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Electronics Production | August 21, 2007

Infineon acquires LSI's<br>mobility product line

Infineon will further strengthen its activities in the field of communications by acquiring the mobility products business of LSI Corporation (LSI) for a price of approx. Euro 330 million plus a contingent performance-based payment of up to Euro 37 million.
Pending the approval of the corresponding authorities, the deal is expected to be closed in the fourth calendar quarter of 2007.

Through the first six months of 2007, LSI's Mobility Products Group reported sales to the tune of Euro 150 million. From the acquisition, Infineon expects a clearly positive EBITA contribution (EBIT before amortization of acquisition-related intangible assets) in 2008. LSI's Mobility Products Group comprises mainly mobile radio baseband processors and platforms that complement Infineon's existing portfolio. The transaction does not include production facilities. As part of the transaction, approximately 700 LSI employees will join Infineon.

“This move demonstrates our commitment to maintain and grow our leadership in the wireless market. The business acquired from LSI will significantly strengthen our position at important mobile phone makers and will add highly qualified experts to the Infineon team," said Dr. Wolfgang Ziebart, President and CEO of Infineon Technologies.

“Infineon's strong commitment to the mobility market will ensure our customers continuity of the LSI product line, ongoing customer support and a broader portfolio of solutions to address their needs," said Abhi Talwalkar, LSI president and chief executive officer. “LSI is fully committed to work with Infineon to provide a seamless transition for customers."

Analysts expect that world wide approximately 1.1 billion mobile phones will be sold in 2007. This makes mobile phones the biggest market segment for electronics. Annual growth for the next three years is expected to be around 6.5 per cent, driven mainly by growth in the Far East and India.

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