abbreviations

Chart overview List of abbreviations

Page
C01 The main stages of the semiconductor value chain 22 ADAS advanced driver assistance system
C02 Core competencies in the segments 24 AI artificial intelligence
C03 R&D expenses 35 ASIC application-specific integrated circuit

C04 Revenue and Segment Result of the BLDC brushless direct current
Automotive segment 45 BLE bluetooth low energy
C05 Revenue and Segment Result of the CSR corporate social responsibility
Green Industrial Power segment 46 DC-DC direct current to direct current conversion
C06 Revenue and Segment Result of the DRAM dynamic random access memory
Power & Sensor Systems segment 47
GaN gallium nitride
C07 Revenue and Segment Result of the IC integrated circuit
Connected Secure Systems segment 49
IGBT insulated gate bipolar transistor
C08 Revenue by segment 50
IoT Internet of Things
C09 Financial debt by currency 53
LED light-emitting diode
C10 Development of the Infineon Technologies AG share MEMS micro-electromechanical system
compared to Germany’s DAX Index, the Philadelphia
Semiconductor Index (SOX) and the Dow Jones ML machine learning
US Semiconductor Index for the 2023 fiscal year MOSFET metal-oxide-semiconductor field-effect transistor
(daily closing prices) 59 NAND not AND
C11 Shareholder structure as of the end of the 2023 fiscal year 59 NFC near-field communication
C12 Dividend per share for the 2014 to 2023 fiscal years 60 PSoC programmable system-on-chip
C13 Risk assessment matrix 66 RF radio frequency
Si silicon
SiC silicon carbide
ToF time-of-flight
USB universal serial bus
Wi-Fi wireless fidelity

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 185
Financial calendar 2024

Financial calendar 2024

February February May August November

Tuesday Friday Tuesday Monday Tuesday

6 23 7 5 12
Publication of Annual General Publication of Publication of Publication of
first quarter 20241 Meeting 2024 second quarter 20241 third quarter 20241 fourth quarter and
results virtual results results fiscal year 20241
results

1 Preliminary

Infineon | Annual Report 2023

Management Board and Supervisory Board Combined Management Report Consolidated Financial Statements Further information 186
Imprint

Imprint
Published by: Infineon Technologies AG, Neubiberg (Germany) Forward-looking statements
This report contains forward-looking statements about the business, financial condition, earnings performance
Editors: Investor Relations, Accounting, Consolidation & Reporting and strategy of the Infineon Group. These statements and assessments are based on assumptions and projections
Copy deadline: 23 November 2023 resting upon currently available information and present estimates. They are subject to a multitude of uncertain-
Fiscal year: 1 October to 30 September ties and risks, many of which are wholly or partially beyond Infineon’s control. Infineon’s actual business devel-
opment, financial position, performance and strategy may therefore differ materially from the statements made
Independent auditors: KPMG AG Wirtschaftsprüfungsgesellschaft, in this report.
Munich (Germany)
Designed by: HGB Hamburger Geschäftsberichte GmbH & Co. KG, Specific disclaimer for Omdia reports, data and information referenced in this document:
The provision of the information used by Infineon does not imply any judgment on Infineon and no liability is
Hamburg (Germany) assumed for the information.
Photography: Page 4: Werner Bartsch, Hamburg (Germany)
Page 10: Bernhard Schmidt, Munich (Germany) Specific disclaimer for S&P Global – reports, data and information referenced in this document:
The S&P Global Mobility and S&P Global Commodity Insights reports, data and information referenced herein
Page 12: Tobias Eble, Munich (Germany) (the “S&P Global Materials”) are the copyrighted property of S&P Global Inc. and its subsidiaries (“S&P Global”)
and represent data, research, opinions or viewpoints published by the relevant divisions within S&P Global, and
Note are not representations of fact. The S&P Global Materials speak as of the original publication date thereof and not
as of the date of this document. The information and opinions expressed in the S&P Global Materials are subject
The following were brand names of Infineon Technologies AG to change without notice and neither S&P Global nor, as a consequence, Infineon have any duty or responsibility
in the 2023 fiscal year: to update the S&P Global Materials or this publication. Moreover, while the S&P Global Materials reproduced
Infineon, the Infineon logo, AURIX™, FlexRay™, ModusToolbox™, PROFET™, herein are from sources considered reliable, the accuracy and completeness thereof are not warranted, nor are
the opinions and analyses which are based upon it. S&P Global and the trademarks used in the Data, if any, are
PSoC™, TRAVEO™. trademarks of S&P Global. Other trademarks appearing in the S&P Global Materials are the property of S&P Global
or their respective owners.
Public

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Infineon | Annual Report 2023

Infineon Technologies AG
Headquarters: Am Campeon 1–15, D-85579 Neubiberg near Munich (Germany), Phone + 49 89 234 - 0
Contact for Investors and Analysts: investor.relations@infineon.com, Phone + 49 89 234 -26655, Fax + 49 89 234 - 955 2987
Media Contact: media.relations@infineon.com, Phone + 49 89 234 -28480, Fax + 49 89 234 - 955 4521
Visit us on the web: www.infineon.com