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Infineon Technologies AG, the world’s sixth largest semiconductor manufacturer, today announced results for its fiscal year 2003, ended September 30. The company claimed strong and healthy demand for its products and even declared a profit for its fourth quarter, reflecting the industry’s general rebound trend.

The company’s revenues for fiscal 2003 were $7.08 billion, increase of 26% compared to the previous fiscal year. Fiscal year 2003 net loss was $501 million, reduced from a $1.17 billion loss in the prior year. In the 2003 fourth quarter, net income amounted to $56.43 million. This was the first profitable quarter after nine consecutive quarters of losses.

The company noted stronger demand as well as manufacturing cost reductions in its Memory Products business group and rising chip prices for its memory products since the second half of calendar year 2003, which generated a 34% year-on-year sales growth. The sequential revenue growth was mainly achieved by higher average selling prices for memory products as well as a strong increase in bit shipments and further cost and productivity improvements. They also show an increased demand for PC units and system memory per unit, as well as the Memory Products group’s extended market share in the DRAM segment.

Despite a worldwide weakness in the overall automotive industry, the Automotive & Industrial business group again improved its strong quarterly and annual revenue performance compared to fiscal year 2002. For its Secure Mobile Solutions business group, Infineon also achieved a positive result in the fourth quarter of the 2003 fiscal year and reported growth in sales by 27% year-on-year. The company’s Wireline Communications business group significantly improved its revenues and EBIT loss compared to the last fiscal year, but continued to face reduced capital spending by global telecommunication carriers, weak demand and overall pricing pressure.

Basic and diluted loss per share for fiscal year 2003 was $0.69, which improved from a loss per share of $1.69 in fiscal year 2002.

Expenditures for Research and Development in fiscal year 2003 amounted to $1.26 billion, or 18% of sales, compared to $1.26 billion or 22% of sales, in the prior fiscal year. These amounts included acquired in-process research and development charges of $6.91 million in 2003 and $42.61 million in 2002.

Fiscal year 2003 revenues outside Europe constituted 57% of total revenues, up from 55% in the previous year, which is in line with the strategic goal of Infineon’s Agenda 5-to-1 program to raise sales and market share in all growth markets. 23% of total revenues were achieved in the North American market and 34% in the Asian market. In fiscal year 2003, Infineon further expanded its number 2 market position in Europe, improved from rank 7 to rank 5 in North America, and from rank 8 to rank 6 in Asia.

As in 2002, iSuppli ranked Infineon as the world’s third-largest DRAM supplier in the first half of 2003. In the first quarter of fiscal year 2003, only one year after the start of volume production, the 300mm plant in Dresden reached cost-cross-over. At the end of fiscal year 2003, the 300mm manufacturing at Dresden has reached a capacity of 30 000 wafer starts per month, and has thereby already achieved a productivity advantage over 200mm manufacturing of more than 30%. In the 2003 fourth quarter, the Memory Products group announced the successful booting of Intel’s “Lindenhurst” server platform using Infineon’s 512Mb DDR2 SDRAM. The manufacturing alliances with Nanya, Winbond, and SMIC will enable Infineon to further expand its manufacturing capacities in 2004.

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