Industrial Power Control

(1)

Dr. Helmut Gassel

Division President

Industrial Power Control (IPC)

Industrial Power Control

Investor and Analyst Webcast

(2)



IPC Segment Overview



Growth Drivers and Market Opportunities



Why We Are Winning

(3)

48% 12%

40%

EMEA America

APAC (incl. Japan)

Industrial Power Control (IPC) at a Glance

[EUR m]

Revenue split by region*

* Based on revenues by fulfillment region for FY 2012.

Q1 F Y 0 9 Q1 F Y 1 0 Q1 F Y 1 1

Revenue and Segment Result development

Q1 F Y 1 1 186 191 204 216 196 ₁₇₄ ₁₇₇ ₁₈₁ 52 54 47 49 ₃₉ 27 26 26 28.0% 28.3% 23.0% 22.7% 19.9% 15.5% 14.7% 14.4% 0% 10% 20% 30% 0 100 200 300 Q1 FY11 Q2 Q3 Q4 FY12 Q1 Q2 Q3 Q4 IPC revenue [lhs] IPC SR [lhs] SR margin [rhs]

 Strong sales in Asia, but also Europe given customer base there.

 Revenue stable for last quarters, but very weak order entry given overall economic situation.

 Margin compression driven by top line plus cost of investment in capacity and higher OpEx.

(4)

Top Customers and Distributors

20 Nov 2012

Top customers

64%

36%

Direct customers Distribution

Revenue split by sales channel*

* Based on revenues by fulfillment region for FY 2012.

(5)

IPC Portfolio Addresses Applications Across

a Broad Spectrum of Power Levels

~1 kW – ~1.6 MW ~100 kW – ~10 MW ~0.1 kW – ~10 kW

Power level of applications and products are approximate.

Driver ICs + Discretes Driver Boards + IGBT modules Stacks

solar PV inverter onshore wind offshore wind VSC HVDC home appliances

variable speed drive train

data center

100 W 1 kW 10 kW 100 kW 1 MW 10 MW 100 MW 1 GW 10 GW

VSC = voltage source converter HVDC = high-voltage direct current

Energy generation

Energy transmission

Energy consumption

(6)

Market Shares Worldwide

20 Nov 2012 9% 10% 10% 11% 24% Fuji Electric Renesas Fairchild Internat. Rectifier Infineon

Discrete IGBTs 2011*

Highlights

* Source: IMS Research (an IHS company) „Power Semiconductor Discretes & Modules – Edition 2012“, August 2012.

 Total market size: $1,120m.

 Biggest markets: Europe, China, Japan with ~$300m each.

 1.5%-points market share gain in 2011 (incl. “bare die” business).

3% 11% 13% 19% 32% Sanyo Semikron Fuji Electric Infineon Mitsubishi

IGBT modules 2011*

 Total market size: $4.1bn.

 Biggest markets: Europe, China, Japan with ~$1bn each.

 Infineon #1 in EMEA (32% m/s), and #1 in Americas (33% m/s).

(7)

Market Shares in China

10% 12% 12% 14% 22% Mitsubishi Renesas Internat. Rectifier Fairchild Infineon

Discrete IGBTs 2011*

Highlights

* Source: IMS Research (an IHS company) „Power Semiconductor Discretes & Modules – Edition 2012“, August 2012.

 Market size: $1,170m.

 Infineon #1 in APAC (excl. China) with 33% market share.

 Strong position in mid- to high-power modules. 7% 8% 15% 16% 35% Sanyo Semikron Fuji Electric Infineon Mitsubishi

IGBT modules 2011*

Highlights

 Market size: $309m.

 Infineon also #1 in APAC (excl. China) with 19% market share.  Major applications: home

(8)

Drives By Far Biggest Application

Segment; Renewables About 20%

20 Nov 2012

Revenue split by application in FY 2012: EUR 728m

Drives Renewables Traction UPS Home Appliances Others

(9)

Bookings Cyclically at Very Low Levels

0 1 2 0 100 200 Q1 FY11 Q2 Q3 Q4 Q1 FY12 Q2 Q3 Q4 Rev en ue s [Q 1 FY1 1 = 100] Book-to-bill [rhs] Drives Renewables Traction UPS Home Appliances Others

Revenue by application

(10)



IPC Segment Overview



Growth Drivers and Market Opportunities



Why We Are Winning

(11)

Factory Automation: Huge Savings

Potential By Variable Speed Drive (VSD)

Global electricity demand by end-use application of electric motors

Comments

 About 300m electric motors are in use worldwide, responsible for ~2/3rd_{of the} total industrial power consumption. Depending on the application, up to 30% power can be saved by VSD. Today, just 15% of all electric motors are VSD-controlled.

 “Mechanic goes electric”; e.g. hydraulic is replaced by electric motors.  Rising labor cost in low labor cost countries drives automation level.

Drives

Pumps

Com-pressors

Fans

(12)

Wind: All-time High in 2012;

2013 to Suffer From PTC Cuts in the US

20 Nov 2012 Page 12

Market development wind

Comments

 Drop in the US wind market due to cuts in PTC*.

 Ongoing grid coupling problems in China still limit faster growth of new installations.

 South America on the rise.  Europe stable (both in new

installations and repowering).

0 10 20 30 40 50 2011 2012 2013 2014 2015 2016 Europe APAC North America

Latin America, Africa, Middle East

Source: IHS: “Global Wind Energy Market Forecast”, June 2012

[GW]

(13)

Photovoltaics: Europe to Dip in 2013;

APAC And the Americas Continue to Grow

Development of PV inverters

Comments

0 10 20 30 40 50 60 2011 2012 2013 2014 2015 2016 EMEA APAC America

Source: IMS Reserch (an IHS company): “The World Market for Photovoltaic Inverters 2012”, July 2012.

 Germany: Rush in 2012 before FiTs are cut.

 Japan: New FiTs since July 2012 as part of the new clean energy policy.

 China: Expected to be the biggest

market from 2013 onwards. Utility-scale installations (100 – 500 kW) are

dominating the market.

(14)

Besides High-speed Trains, Metro Trains

Are an Attractive Segment of Traction

20 Nov 2012 Page 14

Market dev. metro systems

Comments

 Deployment of metro systems driven by increasing urbanization, especially in APAC and the Gulf states.

 Expansion of express railway network included in China’s 12th_FYP.

 Semiconductor content per MW of metro trains is comparable to that of high-speed trains.

84

107

138

0 40 80 120 160 1990 2000 2011

Source: SCI Verkehr: “Metrofahrzeuge – Weltweite Marktentwicklung”, 2012 Bangkok Skytrain. Courtesy of Siemens.

(15)

Growth Driver Industrial and Off-Road

Vehicles

Trends

 General advantage of pure electric and diesel-electric drives over diesel:  less fuel consumption,

 less CO₂ emission,  less noise pollution,

 less downtime (due to less frequent refueling, less frequent maintenance).  First industrial vehicles already on the market; hybrid buses and mining

vehicles on the rise.

(16)



IPC Segment Overview



Growth Drivers and Market Opportunities



Why We Are Winning

(17)

Infineon’s Technology Roadmap Focuses on

Increasing Wafer Size and Power Density

Improvements in

power density

30 50 70 85 110 170 250 0 50 100 150 200 250 300 1990 1995 2000 2005 2010 2015 2020 P ow e r dens ity [ kW / c m 2 ] 125°C 150° _C 175° _C 200° _C

Increasing wafer size and

decreasing wafer thickness

220 180 140 120 100 90 70 0 50 100 150 200 250 1990 1995 2000 2005 2010 2015 2020 W a fer th ic k nes s [ µ m ] 100 mm 125 mm 150 mm 200 mm 300 mm

 Wafer thickness will reach 70 µm for 1200-Volt-IGBT products at the end of this decade.

 Thinner wafers, improvements in transistor design and higher

junction temperatures allow increasing power density.

(18)

New Materials: Silicon-Carbide (SiC)

20 Nov 2012 Page 18

2001:

SiC diode thinQ™

SiC JFET CoolSiC™

2011:

SiC Easy Module

2012:

 Infineon has a ten year track record in SiC technology.

 SiC is used where highest efficiency is key: a.) PV inverters,

b.) power supplies for high-end PCs, servers (data centers), telecom.  SiC is a challenging technology: about a decade from diode to transistor.  Infineon also provides specialized control circuits and drivers that maximize

(19)

Infineon Further Advances Performance

Through Innovations in Modules

Ever-increasing power density

IGBT2

 34mm module  1200 V  0.46 kW/cm2  Tj=125°C

IGBT3

 EconoPACK™2  1200 V  0.89 kW/cm2  Tj=125°C

IGBT4

 EasyPACK2B  1200 V  1.16 kW/cm2  Tj=150°C

IGBT5

 PrimePACK™2  1200 V  1.31 kW/cm2  Tj=175°C

1995

2001

2007

2014

(20)

Broad Portfolio and Know-How Enable

Infineon to Address System Solutions

20 Nov 2012 Page 20

 Combining our technologies, experience and customer relationships to boost Infineon’s value-add at the system level.

 Value of power semiconductors is ~60-80% of total semi BoM.

 System know-how and application understanding are prerequisite to develop differentiated products and system solutions.

Addressed by IPC

Addressed by other Infineon divisions Example:

(21)



IPC Segment Overview



Growth Drivers and Market Opportunities



Why We Are Winning

(22)

Summary

 Winning technologies:

 chip / module technologies with superior power density;  strong capability in breakthrough material SiC.

 Broad portfolio and know-how enable Infineon to address system solutions; increasing focus on control ICs.

20 Nov 2012

 Broad portfolio covering all relevant applications and end markets.

 Leading market share in all relevant product groups and regions.

 Strong secular mid- to long-term growth drivers:  automation,

 renewable energies,

 traction, CAV (commercial & agricultural vehicles),  electricity infrastructure and power supply backup

(23)

Industrial Power Control

Dr. Helmut Gassel

Division President

Industrial Power Control (IPC)

Industrial Power Control

Investor and Analyst Webcast

Table of Contents



IPC Segment Overview



Growth Drivers and Market Opportunities



Why We Are Winning

Industrial Power Control (IPC) at a Glance

Top Customers and Distributors

64%

36%

IPC Portfolio Addresses Applications Across

a Broad Spectrum of Power Levels

Energy generation

Energy transmission

Energy consumption

Market Shares Worldwide

Discrete IGBTs 2011*

Highlights

IGBT modules 2011*

Market Shares in China

Discrete IGBTs 2011*

Highlights

IGBT modules 2011*

Highlights

Drives By Far Biggest Application

Segment; Renewables About 20%

Revenue split by application in FY 2012: EUR 728m

Bookings Cyclically at Very Low Levels

Revenue by application

Table of Contents



IPC Segment Overview



Growth Drivers and Market Opportunities



Why We Are Winning

Factory Automation: Huge Savings

Potential By Variable Speed Drive (VSD)

Comments

Wind: All-time High in 2012;

2013 to Suffer From PTC Cuts in the US

Market development wind

Comments

Photovoltaics: Europe to Dip in 2013;

APAC And the Americas Continue to Grow

Development of PV inverters

Comments

Besides High-speed Trains, Metro Trains

Are an Attractive Segment of Traction

Market dev. metro systems

Comments

84

107

138

Growth Driver Industrial and Off-Road

Vehicles

Trends

Table of Contents



IPC Segment Overview



Growth Drivers and Market Opportunities



Why We Are Winning

Infineon’s Technology Roadmap Focuses on

Increasing Wafer Size and Power Density

Improvements in

power density

Increasing wafer size and

decreasing wafer thickness

New Materials: Silicon-Carbide (SiC)

2001:

SiC diode thinQ™