Infineon Technologies AG (ETR:IFX)

CMD 2021

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Oct 5, 2021

We live in a world that continuously reinvents itself, a world with visionary ideas, inspiring concepts, and smart answers to key questions of our time. How can we serve our environment. How will our mobility needs be met in the future? How will we communicate? And how can we protect our data? Microelectronics gives answers to these questions. They are the link between the digital and the real world. Semiconductors from Infineon enable technologies to achieve more and consume less while being accessible to everyone. Our values capture this mission: and partnership performance. We make life easier, safer, and greener for a better future. Infineon, part of your life, part of tomorrow. On behalf of the Infineon management, a warm welcome to the IFIX Day 2021. It has been a bit over 3 years since we met you at our Capital Markets Day in London in June 2018. A lot has happened at Infineon since then. Our revenue base has grown by €3,500,000,000 Both organically and by the milestone acquisition of Cypress. Infineon now is a top 10 semiconductor company And a member of the Eurostox 50 Index. What continues is that we provide innovative solutions to megatrends of society To make life easier, safer and greener. Let's now look at the agenda for the coming 3.5 hours. We will start with the big picture. Reinhard Ploss, CEO of Infineon, We'll set the scene and provide a comprehensive overview of market and technology developments, our strategy and growth perspectives. Sven Schneider, our CFO, will add a first financial view. You will already have seen our leitmotif for today, Electrification and digitalization creating sustainable value. Jochen Hanebeck, COO of Infineon will host a session on electrification. He will be joined by Constanze Hoefenbecker, Board member of Infineon since April and responsible for digital transformation. Furthermore, You will get business views from the division presidents of IPC, ATV and PSS, Peter Waver, Peter Schiffer and Andreas Woschets. After a short coffee break, morning decaf in America, afternoon tea or cappuccino in Europe A night espresso in Asia, we will continue with the digitalization session hosted by Helmut Gassel, Infineon CMO, together with Constanze and joined by the division president of CSS, Thomas Rostec, as well as Andreas and Peter representing PSS and ATB. In our 4th and final session, Sven together with Jochen and all 4 division presidents will talk you through Infineon's value creation and how we execute our target operating model. All 9 speakers will be available to take questions from you. Needless to say, all of them are fully tested. You can ask your questions throughout the event by using the question box at the bottom of your screen Or via email to ifxdayinfineon.com. After the Q and A, Reinhard will wrap up our Capital Markets Day for closing remarks. Today's entire event will become available for replay And we will provide the materials presented for download shortly afterwards. Now, Enjoy an informative IFX Day 2021 with Reinhard now coming on stage. Also, from my side, a very warm welcome to everybody online. It's a great pleasure To have you with us, even so, we cannot meet in person. Alexander talked about Infineon and he said, let's have a coffee together. And what I tell you, what we want to We have a fantastic story, and we believe very much that the journey Infineon is on It's a very successful one. Now very often, we look into the future and think about what can we achieve. What are the changes happened and the base which we have in order to move forward? The Infineon Growth story is very much based at the very beginning of the break of the century on being a technology oriented company. Great technologies like CoolMOS, OPTIMOS and others were making it into the field. We were able to move from a high teens in the number or the ranking of Power semiconductor to a clear number 1 with being technology oriented. And already at that time, we recognized That this will carry us forward and will continue, but there are things we need to evolve from. We became a system integrator as a title, a system provider. And the next topic, which we will be moving on, is a solution provider. So it's not only that we were able to have a constant growing revenue base, A constant outgrowing capability to the market. It is something that this was also based on the ability to change As we move forward, the company Infineon today is, to a large degree, still the only Infineon. But at the same time, it's also not anymore the Infineon. We evolved. And we will today talk about How we will move forward, how the evolution will be tailored and will fit to the new requirements. Many of the things which have been driven, and I will address this later, have always been around and were generating our Energy, our way to move. Today, we are at a point where we believe we have a lot of Elements which are important to differentiate. I mentioned technology had been the core. But it is very obvious, If you only have one element you base your strategy on, that is pretty dangerous. Being able to base Your strategy on multiple elements gives you a much higher resilience. And in order to outgrow the markets, this is also needed Because sooner or later, concepts get exhausted. Now let's have a look in What are the key elements which are for Infineon the base in order to outperform the market? 1st of all, a topic which we talk about since quite a while, but this has become a real Driving force for Infineon, system understanding and solution expertise. What is a customer having as a problem? Where is a customer heading to? How can we support the customer in order to be more successful? Technology take a while to develop, so we have to be ahead of the curve. All of these is around the idea of system Very important, we know what we do. And in some points, we are also having the desire To provide solution to the customer, he has not thought of. The next point, which is of very high importance, is Outstanding customer relationship, being embedded in the customer, being Desired by the customer is a key element of ours. We want that the customer is not making any decision Without having thought about I should talk to Infineon first. Maybe he does not buy finally from us, but Infineon should be in the center of his thinking. How to? This will go here Over the course of today's presentation because there is a lot which we have to do in order to Be in the center of this thinking of our customer in a new in a digital time. The next point, of course, is we are extremely proud of quality and technology leadership. Many people say quality. Quality for me is a total thinking within the organization. We commit, We deliver. And even under these tight conditions of allocation, we do our best. And Well, we cannot give on, but what we commit, we deliver. And when you look at automotive, but even beyond, Our customers really appreciate when you get a product, a technology from Infineon, you can rely on. Technology leadership, That is where we started from. And you see, it still lasts. And it will last for quite some time because we believe that innovation is key. And this topic of innovation being a differentiator, former times, technology innovation. Today, innovation in many domains, How we interact with the customer on the digital base? What is the software the customer requires? What are technology elements? What Can we add in total system solution? They are very fascinating elements, and I do not Want to mention them in detail. Now, even so I'm absolutely enthusiastic, and you will hear about this later. But there is more. Differentiation also comes from the fact how we Manufacture. This is very clear that the Infineon manufacturing strategy has adopted significantly over time. Some parts we do not manufacture in house anymore. We manufacture only where we can differentiate by manufacturing. And the value of it is very obvious in the current time. We are in full control of our investment channel and we are also full or in control about how and where to add capacity. It's a real advantage. And it's also something the customer appreciates because he knows Infineon is able to deliver. We, I would say outperform others in providing capacity. And here you see, it is put together. We stand on 5 strong pillars which are circled around the customer value creation. We will See that these are working together quite nicely. And for me, it's quite fascinating to see Let the divisional aspect which we have and where we only were serving some markets in ATV. Now ATV is supporting the other divisions in order to serve automotive customer and vice versa. The capability of the Camp du Nie lies significant on its capability and culture to collaborate. But culture, Culture very much comes along the lines of where we think about what motivates us. There Always has been the motivation. And at the very beginning, it was slightly different about energy efficiency. We can provide And at that time, a lot of cost saving. But very soon, I can remember we thought about the CO2 reduction. Climate change today It's in the core of Infineon. It's driving what we do. But beyond that, the idea of resource scarcity, It's a thing which has driven us for the last 20 years and will continue to drive us in the future, I'm pretty sure, for more than 50 years. We as society, as a global society, have to be able to have a good life, A safe life and a green life. And this is only possible when we think about this topic which I just addressed. But there is more to come which is driving us. The democratic and the social change, the aging society, the number of people living on This planet, all of this is another factor which requires to think about it. But at the same time, it offers a lot of possibilities, which we can address as the first topic. Similar to that urbanization and with now the new style of working maybe so slightly distributed urbanization. But nevertheless, An urban society. These 3 have been driving us for quite some time already. And we added Some years ago, in the digital transformation, because we are very sure all of this cannot be resolved without Using digital capabilities in order to get managed it. Therefore, we see 2 major areas Coming along, the electrification and the digitalization. Now electrification first. If you want to go CO2 low or free in the next step, there's no way Mendy, the must haves we are taking care for. First of all, mobility. We want to have mobility as an individual or public transport, all of this. It will not go away. So Infineon supports the transition of mobility based from CO2 related to No CO2 based. And this will give a lot of push forward. It will grow by a factor of 9 up to 36,000,000 of cars. The next is to generate it A very impressive number. The photovoltaic installation will rise until 2,030 by a factor of 5 From 800 gigawatt to 4,200 gigawatts. We make that happen. You have to connect the sources and the users of it. All of this is very important to look at. The next topic, it is the digitalization. And I well, you may debate if this is really The key element, and I will tell you, yes, it is. Because if you cannot manage an autonomous driving car, To support humans. And this is what it is about. When you read currently about the missing number of truck drivers. Why? Not letting the truck drive automatically. First instance, on the highway, but moving on. But here more to come. I already think about when I retire and become pretty old, well, still some years to go, I would be happy to have an autonomous car, which on a finger snip will come and pick me up. Very tightly connected to this is a topic of IoT. The Internet of Things will grow by Growth 3.5 in the next 5 years. And we will go to 20,000,000,000 IoT connected devices. It's about generating value. It's not only about connecting a sensor. This is fine, but that's not enough. We have to move on from there. How do I generate value? How can I create? And how can I Make that happen? And here you see, these two topics will drive. And as I explained, they are derived From major long lasting requirements, driving factors, translating in very Create elements of electrification and digitalization where we can drive things along the lines of what we can, Solution, technology, innovation, putting things together. And this picture gives you just a glance. I don't go through in detail, but you will see it again and again. You have 2 axes, the green power topic And the connectivity topic, moving up to this autonomous. I like this automated vacuum cleaner If it were to really clean everywhere and would not run between my legs, fantastic. Why not moving on with this? And there we can do a lot. We can really generate value. And what you see, these are the topic to be addressed. These are only a small selection. And when you see, we are not talking here basically a lot of single products. I'm not talking about MOSFETs. I'm not talking about microcontrollers or sensors. I talk About the problems, the topics which we solve. But of course, they are in. With this, we look at it. There are when you combine now this picture, many of these products we develop will serve the other one. And it's quite interesting. The art will be how we will be using the topics or the product, the technologies We developed here. Just let's pick the silicon carbide. It was ramping up very quickly in industrial, now coming very Strongly in automotive, moving to power supplies, one technology developed together and moving into. So here, extremely important moving forward. Many of these technologies matter. And when you look at the milestones of electrification, this is something which I think is as important as the milestones in digitalization. We came from the cool MOS OPTIMOS pure MOSFETs. We launched this. We moved on. I can remember 19 9, we were sitting together, a small team, still a lot of people around here and said, we want to have 10% market share in this market. Looking back, the way we thought about being successful was not the way we finally achieved, But we dared. We made the transition. We changed the game, and we continue to change the game. Yes, we launched silicon carbide very early, and we're a little bit late on the silicon carbide MOSFET. It doesn't matter. If you're a company who is willing to bite the bullet in order to catch up and have the capability, We buy by 4 a number one capability and have the competence in doing so. With the acquisition of International Rectifier and Siltectra, we really moved on making a change in this, Similar with the digitalization. I do not go into the details, but of course, the key change here For the acquisition of Cypress, it was obvious to us, we need software, we need compute capability, and we need connectivity. Cypress really was the best fitting element. And I'm deeply impressed how the progress is together with the team, despite the fact During all the integration phase, we could not meet. So when you look what we have achieved, this is a I believe that our claim moving into the future is a good claim, a real claim, global leader in power, 2 times as big as The number 2, an unmatched portfolio in this domain, quality leadership and complementing this Area of power semiconductor now with a very strong portfolio, gallium nitride, silicon carbide, but also silicon and a lot of the packages. We solve your problem in power, but we do that also beyond. And this picture gives you another glance On what we are doing. It is not only that we go with power. How can we put power together? And here, it is We think about customer system. We talked about those. I do not go into the detail. We think about the ecosystem, how it is put together. What is the software required to have full system functionality? And again, what is the base? This idea of P2S putting things together Is along these lines. P2S is a generation, but same times also the pull factor in it. With this, we look back, as Alexander said, we have the IX Day 15. We talked a lot about Structural growth drivers. The majority which we have seen 3 years ago is still there, It's continuing. And what is really fascinating, more is added. Many of those which are These will continue to support our growth, our capability to outgrow the market, To innovate. And when I talk about this, it's very much about how and here, it's quite an interesting picture. Think about where we come from. And now we can translate it to concrete elements, an intelligent world to come. What can we do there? What are the elements which we will be addressing in detailed market and the solutions to come? You see, a lot is On the verge of the system. So very fascinating. And I think with this, I want to conclude. Profitable growth journey since 1999. We have been evolving from a To add elements, to harness a growth by a factor of 10, We are very sure that what we have built up is the base in order to continue to grow, Continue to grow. And I didn't say that the first slide because I served it for that point, and I served it when I hand over to Sven. Growth It's something which shows us and the capability to outgrow the market that we have the right topics on hand. But growth is not Enough. You have to grow profitability at the same time. And many of these topics, Which I have been addressing, have helped us to become increasingly profitable, A journey which we have started some time ago, and I haven't talked so much about numbers, but numbers Meta, because they show us if this is what we claim is coming true. And the claim we have set ourselves will be supported quite well. So with this, I want to conclude on the last point. To be more successful than the market. We have the ingredients to make this happen. We are Set with all this what we have done, especially with the acquisition also of Cyprus To generate more value to the customer and to the shareholders and The ability to innovate and bring this to the market. For me, an unbelievably fascinating story, And I'm very happy to listen together with you on the details. But before that, the numbers. Enjoy the rest of the presentation. Sven, it's your turn. So looking a little bit into the numbers, you are all very well aware of our so called target operating model, which Summarizes the key parameters. The revenue growth of 9% plus per annum, the profitability level of 19% And the investment to sales of 13%, all that through the cycle. So how Do our numbers compare to our model? With that, we want to first have a short look, and I can really cut it short, Into the fiscal year, which just ended last week, so fiscal 'twenty one, before we go into some guidance for 'twenty two. So fiscal 'twenty one and stepping back a year from now looked like a difficult year. Nobody was really certain How steep the recovery will be? Will it be V shaped? Will it be a U shape? Will it be different? We had to, and that's, of course, a positive problem. We had to upgrade our guidance a couple of times to a better guidance towards the year. And now look at these numbers, please. We came out as guided, around €11,000,000,000 in revenues, Above 18% in profitability, around €1,600,000,000 in investments and with a pretty healthy free cash flow generation of €1,500,000,000 which gives us a lot of headroom and speed with regards to deleveraging, and we will come back to that In session, value creation. Now even more interesting probably for you is the year ahead. And We cannot organize the Capital Market today and not talk about 'twenty two, although in a normal period, We would be in such a position only in November, but now having a look at these numbers. So we are forecasting A pretty strong growth. We call it a mid teens percentage increase compared to the €11,000,000,000 for the year 'twenty two. And let's be very clear, This is a number which is capacity constrained. It's not a demand constraint, but this is our view of the current capacities We have in house, and we will hear a lot about it from Jochen in a second. And of course, also the external capacity from foundries. So mid teens growth on the top line. The profitability level will be increased to an around 20% level. Investments, you have seen that probably over the course of today already, will be increased significantly to 2,400,000,000 But the investment priorities for the next fiscal year. And of course, we will have a close look to the free cash flow. So despite a €2,400,000,000 number in investments, we will still generate €1,000,000,000 of free cash flow. By the way, All these numbers are based on a euro dollar exchange rate of 1.20. With that, I would already be at the end of my Sneak preview. With regard to the numbers, there will be one additional information that's a spoiler regarding a dividend proposal for that. Welcome to this second session of our Capital Markets Day 2021, this session is about electrification. Electrification is key To achieve the Paris Climate Agreement. And we are not on track. Current projects say That global temperature will rise by 2.7 degree, locally, regionally, much higher numbers with potentially Catastrophic effects. We have to act and we cannot afford to act in sequence As those suggest who reason about the CO2 balance of a current electric car powered by Non green electricity. We have to pull all levers now and simultaneously in order To manage to cope the CO2 emissions globally for the decades to come. And this is where Infineon comes into the picture. Electrification is our home turf. We are the global market leaders, Leader for power semiconductors in all categories by a margin. We can help to save this planet And that makes us proud, drives us and gives us purpose. In this session, you will hear now About the trends in power generation, transmission, storage, energy saving And conversion of fuel consumption. And with this, I hand over to Peter Waver Talking about generation and transmission. Have fun. Thank you very much, Jorgen. Infineon is instrumental for supporting the whole energy conversion chain From generation, predominantly PV, wind, over transmission and storage, finally to consumption. For example, data centers, industrial applications, e mobility. While These are the things that drive electrification looking forward. They at the same time generate business opportunities at large scale. Let me drive your attention to the graph in the upper left corner. Here, you see the typical power semiconductor content by application In euro per megawatts. If you look into the traditional forms of energy generation like fossil fuel, nuclear and hydro, The number is nil, almost nil. So no significant amount of semiconductor is required They're in the range from €2,000 up to €5,000 depending on the application. So very meaningful, very good business opportunities For Infineon, let's have a look into the row below the graph. The net additions in 2020 as they come in In the now starting decade, and that means 110 on wind, we would say on track so far, 240 To drive down the CO2 emission in the developed countries to 0 until 2,050, we, of course, have to be more aggressive. That would mean, again, roughly doubling the installations for wind up to 2 40 gigawatts, for solar, 420 And Storage Remarkable 33. On the ball chart on the right hand side, you see what this means, Aggregated cumulated number until the end of the detail. That translates for the sustainable development scenario to 2,400 gigawatts, 2.4 terawatts and 4,200 gigawatts in the case of the net zero emission scenario. And since we have other very good examples, especially in the area of consumption, I would now like to hand over to my dear colleague, Peter Schiffer, Give you some insights what's going on, on the XEB side. Thank you. Yes. Thank you, Peter. Electromobility will be a key area of power usage, and the trend towards electromobility has gained really momentum in the recent quarters. The urgent need for climate action in the form of emission regulations, the Increasing customer demand, the accelerated OEM roadmaps for the electrified cars and newer technologies positive contributors to this acceleration. You see this acceleration on the graph on the left hand side. And this compares the analyst forecast for plug in hybrids and for the battery electric vehicle production units From 2 years ago versus last month. And the estimates increased around about a fact of 1.2 for 2025 and even 1.5 for 2,030. And at last month's International Auto Show, the AAA Mobility in Munich, you could see this acceleration in action where most OEMs showcased There are new battery electric vehicles and the hybrid models. Infineon will shape the electromobility trend, and we also will benefit from it. So today, a car with a classic internal combustion engine has round about USD 4.90 Of semiconductor content. The semiconductor bill of material increases strongly as cars become electric. In a plug in hybrid or a battery electric vehicle, there's a semiconductor bill of material of about US950 dollars Which is twice as much. And if more important, the majority share of that additional bill of material relates to power And within the power semiconductor part, inverters account for roundabout 3 quarters of the incremental semiconductor bill of material. So this year, nearly 6,000,000 plug in hybrids and battery electric vehicles would be produced. And we estimate that about half of the inverters built into these vehicles are fitted with chips and modules from Infineon. And in the middle of this slide, you can see a very broad range of electrified cars from various OEMs and various regions Being powered by Infinon's chips and Infinon modules for the inverters. And this success can be explained by the advantages as we offer leading edge technology combined with full system solutions addressing all XCV segments. And all these advantages, the broad portfolio, the broad customer base, the silicon carbide in the IGBT portfolio as well as the scalability Places Infineon in the forefront of XEB. And our large IGBT customer base is an essential asset now For the transition from IGBT to silicon carbide. So when OEMs want to expand their IGBT based car models What I want to introduce electrified cars with silicon carbide technologies. We offer an easy, Seamless and cost effective upgrade parts across the entire power range with our Scalable product in packaging technologies and innovations. So for example, existing customers can Offer performance benefits like higher range from new silicon carbide technologies while sticking to the same module form factor. So our customers appreciate these advantages we offer in silicon carbide. We have won several designs over the past couple of years. Most recently, Infinium was awarded by Xiaopeng's next generation silicon carbide based inverter platform. And the value of this business is in the triple digit €1,000,000 range. And this design win is an example of the momentum We have in the silicon carbide technologies and shows that we are very well positioned to benefit strongly From the electrification, of course. And now let me hand over to Peter Wawer to elaborate on the industrial silicon carbide applications. Thanks a lot, Peter. Let's have a look on silicon carbide. As Peter outlined, we are known being the leader in the area of power for silicon based devices. But we are and we want to be also the leader In the area of widebandgappower semiconductors. According to our own numbers and also backed up by analysts' reports, we consider ourselves Already being the leader in silicon carbide based products in the industrial space. What's the reason for it? Various tipping points already have been reached. Beside the fact that silicon carbide based products are much more expensive still compared to silicon, a growing number of industrial applications uses Silicon carbide based products are able to reuse the footprint, the form factor, the size. That Some quite impressive examples. Let's have again a look into PV. If you think about the 100 kilowatt inverter system, such kind of system had a weight Of around 1 tonne only 10 years ago and accordingly high price. Today's with the latest and greatest silicon carbide based products, A 100 kilowatt inverter system weights much less than 100 kilograms so can be carried easily by 1 or 2 strong men. That's very impressive evolution, which brings down overall system costs for the operator. EV charging, another very young application And quite impressive one. If we think about replacing the silicon based products with high end silicon carbide products made by Infineon, we are able to increase the power output from the same footprint by 30%. Very impressive Examples, likewise is true for industrial power supplies, transportation and also for higher end drives where form factor matters. So we, meanwhile, serve more than 3,000 customers with our SiC products either directly or via distribution, So what has evolved, what's happened in the last fiscal year? You see on the left hand side And we think that we are again capable for fiscal 'twenty two to almost double the silicon carbide based revenue, only being limited by supply. So that means, in a nutshell, we are very well on track to achieve the €1,000,000,000 revenue target, set ourselves for the mid-20s, which translates to a market share of roughly 30%. So what's the reason for this tremendous success? It's, of course, many folds, and some good arguments are highlighted On the right hand side, so our key success factors are clearly the leading trench MOSFET technology in the market. That translates to the highest amount of Which fits to customers' individual needs. So our portfolio is very much scalable where we can decide Based on the customer and application requirements to either amend the silicon based solution, for example, inside a module with silicon carbide Diodes are converted completely to the full SiC product. This kind of flexibility is something unique for Infineon. So Scalable portfolio being able to seamlessly integrate based on customer and application requirements comes along with our very, very strong module capabilities on either automotive Made of silicon carbide from Infineon. But of course, we do not stop. We also have a look into gallium nitride. And the recent very positive developments on gallium nitrate will now be shared by my colleague Andreas. Try to be the next big thing in the semiconductor industry, talking about power semiconductors, to drive energy efficiency the chart, you can see the market analyst view. According to those, gallium nitrate is about to meet The tipping point and finally, penetration in the area of power semiconductors overall. But why gallium nitride? Let me explain. So if I draw your attention towards the middle of the picture, let's take the example of a charger for mobile devices. Compared to the next best alternative that you can find in the marketplace to charge your mobile, which is based on silicon solution, Gallium NiFiT offers you the following advantages. Point number 1, you can drive and switch the frequency during a power conversion 10x faster than with standard silicon. Point number 2, as a result of that one, energy efficiency can be increased, so up to Two percentage points relative to the very best that you can find in the marketplace. That is halfening your energy losses while Doing the switching and power conversion. And the other point is, as a function of the first two ones, gallium nitride helps you to make A system smaller, more than onethree in given applications like a charger, and last but least, also up to 3x lighter. So a customer has a choice coming from the middle in This chart, the grayish box, to go left or right, most of the customers are deciding to go on the left hand side, are choosing their way towards sort of Quick charging devices, chargers that go up to 60 watt, a perfect place for Infinium Gallium Nitrates to then also leverage its full power. But the more interesting question is why can Infinon win and why will we win in gallium nitrate? Let me guide you to the 2 aspects, one of which is our unique customer access and broad experience Coming from system understanding throughout each and every of our focus applications, you can see them on the right hand side, plus and also emerging applications. So based on this understanding, we sit on the table with all the major customers and game changing innovators on the planet And talk about a meaningful rollover of Gallium Nitride coming from silicon based solutions into GaN based Solutions as well as research for new innovation fields, which are accretive fields of growth for Infineon in the power semiconductor Space leveraging on Gallium Nitride. The other aspect why Infineon will win are the following 4 elements. Element number 1 is availability of in house gallium nitride technology plus the manufacturing capacity. Many competitors are out there talking about gallium nitrate and their abilities. In house GaN is something which is rather A singularity and not unique, but very much unique towards Infineon. 2nd point is experience in drivers. So Infinon has that. So we are we can combine our driving experience with gallium nitride switches and thus get the best out of a system. 3rd point is the interconnect technology and packaging. Vastly underestimated all the thermos that need to be managed once you have these high Power densities by the use of Gallium Nitride in conjunction with package innovation. And last not least, it takes a lot of IP and the very broad patent Portfolio which Infineon holds, we are very much proud of that IP. And the combination of all four, customers can find Only at the place of Infinon. Let me give you another promising and very interesting example For Infineon, leveraging its innovation power in the area of power semiconductors, Electrical and Energy Efficiency and Decarbonization. That's the field of servers and data centers. Our look at the market shows as follows. In terms of number of servers installed in the marketplace, analysts are talking about 8 percentage points growth. Medium spectacular, I would have said. Much more spectacular is the following view. When you have a deeper analysis, how the structure is changing Within, so to say, server and cloud installations that are happening in the market, then you see that the much more power hungry servers for machine learning but also hyperscalers Are over proportionally growing. And that leads to a reality that the Infinium bill of materials is growing by factor 1 Spot 3 to 1 Spot 4 faster than the average market growth. Perfect place for us to be in and to continue being in. And ultimately, let me talk about why Infineon is already winning and will continue to win In the area of cloud computing and data centers. First, it is a function of Infini's experience in Understanding and being next to all the system defining customers and cloud operators because we are able to today serve All and any semiconductor from the grid to the point of load, talking about ACDC converters, DCDC converters, DCAC conversion in case that's required somewhere. Our customers, the end customers and data center operators love to talk about what's in Based as a function of new silicon technologies and also new materials such as gallium nitrate or silicon carbide to improve the power flow and the entire data center We are having such discussions. And out of that one, Infineon is in a position to derive higher margin And better performing products in order to do what to optimize the power flow in such data centers. And that leads to 2 things. Point number 1 is the energy efficiency is ever improving. So lower electricity and cooling cost So for the operator of a data center, that's a big, big value that we are creating. And the second point is systems are getting smaller through higher power density that we're offering. And based on higher density, data center operators can improve their capacity CapEx, so to say, investments That are needed for 1 and the same amount of data that needs to be handled. Other than this, another few elements why we continue to win, Want to mention, so we are talking as a function of, so to say, understanding the data center as such with the Chipmakers, so those guys who do processors such as Intel, NVIDIA or also AMD, and fine tune semiconductors that match DCDC Converters next to processors and other kind of systems on a server. And apart from that, we are also talking to the ODMs And OEMs, so people who are making server systems, server racks, we help them in the thermos in order to miniaturize server racks, Get better in CapEx for data center operators. And we also work with ODMs in Taiwan, in China predominantly In order to make their systems like AC to DC rectifier smaller, better and less energy hungry and less energy consuming. Now you heard a lot about Infineon and Infineon's role in energy efficiency, decarbonization of the planet And potentials to outgrow the market also in the future. That requires a lot of sophistication then also in manufacturing. Regarding our manufacturing footprint and factory strategy, I kindly ask my COO, Jochen Hannebeck, to come on stage and explain more. Yes. Thank you, Andreas. Indeed, we heard a lot about Growth, a multitude of long lasting structural growth drivers on the demand side. And the question is, of course, how can we follow On the supply side of particular interest in these days. Well, let me talk about first our first pillar, which is 300 millimeter. And we have invented this technology more than 10 years ago. We brought it to volume. We brought it now to the second side back to Fila. And we are now in the position to accelerate in both facts to follow the market demand. In fact, the €2,000,000,000 revenue potential, which filler represents once it's fully equipped, is supplemented With the Dresden capacity and together it represents €5,000,000,000 of yearly revenue potential once It's fully equipped. Now the next step, and we are not going to stop there, is That we combine the 2 fabs in a virtual fab clusters. You may have heard about this concept in many areas, But I tell you, we have driven it really to a high synchronization level, which is a lot of effort, a lot of resources, But then you can reap the benefits, which are increased manufacturing flexibility, Faster time to market for volume, but of course also for innovative products. And last but not least, it allows us To reap the benefits out of the combined economy of scale, and that's why we are ahead of competition in 300 millimeter and will be. Now let's look into the fab, 1 virtual fab with a small movie that illustrates what I've just said. Always impressive still for me every time I watch it. So what's the benefit of 300 millimeters? Well, Of course, it's less CapEx intensive. It is a better capital efficiency, but it also provides us with a better cost position. And you can see here over the next 5 years, if we grow with 50%, we will get our costs On the power and sensor front end part down by 20%. And this is mainly driven by 300 millimeter, also by an excellent Cost position of our 8 inches factory in Kulin and that the European share of 8 inches 6 inches will decrease. Why is the European share decreasing? While we prepare for our next pillar, which is wide bandgap. And with wide bandgap, we are working on this materials, silicon carbide and gallium nitride already for a long time In our facility in Filar, where we have a volume production environment to make it happen. And as we speak, we convert 6 inches to silicon to silicon carbide. And by the way, just to preempt that question, of Of course, we also have 8 inches material at hand. And if availability and once availability, quality and price are in the right range, of Of course, we can also and will convert silicon carbide to 8 inches At the same time, for Andreas business, we are scaling up GaN, Which is in the transition to 8 inches Now you may ask, where does it go next? Well, we have moved the silicon volumes from FILAC to Kulim. So the natural step is now also for wide band gap, silicon carbide and gallium nitride epitaxy. We start In Kulin, as a first step, and you can see on the picture, there's a big plot of land available to for further growth. Another success factor in these wide bandgap technologies or in particular silicon carbide Is the cold split technology, which we acquired through the company SilTektra in 2018. And we are making good progress. The first product is now qualified based on cold split technology. We are ramping up in the pilot line and prepare For volume growth, our supplier LCAs and the framework of bulls and substrates give us the confidence That we have the raw material in place to fuel our growth. The next step with So Tektra is the wafer splitting. So you can see Infineon is also accelerating, is It's electrification and, of course, also the green part. Also for us in our factories, We contribute to our Infineon target to become CO2 neutral by 2,030. We do this by installing the latest Bateman systems and switch from towards green electricity. And for the big picture on our Yes. Sorry, I asked now Constanze Hoefenbeger on stage, who will give you more on this. Constanze, please. Thank Yes. Let me now take a different perspective on what was just presented by my colleagues. We are proud that regarding sustainability and especially regarding CO2 emissions, Infineon is part of the solution. We are constantly working on reducing our own CO2 footprint. We have set ourselves ambitious goals. We are committed to carbon neutrality by 2,030. For 2020, we reported savings 56,000,000 tonnes of CO2 equivalents from our products over their lifetime versus 1,600,000 tonnes in emissions. Infineon is ranking consistently among the top 10% of the most sustainable companies in the world. Also from our customers for our continuous efforts in that area. If we look at resource efficiency and compare ourselves To the global average of our industry, we see that we consume 53% less electricity, 31% less water, And we even generate 66% less waste. And regarding our CO2 emissions, as I said earlier, We have set ourselves ambitious targets. We are committed to become CO2 neutral by calendar year 2,030. This means We will be eliminating all direct emissions as well as all indirect emissions from electricity and heat. That means we will be eliminating Compared to the base year, which is calendar year 2019. We're going to achieve this by Energy efficiency in our factories. Our local energy teams are working hard on this. We will make further essential savings Through the most modern 300 millimeter process technology, the advancement of Industry 4.0 and our abatement efforts, which Jochen just mentioned. Asia and the Americas will follow in due course. And finally, we will compensate the remaining part of our emissions. However, it is As we are growing our business significantly, we need to overcompensate this with our CO2 savings measures. Nevertheless, We are clearly committed to these targets. And since this year's AGM, ESG targets are also part of our board compensation. Our portfolio of products and solutions is strongly geared towards energy efficiency And sustainability. Making more out of less or achieving more by consuming less is the approach Infineon is taking to help developing better solutions for the most pressing problems of our time. Our technologies are key To grow in these markets and thus increasing our contribution to CO2 savings. Sustainability is an integral part of our business model and the basis for our success. Rest assured that we will to play an active role in shaping a worthwhile future. And with that, we are going to summarize this session. And I would like to ask Jochen back on Thank you, Constanze. Yes, to sum it up, the key takeaways. You should remember, we are committed to make this world a greener and better place. And we power ahead in all sort of power semiconductors, be it on widebandgap silicon carbide, gallium nitride And on 300 millimeter silicon, we are the market leader and we will be the market leader. And? Welcome to the 3rd session of our Capital Markets Day, Well, we will focus on the secular and very exciting theme of digitalization. Digitalization is Fundamentally changing the way we work and live, enabling step changes in productivity, safety and comfort, as well as totally new use cases. Digitalization is a poster child example for how Infineon makes life easier, safer and greener Digitalization roadmaps by several years. Digitalization has become ubiquitous at work, At home and in public life. And connecting to what Reinhard said in the first session, It is a tectonic shift in technology. We are entering the IoT era of billions of smart, connected In consumer, industrial and automotive. And excluding well established applications, it is Expected to grow with a CAGR of about 11% for annually shipped units over the next 5 years, and it will grow to 9,000,000,000 devices shipped Annually until calendar year 2026. Infineon is addressing the focus applications here shown in bold Directly with innovative market shaping customers. Through our direct and intimate cooperation, We develop solutions comprising of functional elements that are then building a platform. Based on that platform, we create optimized solutions to serve The full breadth of applications in the IoT space very effectively. For that, we scale our technical support For the large number of solution oriented customers via our digital customer support as well as via our distribution partners. We call this Let's have a look at P2S. As explained in the first session, our P2S strategy is about deeply understanding applications, systems and markets And turning this into superior solutions. These solutions are maximizing the customer value, Supporting them to differentiate along 1 or more of the following aspects: 1, functionality 2, cost performance ratio With Cypress, Infineon is optimally positioned to shape digitalization much like we shaped electrification. With our enhanced portfolio, we are perfectly suited to link the real and the digital world. By substantially extending microcontrollers, Connectivity as well as software and ecosystem, we have complemented our strength in power, sensors and security. We have also enhanced our IoT system understanding, platform based design and system support capabilities And our scalable digital customer support. The acquisition of Cypress is a consequent realization and acceleration Our strategic P2S approach, in particular for the IoT market. Infineon has now become ready to offer easy to use, Easy to integrate IoT solutions. After the acquisition of Cypress, Infineon has leading positions in all disciplines Application specific. In particular for IoT, connectivity is of course key. Compute and especially for IoT, pairing Of microcontrollers with connectivity is crucial as well. And with a fast growing network of connected devices, Integrating security, including our secure memory products becomes critical. Software is the next crucial discipline From BIOS drivers and firmware all the way to reference software, these are important elements to create Winning solutions. And our development platform for ease of use and fast time to market is essential To scale into the breadth of applications in IoT. In addition, our broad sensor portfolio and our power semiconductors are The base for many solutions that we create together. Overall, winning in IoT means mastering all relevant disciplines, And by doing this, it is how we make IoT work. 1.5 years after closing, tangible Progress on synergy generation is being made all in remote PMI. We are following our proven script for the integration. Achieving the revenue synergies that we have announced is on track based on the design wins already achieved. Our significant open design win funnel And prop initiatives that we have started to offer new dedicated P2S solutions for this broad range of focus applications Based on design wins achieved already above that target. And we are on a very good track to reach €850,000,000 of revenue synergies By fiscal year 'twenty five. For that, for the P2S synergies, we are investing strongly into R and D And are strengthening our cross divisional collaboration. These mid- and long term synergies We'll support 9% plus growth per year going forward. More will come in session 4 about those results. But before we get to that, Thomas Rostec will look more deeply into the microcontroller and software elements as well as examples from the industrial IoT market. And the time to market of the device. Infineon has a broad existing microcontroller offering For best application fit, and that's important. Together with other components of our portfolio, We can offer dedicated platform based solutions on a wide range of applications That we already have targeted in the past, as well as new applications where we have now more complete product offerings. In addition to microcontrollers, software together with a broad ecosystem are really important components for our solution oriented customers and are therefore Creating superior customer value and allow Infineon to capture more thereof. So let me just pick a few examples here. So let's start with MODIS Toolbox. MODIS Toolbox is a developer's ecosystem that provides tools The functionality is already available for our customers to easily integrate them into their products. So they can focus on their part of the innovation, on their innovation part of the product to go forward. As an example, we do provide our extensive know how in motor control algorithm packaged Into our Imotion solution offering. So let's have a look on a market in a field of visualization That's developing fast and where we can contribute significantly with our capabilities. It's artificial intelligence. Artificial intelligence and machine learning algorithms play an increasing role across Consumer and industrial applications, as we're going to see. Today, the majority of those algorithms, as you see on the left side, Our trained and execution of the algorithms in the cloud, meaning in central data centers and compute funds. This is easily scalable and it drives actually enormous compute power and storage requirements to be Actually worth mid to high triple digit euro for a single AI training service system. However, Latency, bandwidth and power consumption concerns are key limitations of this approach. Systems that closely interact with humans or with technical processes have response time, so called latency requirements That cannot be met with systems that transmit enormous amount of data to a central data center in the cloud and receives a response from there. Actually, operators say, if you want to have a response in milliseconds, the server farm can only be 100 kilometers away. Think, for example, about expected response times of video or audio streams for user authentication, Voice control devices or real time control tasks in machines. And additionally, Connectivity may not be guaranteed 100% all the time as needed for safety critical operations, if you think, for example, about assisted driving. Here we talk about edge computing or in our case here now edge AI. So sensors with AI capabilities Deliver information into trained neural networks, which are implemented in device based hardware accelerator Like the tiny AI and or in specific AI software IP blocks. With this typically very power optimized implementations can be realized with a fast response time. And this local intelligence might be used for, detect specific types of sounds like human voice commands Or the signal of an emergency car based on high quality silicon microphones or to count people or recognize human gestures On an advanced radar sensor. And additionally, on top of this, robust and reliable connectivity And security are also key requirements that we address with our solutions and competencies. There's a enormous market Enabled by Edge AI. According to ABI Research, the Edge AI Compute Chipset market outpaces the cloud AI chipset market in 2025. Obviously, this is a huge opportunity That plays right into the competencies in the field of smart sensors, embedded control, connectivity, security and smart power. Of a use case that brings several advantages for industrial customers and hence is projected to have a Anomalies before those turn into failures or before it causes producing defective parts It's a significant lever for productivity through reduced downtime, better capacity utilization, and with this, Obviously, lower costs. By bringing the processing close to the machine into the Edge, The advantages of the edge AI that we discussed, like increased response times, low latencies, low power consumptions, Can be leveraged to achieve the real potential of predictive maintenance. And in this context, broad offering enables this use case through a wide range of smart sensors for acoustical, optical, gas or mechanical or Electronic monitoring, the edge AI enabling of our microcontrollers and the ecosystem. Actually, we further develop edge AI IP, Among others in our AI competence center in Dresden to balance performance and power needs, And of course, our products and services, which we enable security and robust connectivity, Which are crucial in the industrial IoT environments for communication of information. We also provide this approach of predictive maintenance, to other applications like smart building, for example. And again, now predictive maintenance is only one of many use cases enabled by edge AI in industrial IoT. The same principle and similar components can also be implemented in other use cases, including image And object recognition, autonomous material handling or human machine interface for end devices among others. Now moving to the consumer side, where there are several applications on which Infineon can play its core competencies that I have Explained before. Take home automation devices as an example. This market covers a wide range of devices For the consumers to manage several devices at home. The market offers a very attractive CAGR of around 20%. Concrete examples, for applications are wireless smart cameras and smart door locks. These are devices where our application understanding and broad offering enable customers to bring innovative solutions To the market. And customer examples include well known leading OEMs as you can see here. Another example in the area of IoT will now be presented by my colleague Andreas Oeschitz. Yes. As said before, a couple of examples that Infinil is proud to present to you with regards to leveraging its capability to cross sell and act as a one stop shop to its customers here in the area of wearables And more concrete, the example of smart watches or smart fitness trackers. Customers are loving to work with us based on our system understanding. I'll give you a simple example, which is the battery lifetime and boundary conditions for battery lifetime when using a smartwatch like this one. Out of that, we are in a position to provide our customers with unique solutions, if you will, in the area of GPS tracking and barometric tracking, once using a smartwatch while doing outdoors activities. We're capable of defining and then also providing the world's Best memory devices that allow superfast and energy saving access to data while having tracking exercises, if you will. And last not least, we have cool capabilities in the area of low power Bluetooth connectivity. So to have these watches or Fitbit kind of trackers always connected with the mobile device And also the controllers that are necessary to then, other than managing all the devices in smart variables, Then also enable the topic of touch interaction based on, so to say, capacitive sensing on the display. People like Suunto, Garmin or then also, as mentioned here, Polar, are customers amongst which We are proliferating further with our offerings. Another interesting area is the smartification of our homes, Well known to each and everybody of us, in particular during the pandemic that was getting a lot of additional momentum. The smartification of the things that are surrounding us at home. Let me give you two examples where Infineon brought offering 1 stop shop And the system understanding based approach plays a major role. That is 1 in the area of TV sets And this big screen OLED TVs were, so to say, design and the form factor plays a major role. TV manufacturers want to make the OLED frame as thin as possible. But there's a problem. These devices require up to 500, 600 watt of power and how to make a power supply so flat that it doesn't disturb the design factor. We have the solution. Our power semiconductors based on gallium nitride and other such materials enable superflat power supplies The power energy efficient, the large screens. The other topic is, somebody does not want to have the screen at home when used As a kind of a picture frame not always on. So you want to use it and have it only on and consume energy in the case of people being present in the room. Therefore, you need very accurate presence detection. You need a presence detector that can differentiate in between a pet, which is a dog or a cat, Or a human being being in the living room in order to then fuel up the power and, so to say, then show the picture in the frame. Our Rada devices are the perfect solution that can do this differentiation, people tracking, presence detection in the most accurate manner and with that safe energy. Another example and application in terms of smartification of your home are the smart vacuum cleaners. Those have a couple of challenges, One of which is driving around in our living rooms. And Reinhard said it, he does not want to have this vacuum cleaner than Somewhere next to his or even driving over his feet. We have a perfect solution for that problem with the broad portfolio of ambient sensors. So we put 3 d time of flight cameras on these robots. We put radar devices on the robots in order to do what? In order to make the robot understand the room condition it's in and take a break when, for instance, a chair or a table or human beings are around, And radar is being used in order to understand the floor conditions. So is it the carpet? Is it the wet floor or whatever it is? A radar can tell the device in order to then also change the cleaning program. That leads to what unique user experience with an ATMOS clean kind of a floor. More about digitalization and Infineon's offering in the area of very intelligent cars to be presented by my colleague Peter Schiffer. Peter, please. Yes. Thank you, Andreas. And let's move from the smart home to the car of the future. The car of the future is clean, safe and smart. And in the electrification session, we covered already the clean aspect of the cars. Here now we talk about how the safe and the smart aspects relates to digitalization. So the car The future is driving digitalization in many aspects. We picked 5 of such aspects here in that slide In the automated driving, the object recognition or the advanced spatial sensing are very good examples for digital Station really enhancing the safety aspects of a car. Or take the example of software over the air. You no longer need to take the car to the garage for a check or for an upgrade. So the connected car can be updated and upgraded on the go. So digitalization Has also changed the infotainment aspects in the car and also the human machine interaction aspects, which come along with it. As car drivers, we expect seamless and cross device digital experience. Basically, we expect the same infotainment as at home in our living room. Digitalization, instrument cluster and the strong also Increase of the comfort and the premium features in the car that are enhanced by digitalization are further examples. So now Infinil has a broad product portfolio to address all these digitalization tasks, starting from digitally lighting, controller and memory products are widely used. So talking about microcontroller. Over the past couple of years, Auryx has become the 1st choice in automotive architecture for high growth and safety critical applications. These microcontrollers are used in powertrain, in safety, in ADAS AD as well in the new area of the domain and the zone control. In this slide, you see the revenue CAGR for ORIX in these categories. And you can see that the ORIX revenue will grow strongly across All these categories in the next 4 to 5 years. The Auryx family of products are key And key components for our product to system strategy, where we offer a full solution combining several product groups to really Timarily address the system from a holistic perspective. And you may also note that ORIX revenue growth is coming from already large segments like powertrain and classical safety. In the bottom of the slide, you see a recent design win. It is a car Scheduled to be produced about in the middle of the decade, and it will have not less than 35 AUDIX MCUs onboard. And this customer, this is a big OEM. It's really shaping its market with this architecture. And how we approach such market Shaping customers will be explained by Helmut Gassel. Thank you, Peter. I think he has shown probably one of the most complex IoT devices out there. But let Let's now dive into our IoT playbook. We want to share with you how we combine the IoT disciplines that all of the colleagues have shown With our customer interaction to make IoT work. In our focus applications, innovative solutions A jointly developed with lead customers in an intimate and deeply integrated process. We call this our IoT Playbook. And to give you an example, a radar solution Originally designed for automotive applications has been transferred to the people presence detection use case Together with a smart home customer and these are now adopted by several other home appliances companies, for instance, an air conditioning company To scale our services and especially our technical support to the significantly larger customer base, we develop In addition, we offer fully digital customer journey to solution oriented customers and developers of emerging applications. With the services provided by our distribution partners and our own technical experts. Constanze will now provide more insight Thank you, Helmut. Customer experience to the next level. We are aiming at reaching more customers and identifying More sales opportunities, providing easy to use tools and relevant and accurate information during our This digital go to market will be a differentiating factor, will boost our revenue growth, Especially in the IoT market and increase our sales and marketing efficiency. Digitalization is also an important lever for our 5 key success sectors. Reinhard Plas has shown And at the same time, increased speed and efficiency of our internal processes. There are basically 3 fields which we are First, we're expanding our offering of digital products and services. That means we are offering more and more embedded software. We provide tools which customers are using to develop their solutions. We offer a rich ecosystem for And development tools from our partners. And moreover, in some cases, we also offer digital services to our customers. We will have a purely digital go to market. But for others, we are targeting a seamless integration of online and offline channels to strengthen our relationships. With this approach, we will ultimately Serve our customers better, deepen the understanding of our customers and their applications and at the same time become much more efficient in Our internal sales and marketing processes. And this actually leads me to the 3rd field, the digitalization of our Internal end to end processes. With increased automation, data driven decision making And by using artificial intelligence at scale, we see a great potential for faster and better decision making For manufacturing, Jochen Hanebeck already presented in our second session a perfect example with our new one virtual fab. In R and D, the major benefit of our digital approaches is a faster time to market. Our engineers Enabled to focus on those areas where we can differentiate in the market with superior quality and better solutions. To sum it up, we are convinced that digital transformation will make Infineon even stronger. And with that, we would like to summarize this session. Helmut, join me on stage. Yes. Let's go through what have we learned, what have we talked about. With Cypress, we accelerated our P2S strategy. We focus on high volume and high growth areas within the core of the IoT space, industrial IoT, smart building, The mostly virtual post merger integration is well on track and the revenue synergies are unfolding as planned. All in all, the digital transformation enhances Infineon's key success factors, enables our long term growth and strengthens our position in the market. And in the now following session, Sven and colleagues will share with us How electrification plus digitalization equals sustainable value and how this translates into our financial performance. Starting with a quick look back into the mirror on our share price development. So we learned that Infineon had a profitable growth journey and is on a profitable growth journey. We learned that Electrification and digitalization gives us a lot of potential for future growth. If you look into the share price, you see clearly That there is a lot of support from you guys in the market. The share price since the COVID trough And also, if you look at a more long term perspective, the share price has developed very well. And we are committed, You hear that again and again, to deliver further value to execute according to our target operating model. Which are supportive of a further margin leverage. And lastly, we will end that So in session 1, we already introduced that concept of an 11,000,000,000 company. That's the preliminary twenty With 30% followed by IPC and CSS. So how will the group look like in 2025 based Following the logic of the 9% growth through the cycle, and we have given you the first revenue growth number already CSS growth is expected to be a bit higher than for IPC. Therefore, the 2 will probably have a same That should not be a surprise. We are talking about digitalization, electrification. So you see here that both drivers Have a pretty equal, importance. So electrification is good for roughly half of the expected growth Again, automotive, biggest in terms of absolute volume, followed by PSS, CSS and IPC. Now two more comments. The first one is because we are always getting that question on revenue synergies. Revenue synergies 2025 is baked into the €16,000,000,000 And of course, it is, as I said, based on today's view Now you've seen the overall holistic picture for the Group. You are probably very much interested in seeing the details. Yes, Infineon is the number 1 in automotive semiconductor market, and we are really the key beneficiary of the electrification And the digitalization, enabling the car of the future and also providing us a revenue CAGR of 10% through the cycle. So XEV and ADAS are very strong secular drivers. Taken both together, they drive roundabout 50% of the ATV growth, and the remaining 50% of the growth is driven by the Classic, the Comfort And the premium applications. They are also benefiting from the further trend into semiconductor content per application. In the next 5 years, XEV is expected to grow around 20%. And in the same time period, ADAS is expected to grow in the high teens. The Classic, the Comfort and the Premium segment, here we have kind of a mixed bag. There is legacy business like a power window Or a central door lock, which is saturated. But there is also a lot of fast growing businesses like metrics lighting, Premium comfort feature, for example, head up display, digital instrument clusters and in cabin infotainment. And taking all these applications together, we expect to grow to high single digit. And if I then include the XEV and the ADAS on top, so the entirety, I'm therefore very confident that we will be able to show at least 10% Yes. Thank you very much, Peter. So IPC, the industrial sector are the number one contributor to this growth. Number 2, as number 2 already in comes transportation. The reason for that is that, of course, The city's mandate of emission free city's mandate drive of electrification on commercial and Construction vehicles on top of the car. And it's also worth to mention that we share also a portion of the content as, for example, onboard charger Inside the car with our colleagues from the ATV division. So number 3, power infrastructure. For charging the cars, we need EV chargers. That's a huge growth opportunity. At the same time, while The renewables drive for more distributed power generation, we need significantly more investment into the power grid. It's not the unidirectional power flow that we used to know from past times, but we have to be able to shift the energy where it's needed From left to right and from right to left. Therefore, power infrastructure added by investments into storage Facilities comes in as number 3. And if I would have said here 5 or 10 years ago, the number 1 would have been automation and drives. So Automation and drives still a significant contributor to our revenue growth because ongoing automation And energy efficiency targets also require refurbishment, additional investments into this important area. Home Appliance comes in at number 4th. Also, motivation is exactly the same. Inverterized home appliance are able to reduce The energy consumption up to 40% compared to noninverterized devices. And of course, also here, Governmental rules and the regulations require more inventorization looking forward. Last but not least, there are the others. That's an unknown where we expect that until 'twenty five, the contribution is not significantly or not very substantial. But we see here also very, very interesting emerging applications as, for example, e Marine. So ships becoming electrified, Especially ferries, first prototypes already running. Then, of course, e aviation, that's, of course, a little bit special application. Let's see How relevant that will be, but another topic which is quite relevant is the topic of hydrogenation. So electrolyzers Achieving the high energy density, which is required, for example, to have CO2 neutral airplane traffic, hydrogenation will boost It will give us another opportunity and boost growth also for the years to come after 2025. Having that said, I would like to hand over To my colleague Andreas from PSS. Yes, to catch up Peter's words, From left to right, from right to left, also PSS is committed to continue outgrow the average growth of its markets And continue outgrowing and also competition holding 9 percentage points CAGR through the cycle. So follow me And what are the main drivers in order to make this happen? As you know, PSS stands for Power Systems and Sensor Systems. So we are the ones that are holding a considerable portfolio of power semiconductors. They are with system solutions for AC to DC, DC to AC and DC to DC systems. On the other hand, we have sensors in our portfolio. What we are trying to do is to emulate the 5 human senses Towards any kind of electrical machines and equipment in order to make human to machine interaction more human centric, more meaningful, more Kind of easy to do that and easy to cooperate going forward. In particular, in the area of sensor systems, we see a significant growth potential the entire PSS, under this basket of human machine interfacing, so we have the world's best silicon microphones. We make machines here. We have the world's most accurate and sensitive eyes with our radar chips. In time of flight, 3 d cameras, we make things see, if you will. We have smart noses with our CO2 and multi gas sensor. And last not least, we have smart field, pressure sensor and temperature sensor. So all in all, 5 senses, which are making the interaction with humans and machines much, much more easier as a big growth opportunity for the going forward, in particular also in combination with software and so to say, compute power that is being served by my colleague, Thomas Oster, who will talk after myself. 2nd point, where PSS continues to outgrow the market is The entire area of data center, I think enough has been said about this. So we benefit from the whole tailwind for the computerization, digitalization using Ever more capacity in data centers, energy efficient and energy efficient devices are the name of the game. So we will continue to grow both in the top line of things And also grow the bottom line of PSS, in particular, in this very segment. 3rd point, betterification of everything. So people are trying to get rid of, cords, if you will, with whatever kind of tools or equipment. Everything is getting betterified and everything which has a battery And which has a DC motor, some are driving, such as 4 wheelers or 2 wheelers or any kind of tools that we are using at home, That requires sophisticated semiconductor power semiconductor solutions, including control from Infineon. That's the 3rd major growth bucket. Power saving solutions in the area of, so to say, the 5 gs telecom cabinets. So space is very much constrained in these telecom A base station's 5 gs being put on 1 and the same entity, if you will, is always suffering space constraints. By using solutions based on gallium nitride silicon carbide, we can make 5 gs fit in existing telecom equipment, and that will drive our growth. The other point that we are coming up with is gallium nitride on silicon for radio frequency power amplifiers. Also, that's a strong growth driver in the area of 5 gs going forward. Last not least, I want to mention the onboard charger that has been mentioned by Peter Schiefer from ATV and also Peter Wawa from the IPC. So what is PSS doing in that, yes. In particular, gallium nitride is the thing that we are bringing into onboard chargers in order to make these devices lighter And as small as possible, so world record form factors, if you will, which is the name of the game of electrifying the car Of the future. So having said that, I want to hand over to my friend and colleague, Thomas Rostec, to talk about the growth engine of Infineon CSS. Thomas. Thank you, Andreas. Through our compute, connectivity and security capabilities, It's affecting CSS quite a bit for two reasons. On the one hand, we are using the divisional sales of our colleagues and their expertise and application to, on the one hand, address the customers. And on the other hand, we also get The know how of the market for the application to build better products that are usable in these different markets. And on the other hand, we are providing them the other divisions with the capability, of using embedded control, of using Connectivity and also software to make more intelligent power or more intelligent sensors as we have discussed. A good example, and we'll start with this industrial segment. We expect the industrial segment to be The main growth driver leveraging especially on our MCU based solutions using Infineon's building blocks that I just mentioned, So sensor control, motor control and power management through which we will be able to gain significantly. Moving into the smart home side, through the increasing implementations of the latest connectivity standards, Meaning the ramp of Wi Fi 6 and Wi Fi 6E as well as Bluetooth Low Energy across the smart home devices MCU and connectivity, so with Bluetooth and Wi Fi. And on the other hand, also our human machine HMI strengths that we have, we are very good positioned to capture inherent growth and opportunities in this field. And also again here, the strong cooperation between the division is one of our success factors. In the smart home market, It is also an important growth area for CSS, especially for our security solutions, driven by The increasing implementation of security technologies like the embedded SIM as well as Better reauthentication. Well, that's moving forward here. In variables, that's something that Andreas has addressed earlier in Session 3. In Variables, our broad portfolio of solutions from low power connectivity Through MCUs and also security. So for example, NFC payments in a given variable. Expected to continue in the years to come. Automotive is the 5th And also to Bluetooth low energy pairing use cases. As well, and that's the 2nd pillar beside connectivity, The implementation of security, which obviously becomes way more important in the automotive field. And it goes from the embedded SIM, so the machine to machine application for communication to the V2X, so vehicle to street, vehicle to vehicle And here we expect the growth contribution momentum continuing. So especially the COVID pandemic Has driven the need for contactless solutions being a payment or being identification. And this Continues, this continue will move on. But there will be also new applications and new technologies. So One of the trends in the card industry is so called biometric cards, where you have a 2 factor authentication already on the card, Which is kind of comparable to the phone payment, which we are doing today. And the identity and the ticketing market that have actually suffered In the pandemic, they are expected to recover. And additionally, and this is now the last section. As Additionally, we will also generate growth from a broader range of applications. So being it computing, being it disposables, Being it gaming, being it other applications and there are lots out there where we are that we are addressing already today from an And we are now able to also address them with an enhanced microcontroller and communication skills. So these are especially on the consumer side, and we're going to enable them with the Core strengths of Infineon with compute, with connectivity and also security solutions. All these attractive markets and you see that below all these attractive markets lead us to a growth potential for CSS of 12% with easy to integrate solutions. And for the summary of the group now, I will hand over to Sven. So you've seen how enthused my colleagues have been and how many different options and possibilities we can explore. I'll try to recap that in a way by focusing, and you are now, in the meantime, familiar with this revenue donut, We're focusing on the key growth applications by division to sum it up before we then come to the profitability Path of the target operating model. So starting with automotive, you see that XCV and ADAS today represent roughly 12 Significant growth opportunities, both together, will represent 15%. So 15% will be good For give or take €2,500,000,000 of revenues in these two growth applications, that's quite a sizable number. On IPC, you heard it. If you think about renewables and transportation, 5% of Infineon will be in these applications. So there is a lot of growth even beyond. PSS, Andreas Usschitz mentioned it, if you look at human machine interface, cloud Data server, if you translate that into the applications, compute smartphone, communications, how we call them, They will represent 21% of the revenue in 2025. That's a pretty significant revenue number Of 3,500,000,000. And lastly, Thomas Rostec explained IoT, industrial IoT, consumer IoT, Both together will probably represent around 6% of the total revenue line, which is another €1,000,000,000 So if you add that up, The automotive growth applications, the industrial, the PSS and the CSS growth applications, These 8, which I was just highlighting, represent roughly half of the €16,000,000,000 in revenue. So a lot is driven by those, but Now moving from the revenue to a more, I call it, resilience perspective for the company, this It's very important for us. Reinhard alluded to it in the beginning. If you look back, and this is again a little bit the Same chart with certain additional information. You see the growth. You see the growth in terms of absolute revenue. You see the growth In terms of profitability, there is a steady upward trend of the segment result margin and resilience is best visible When things become a bit difficult. So we just took 2 data points out where we can illustrate peak to trough. If you compare 2011, 2019 and the peak to trough compression has nearly halved in terms of profitability Which has 2.5x higher equity, which has 2.5x higher segment result and which has 2.5x higher revenue, In a much more resilient company based on the business decisions in the past. Now moving even further into the profitability section. The left chart shows you the old, the former target operating model Did we fulfill what we told you 3 years ago? So you see here in that chart the profitability development from 2017 To 2021, and if you exclude the orange mark COVID block, you can clearly see that, yes, We achieved the 17% through the cycle, and no target operating model on Earth Can forecast and include an unprecedented pandemic. So to take that out, I think is a fair statement. But even including COVID, We came pretty close. So I would say a tick mark on the previous Tom. Now looking ahead, The current target operating model, which we upgraded, where we included a plus in the 9%, Where we increase the profitability and reduce the capital intensity, it's oscillating around the 19%. And please, This is an illustrative graph only. So the graph doesn't mean that it cannot be above 20, 21 or below 17, we just want to show that the new model is through the cycle designed to achieve the 19%. So what are the key levers for this margin expansion from 'seventeen to 'nineteen? You heard it all. I try to recap it here quickly. The first one is the product to system strategy, which has been kicked off years ago Gives you additional profitability. The Cypress revenue synergies, as explained, they add a part. And of course, additional customer value creation, so pricing, is a positive element In the gross margin and in the profitability, and the business mix comes on top. You also heard and will hear About the manufacturing productivity, 300 millimeter. Cypress cost synergies, we can reconfirm the 180,000,000 Also on SG and A, that's what we call SG and E scaling. And therefore, we can also reconfirm what we said When we did the acquisition, the Cypress accretion is coming through nicely in the entire period. So what are limiting factors to the margin expansion? Should also spend a minute on those. One thing is clear. In the current market An inhibitor to the marketing, to the margin expansion. The prefunding of the product to system synergies, We talked about it. So investing today into the revenue of the future, especially in the CSS division, but not only there is a I would have concluded the revenue part and the profitability part. Now we want to see how everything is linked, investment, Sales and value creation and who's best to explain that to you. It's a pleasure to hand over to Jochen again. Thank you, Sven. So we heard our target is €16,000,000,000 of revenue in 25,000,000,000 and the question is, of course, how can Realize this. Well, we reconfirm. We stick to our manufacturing strategy, meaning that for Power and sensors, where it's differentiating technologies, we will invest wisely, smartly In in house manufacturing and in the post COVID re ramp despite The winter storm in Austin, the power outage in Dresden and the COVID related issues in Southeast Asia, I think we have seen the benefits also of this model. Therefore, we will continue. We will also continue with outsourcing. Outsourcing for geometries smaller than 90 nanometers And standard packages in assembly and test. We will modify it slightly. We will spend a low triple digit million amount in 130 nanometers for in house as we see that Certain products are of strategic importance for our system play. And at the other end, we see Not so much of an appetite on the foundry side to invest into this note. Talking about the foundry, this is, of course, what keeps us awake these days. We have seen a big snapback in demand, which Reveals the scarcity of foundry capacity. This has cyclical and structural Elements, a lot is written about it, underinvestment into mature notes, double booking, disruptions, Relations with all the foundries, all the big foundries. And here comes the second element where we have to modify our approach. We are willing To spend some money on prepayments in order to secure strategically important notes. How long does it last? Well, if the solution is based on additional capacity, then Meaningful capacity will only come on stream in 'twenty three and 'twenty four additional capacity. However, if other end markets, In particular, smartphone within the consumer framework is weakening. Of course, the relief will come earlier. Now coming back to our in house and our CapEx to sales model, which I would like To walk you through one more time in detail. So CapEx to sales is obviously the investment we spend Based on our revenue growth, but it's not a fixed number. We have not said that 13% is in all times, Depending on the market cycle, the right number we're going to invest. If the growth is lower than 9%, we will Spend less. And if the growth is higher, like we expect this fiscal year, then we will also spend more than the 13% As you can deduct already from the €2,400,000,000 which Sven mentioned. So in principle, we have a base investment, which is based on our IFRS R and D capitalization, 2 percentage points of revenue growth, Then 5 percentage points, which I call base investment, and you have here some more details on the slide. They do not this number does not include major front end buildings nor office buildings Like in the past, so we take that number outside the model. And here, you can count on about €1,000,000,000 Of clean room for wide bandgap, 300 millimeter and some office building outside this Model over the next 5 years. And then comes on top the what is depicted here with a 6%, which is Capacity in front end and back end. And here, this correlates with the revenue growth. And the major focus topics for This fiscal year is 300 millimeter fillach and drayson as alluded on in the previous session, Capacity for wide band gap for both silicon carbide and gallium nitride, we will also take advantage of the excellent cost position in cooling, grow there further. And as said, some focused investment from in sourcing from silicon foundry, but it's a low triple digit €1,000,000 amount, which makes a lot of sense here from a commercial but also from a strategic point of view. So in total, euros 2,400,000,000 investment for this year and we reconfirm our CapEx To sales model, there's one topic I would like to mention in case we grow a lot more on power side And at the same time, we are limited on the foundry side, which of course give us certain relief On the CapEx to sales ratio, there might be a temporary overshoot. But I think over time, we will get the sufficient supply and therefore, We reconfirm the target operating model with the 9% growth and the 13% CapEx to sales. But again, If there's more growth, there will be more CapEx because we believe in our structural growth drivers. And therefore, it's always Then the next step for the next year, which is secured by the capacity we build on this year. And now I hand back to Sven, who puts it all together again in the overall target operating model. Sven, please. Thank you, Jochen. So putting it all together, Jochen said it, the target operating model stands It's based on the leading position electrification and digitalization. It is based on the synergies. It is based on system solutions. The other part I just want to mention is, when we acquired Cypress, we gave the guidance that we want to achieve the new target operating model within 3 years. It's probably fair to say that we have pulled it in by year, of course, supported by the nice recovery, but on the other hand, Having to face also the COVID situation or the supply constraints we alluded to. Because we have proven that this is a finance policy which works even in the biggest M and A transaction is The financial policy of Invenion was conservative and remains conservative. There are 3 main elements We want to be in investment grade territory. That's why we did also some equity contribution when we did the transaction. And currently, Number 2 is the cash position. We have a target of having always €1,000,000,000 plus at least 10% Of our revenues cash on hand, that would equal to CHF2 billion currently. We have CHF4 billion on hand. And why is that important? It is important not only that we can sleep well, but that we can invest at the right moment in time. We can take the money And invest in a potential downturn for the growth, which is expected to come, not being limited here in any way. And lastly, the gross debt. Our financial policy has a target of having a leverage We are currently at 2.2 times based on the preliminary numbers, so pretty close already. And we are committed So we expect our gross debt to EBITDA target to be achieved already in fiscal 'twenty two again. And as I said, So the last point in this value creation presentation before we come to the closing Maybe with a little exception because we haven't given you the dividend proposal yet. So the pecking order for the capital deployment for Infineon is very Into manufacturing with a very long term perspective. Take the filler example. It was a very good decision in 2018. We mean by taking long term views on organic growth, and that's how we want to fund the attractive growth opportunities you have seen. The next priority is and remains still for quite some time, the deleveraging. We want to continue to reduce debt Until we are sufficiently below the 2x and our midterm target in the rating space It's a BBB flat. They're not that far away, but we are not yet there. Number 3 is M and A. And before I go into the details. I want to state the obvious. No major transaction is planned. But of course, we're looking Strategic fit, it needs to fit to the business. It needs to be financially fit, so creating financial value. And lastly, a cultural fit, not to be underestimated. Many M and A transactions do not go as planned because of a lack of cultural fit. And Cypress is a great example of how important that is and how well it has worked out. And the other element we always have on our agenda is the shareholder return. We have a consistent dividend policy. We have returned 2,700,000,000 over the past decade in dividends. And we are happy to announce today the dividend proposal For fiscal 'twenty one, of course, it is subject to supervisory board approval and final audit of our numbers, but we want to increase The dividend from $0.22 per share to $0.27 per share, which is an increase of 22% To also give part of the growth and the very profitable year 'twenty one back to our shareholders who have supported us very well, We've also supported us very well when we cut the dividend in the COVID year 2020. So To sum it up, you have seen in the previous sessions that Infineon has created sustainable value and will continue to do so. The next decade is well fueled, well powered by electrification and digitalization opportunities. We want to add more than €5,000,000,000 of Annual additional revenues by 25%. Our target operating model is confirmed. It is all based On a very prudent capital structure and a conservative financial policy with a target of being investment grade and the capital deployment priorities I highlighted to you 2nd ago. With that, we would be at the end of our formal sessions. All right. Indeed, we have come to the end of the presentation part of our Capital Markets Day. For the Q and A part, We will have to rearrange the stage here to bring all 9 presenters on. That will take us a couple of minutes. During this time, we ask you to stay tuned in. The picture will get blurry, certainly not Infineon's business picture, But on your screen, so don't worry, it's nothing wrong with your eyesight. We will just reconfigure the stage here. Once again, as a reminder, For questions, please use either the text box on your screen, hit the send button or you can also send us an email. The address is Receiving, I will read them out and ask the fellow presenters here to provide answers in the next The first question that we received from the audience is semiconductors Seem to become ever more important. Do you see for your industry a golden age with less cyclicality and continuous growth Ahead of CTP. Reinhard, can you take that question, please? Yes. Thank you, Alexander. Indeed, Semiconductor are key nearly in everything which we find on our planet, be it a washing machine, be it the smart So anyhow, the computer, the automotive, there's hardly to believe that there will be No semiconductors in these devices. Semiconductor make them smarter in our Customers appreciate the value. They want to have it. Semiconductor also It's enormously important in order to turn the CO2 planet into a CO2 balanced planet. So the answer is pretty obvious. And when we look back to the presentation, I think a lot of examples have been shown. We are very much believing that this ubiquitous demand for semiconductor and everything It will be very helpful to, I would say, fletchning at least to a certain degree the semiconductor cycle And will provide to Infineon a constant growth request or deem necessary. Especially also when you look at what we have Stone is a structural growth element. We had significantly more than we had in 2018. I think The answer is obvious. Thank you very much. Our next question is of a more short term nature. In this environment, how much are you able to raise prices? How much is baked into your fiscal 'twenty two guidance? And how sticky are these effects? Helmut, can you take that question, please? Yes. Thank you very much. First, I think Reinhard already said it. Customers recognize the value of semiconductors And what we have seen is a reversal of the normal price down effect of price down trend. And at the same time, We see ourselves confronted with rising costs from foundries, subcons and material prices. So those go hand in hand. And yes, for our current fiscal year 'twenty two, of the incremental revenue that we have projected that we have shown, clearly more than half of that Is coming from increasing volume, from more products shipped to our customers. And yes, from pricing, there also is a triple digit €1,000,000 effect That is considered in that overall revenue increase. Now regarding stickiness, that very much differs from market to market. Where we have long term or medium term contractual obligations, you can expect those prices to be consistent For at least the full fiscal year. Whereas in other areas, let's say, on the distribution side or in the more commoditized markets, The pricing effects will be less sticky than in the other areas. All right. The next question It's an operations related one and we'll go to Johan Hanebeck. You want to grow annual revenues by at least €5,000,000,000 until 2025. The new filler fab, as you mentioned, has a capacity of around €2,000,000,000 You have around 70% in house share. When will you announce the next fab? Will it be 300 millimeter in Europe or 200 millimeter in Kulin? You mentioned ground ready. Yes. We just opened the 300 millimeter factory in Fylah, and the timing was perfect. So we can serve now The customers with our power semiconductor products. Now, of course, we know lead times for factories, and it's right that It's about 3 years, and we are in the process, as we believe That economy of scale matters a lot for in house manufacturing. You can count on that for power semiconductor, it's Going to be either Filach, Kulim or Dresden and we will announce this in due time. Right. Thank you very much. As the target operating model is always top of mind for our investor, especially the margin part of it, And provided now an outlook of around 20% for the next fiscal year 'twenty two. Shouldn't you put a more ambitious margin target Then 19% into your target operating model, Svein. It is probably a question we have expected. So let me again recap that this is a through the cycle logic. So it means if you want To achieve 19% through the cycle, it clearly means you need to be at 20%, 21% in very good years as well. With you, about €600,000,000 of underutilization cost. Just we should not forget that. That's why we believe We are on a very good path to increase the profitability further. We have pulled it in, as I said, by a year. We are Fully okay with confirming the model. And we have also these special effects, which also Jochen and Helmut have mentioned. On the one hand, you have the price increases and the commodity price increases, which we have to digest. On the other hand, we have Pricing with customers and additional value creation. So I would say once this situation has normalized, If there is anything like a normalization in our world, then we will take a look at the target operating model, And then we will look at upgrading it. But as I said, it's too early, but we will come back to you once the appropriate time is there. Constanze, you have been a new face in this round for many of our investors. So they are keen to know about the digital customer journey. You described it, but what is implemented of that as of today? And where do you see the biggest efforts needed going forward? Yes. Actually, I would say the individual pieces Are already there. However, it is an effort to put all those pieces of the puzzle together And to really get to a seamlessly integrated customer experience. I would say since the closing of the acquisition of Cypress, We have successfully adopted best practices and tools from both opinion and Cypress. And we are now consolidating and integrating everything Into one interface to our customers. And if we have achieved that, I think then we will start to Upgrade our technology platforms and interfaces. And we will also continue to work on the breadth and depth Of our content and really upgrade the content we are providing to our customers. So I would say, to sum it up, you should All right. Another area that we probably anticipated is around wide bandgap, especially silicon carbide. So We grouped a couple of questions and would ask Reinhard as Chief Technology Officer also to take a first crack maybe together with Jochen. Yes. So the questions are if SiC, silicon carbide is actually cannibalizing The IGBT business and the recap of the US1 $1,000,000,000 target that we showed for the mid-20s. How much of that And then there is a supply related question addressing the recent acquisition of GTAT by On Semi. Is it now finally or is it more prudent to be vertically integrated? How about your Yes. Thank you, Alexander. So a lot of questions had been around this. So let's take it From here, 1st of all, looking at silicon carbide, then the Infineon is at a technology step, Which many most of the other companies still have to do. We are in the area of trench technology. Maybe it's a little bit exaggerated, but when you look at it, it is similar to what CMOS has done when you move from planner to the FinFET area. Infineon believes that only technology advancements will give you the cost and performance position required in order to perform. Yes, of course, it took us a certain challenge in order to get there. And the learning is substantial. But we achieved that very successfully. We also are very much believing when we start to deliver to the customer. First of all, the product the customer gets from us, he can rely on. We do not develop on the back of our customer. We can ramp as the customer requires Due to this very innovative technology. But we also believe that we can provide complete solutions whatever it takes. Recently, we talked about an automotive solution, which ranges from IGBT to silicon carbide, depending On the power density you require, same size of the module, different content. We very much Believe and this is an experience we made when we introduced Kulmos. The old technology remained and still grew. We definitely believe that IGBT will have its place. We are very assured that there are further generations of IGBT ahead Currently under development, providing for the individual application outstanding cost Performance. It is about solving a problem. We do not sell technology because it's fun, by the way. It's fun. But When it comes to business, it's different. Where does it fit? And the next and final topic is we We are willing, we are able to cannibalize ourselves. And Jochen, later on, we'll talk about how that fits very well into The manufacturing landscape we have. The next question about where is the growth coming from. We believe that the concept of starting new technologies in a smaller scale and ramping from there And then reuse it or then team up with automotive where the growth is much more fast and requires a highly stable technology base is very Successful. So the $1,000,000,000 target which we are seeing is roughly onethree comes from auto, Two thirds comes from industry. I think here, of course, the growth pattern over the time will change. And beyond that time frame Addressed here, we will see that automotive's growth will significantly accelerate and we are ready to take, While industrial will continue. The next topic is the 200 millimetre question. When will we use 200 millimetre? The challenges for silicon carbide similar to silicon, when you think about power devices is you need thin wafers. Silicon carbide is an even more challenging material than silicon. Then when you go to very thin silicon carbide wafers Then first of all, you have to be able to manufacture this at this very thin layer And put still a lot of process steps on top. And then, of course, there is the other element. We know from all the transitions in the diameter that at the very beginning, the square inch of silicon carbide was more cost In the larger diameter than in the smaller. For us, it was, of course, important to move 150 millimeter Because there, a lot of my equipment was state of the art compared to 100. And we will move on when there is a reasonable Point of competitiveness in the dayometer. The GTAT question is pretty straightforward. We have They set our strategy to use the detector in order to get more out of less. You know that's slow. And we believe that this can be a Very clearly advanced. We have secured our supply for the next years. And we are believing that to a certain degree, yes, Time wise, it may be or will become a captive market, but there will be a general market being developed. But with this, I Want to hand over the question to Jochena regarding the manufacturing in 200 millimeter. Are we ready to move? Absolutely. It's a matter of For the substrates availability, as I outlined in my presentation, we do have 6 inch And 8 inch capability, volume capability, infillar for silicon, we do have it in, coolant. So the manufacturing landscape is prepared. So it's all about the technical aspects, which Reinhard alluded on. And of course, it's All right. A U. S. Analyst is wondering when do you think your own product lead times Might shorten. Helmut, can you take that? Yes, very happy to. Thank you, Alexander. I think this is indirectly a question As to what we expect and how we expect the market behavior to change. And let me give you a few facts about Infineon's Current market and revenue and order picture. Our book to bill for the quarter that has just changed has been very strong, As strong pretty much as we ended the Q3 of our fiscal year. So 4th fiscal year quarter ending book to bill It was comparable to that in the Q3. Our order book is at record high levels, and we don't see cancellations. So all in all, I'd say I have no factual indication for the market to turn. Of course, I think the current situation will not last forever, but there is no visibility of the market changing anytime soon. So My expectation is that the, say, demand being at such high levels will be transporting well into the Supply matches demand more clearly. So as capacity comes online and as you can see with our own investment that we have made, Jochen has been talking about the investment in We see that to be more likely to come earlier on the analog and power side than it does come On the CMOS side, so I would clearly expect this to last quite a time from now. Very well. Thank you. Next one is probably a quick one and going to Sven. German energy prices are rising. What about the impact in your cost base? That's a quick one, but not an easy one, given the dynamic is so high that every number I give you today could be different tomorrow. But based on what I said earlier that we have some long term agreements, some spot transaction, I would say it's a low double digit amount. And perhaps, Sven, you can also take the next one, which is how can we think about the CapEx sales ratio in fiscal 'twenty three, 'twenty four as the 'twenty two ratio is significantly higher than 13% guided I will probably take it together with Jochen, but I think Jochen explained the model very well. The 13% are relevant when you have a growth Of 9%. So again, in a year where we grow mid teens, the number can very well be at 17%, 18%, and you are Still within the model, just to highlight that again. Otherwise, I think it's too early to already mention now, in Early October, a number for 23 as we are already a little bit ahead of time. So please give us here more time to first understand what also Helmut said the market dynamics, the development, and it is in any way linked and dynamic. Bjorn, anything? Okay. Good. Yes. As also to be expected, a number of automotive related questions By a very low percentage in 'twenty one, revised down from plus 8% expected by industry analysts at the middle of August While waiting for others that are needed to finish half built cars. Yes. Actually, I do see 2 things Happening in parallel. On the one hand side, it's true that if the entire supply chain is preparing for a certain Production mix or car production plan to be executed. And then on very late minute, there are some parts missing And the car cannot produce and the OEM is switching from one platform to another platform, then there is some temporary, Let's say, hoarding or buffering of that electronic circuit units. But over that Small temporary activities in terms of making sure that on a daily and weekly basis, the car manufacturing lines are well balanced. There is the Underlying demand supply constraint and the current reduction of the expected car production for this year shows it really that there is much more demand. There's a higher demand compared to what all OEMs together can produce. So despite that What you mentioned in the question hoarding aspects, there's a much higher demand there, and this will be flattening out in the next months to come. Very well. Thank you. As we also covered the IoT in our digitalization session today extensively, Thomas, there's a question going into your direction. Does your IoT solutions portfolio Also cover embedded systems or embedded systems part of your R and D roadmap. That's a good question, actually. Thank you. So what we are providing, and you have seen this circle with the capabilities that we have. So we have all components that you really need For an embedded system to move forward. And depending on the customer demand, we really provide different value creation steps Starting with the sensors going via the MCUs, the connectivity, the security, up to the actuator, so the power devices. So from that perspective, we provide these building blocks and we go beyond the semiconductor If required by the customers, this is where what I mentioned the motors toolbox or development environment plays into. And from that, we provide there the components that customers can really finally use in there. Actually, one thing that we just announced It is the so called Cloud ID. That's actually going even one step further and it's necessary to provide authentication Into the cloud, so you can build in a chip that will help to authenticate your device in the cloud. Right. Thank you very much. Our next question is again a CapEx related one. Can you please describe the use you are going to make of the 2022 CapEx budget, everything else being equal, Meaning not talking about TSMC support, how much additional sales you can extract from this CapEx for 2023? Yes. To give you a little bit of insight into the CapEx budget, so out of the 2,400,000,000, Roughly, €1,900,000,000 is planned. And again, it's preliminary numbers for the operations part, so front end and back end manufacturing. And out of this €1,900,000,000 is planned for capacity and structure invest in front end And about €100,000,000 in terms of buildings, finishing buildings, preparing the next step. So that gives you A bit of a feeling. It's very heavy on capacity expansion. And therefore, we are very well prepared for the Subsequent fiscal year, if you want to have an idea on that, I showed you the graph On the fillach and Dresden capacity ramp up, it's drawn to scale. And there, you can get an idea on the power side, What we can add on and of course, a similar ramp rate can be assumed in Kulim. But overall, we do not give guidance now for the following fiscal year. Please understand. Thank you. This next question is again from an analyst interested in widebandgap, This time specifically GaN. Why hasn't Infineon been more aggressive with offering GaN solutions in broad markets? Is it a matter of timing? And on GaN in particular, can you explain us what is your partnership relationship with Panasonic? Are you licensing then, the naturally off MOSFET design? And is it an exclusive license? Maybe Reinhard, together with Andreas, you're taking this? Yes. I will share it with Andreas. And let me start first on the technology, and Andreas will Jump on the market. Interesting enough, silicon carbide is moving into the market much more quickly than gallium nitride. The obvious difference is that Gallium Nitrites make the difference when you modify the system in total. Silicon carbide is very much, I would say, not completely, but you replace 1 by another device And almost much quicker in adopting it. Gallium Nitride is especially in those areas where you think about Power supplies for service, and Andreas will talk about this, are this systemic integration very capable. So the offering of Gallium Nitride here, we started very early, but the market took much longer because customer has to modify Significantly, now it's taking off. The next question was about how much do we partner with Panasonic. You may remember when we bought International Electrify, one element was the gallium nitride within. Parallel to this, We already had been in discussion with Panasonic. And in order to see how we can accelerate the learning, We believe that our Gallium Nitride technology is, 1st of all, highly performant, much More reliable than anything else in the market. And it requires interestingly a very broad portfolio For lower voltages, middle and high voltages as well completely integrated system. You see, You need a very broad portfolio in order to get it going. There, this license with Panasonic is very Attractive because they were very early in the market, and we learned together. So some of the elements In this current technology belong to us, Sambi has. The license is not exclusive. But again, here maybe Andreas, you talk about, I would say, the way to the market. Yes. So the gallium nitrate market is Still pretty much in its infancy, if you will. So having said that one, so the way how we look at this is as follows. Having learned quite a lot out of then also silicon carbide finding its way towards the market, we put a lot of effort into Choosing partners, partnership customers, innovators, game changing customers in order to then jointly find out sweet bots For gallium nitride and making gallium nitride based solution ready in order to serve with topics such as better energy efficiency, higher power density, add, However, robustness and reliability as applications such as servers or chargers are requiring it. We put a lot of effort into Jointly discussing with customers when is an optimum rollover from silicon based solutions into the new material system. I'm very much convinced that Infinon is ready while we speak. Reliability going forward is one of the names of the games. I think here we are pretty much the leaders. Customers come to us and say, Hey, Infineon Go with us, are you ready? We say, Yes, technology is here. We have the driving circuitry know how. We have the interconnect know how as far as packaging is concerned. We have the IP portfolio. And last not least, we service the entire system with a unique solution combining also our patent portfolio. So Capacity as another factor is also name of the game. Ready to start. And maybe in addition to it and Andreas Already mentioned it briefly. What you see here, especially in gallium nitride, you have to understand the power supply in total. In order to develop the right technology, the right product, and you also have to understand the Solution in the system in order to support the customer to make the changeover. It is not a natural And how we are more successful with this product to system thinking. All right. Thank you very much. From the far end of the group to the near end here, Thomas, another question regarding CSS. How long will it take to bring CSS up To group margin level given current restrictions on capacity and what will be the main contributors? Okay. Thanks for that question. I think we have seen quite some good steps into this direction. And We have seen between Q3 and Q4 of our fiscal quarter due to the Additional capacity that we were able to secure as well as through price measurements, we saw an increase. And this improvement of the gross margin as well as the improved OpEx to sales ratio is bringing us for Q4 into the high teens Already. So and we expect this momentum to move forward also in the next Into the next fiscal year, however, in 2020, let's say, with the publicly announced increases And what Jochen already mentioned on the delivery of the silicon foundries, we see a certain softening, but Clearly, ambition here. All right. Thank you very much. Peter, Peter Barber, the You show the additions as an average number for the next 10 years. What do you expect near term? 22 and 23 in renewables. In your presentation, you've shown huge upside for renewables in case politics go for a net zero scenario. Will the necessary capacities for rotor blades, PD modules, etcetera, be available at all? Yes. Thank you for this question. We believe another very strong, maybe another record year for PV. There is no growth, no reason why the growth Should slow down because simply costs continue to go down for PV installation. On wind, the picture is slightly different because The subsidy scheme, which ended in 2022, leads to decrease in market as we speak, but the mid- to long term Trajectory is completely intact. So also here, we see, we expect in the years to come, continuous growth. Now you asked a question about potential limitations due to the supplier landscape. And of course, we know supplier landscape is affected in all dimensions All right. Thank you very much. Nearing the end of our Q and A session, we have time for a couple of More questions? The next 2 I can see here are automotive related and hence Peter Shifa would go to you. The first one being given EV penetration growth, when do you expect XEV margins to catch up with the ATV divisional level. And similarly, when might ATV margins go towards the corporate level? Yes. I think you all know that we started very early to invest into the electromobility. We basically pioneered That application, that means we invested a lot in the innovation and technology. We invested a lot in the broad product So take, for example, 2020, 17 out of this 25 most sold plug in hybrids and pure electrical cars Are using Infinim products? We have by far the broadest product portfolio. And this is not only in the scalability of the power devices. This includes the drivers, The sensors, the microcontroller. So the entire P2S game, the system game plays in our favor there. And also in the next 2 years, there's roundabout alone in Europe, 35 new models launched with our products in there. So The market is now really taking momentum and you see that with all these regulations that is fueled. So when it comes to margin, so what we Did we do in the last year? We worked on the one hand side on renegotiation of contracts which are not having been in our favor. We worked on cost reduction. We also worked on portfolio optimization and became a very important step towards matching The average automotive margin. So we are well on track with our activities and we have the broadest portfolio and we will leverage that not only in the IGBT, But also in the silicon carbide and in the entire system cell. Terrific. Thank you very much. Leaving the car production numbers aside, what is the content growth opportunity per car until 2025? Maybe a little bit less of important and the increase in the semiconductor content is a bit higher. So as mentioned earlier, you will see that the CV applications are growing by 20%. The ADAS and AD applications will grow. There is a lot of fast growing application in the classical and And comfort applications. On the other hand side, we still have some products which are only linked to the car production and we will not See a lot of growth there. That's why I really feel comfortable that through the cycle, the 10% is a number which we are very Comfortable and convinced about it. Maybe there's a bit of an upside. All right. We have one more question related to the manufacturing strategy. Can you elaborate a bit more On the focused in sourcing and outsourcing, which product families, which divisions are there affected? Where do you see the greatest changes? Is it a one off in fiscal 'twenty two or is it a change through cycle? So the basic manufacturing strategy remains in place. We will invest In house for power semiconductors and sensors, wherever this is differentiating. On the outsourcing side, We will continue to work with our outsourcing partners and the share in terms of outsourcing will even increase. I see 2 differences or 2 modifications. 1 is really this area of 130 nanometers, and that Covers automotive as much as the other divisions, PSS, IPC, where it makes sense to Invest certain amounts in order to get these strategically important products for our system play In house also as the foundries show the least appetite to invest into these areas. Furthermore, we will have to secure long term also with prepayments capacity corridors at the foundry partners In 65, in 40 and in 28 nanometers. So I would call it a modification of the For a while, as the capacity buildup will take time and the majority of the foundry investment Space for one final question. And unsurprisingly, it's about wide bandgap again. You said you have won 4 silicon carbide platforms by now for EVs. To help us get a sense of your success rate, can you Outline how many auto OEMs have now selected silicon carbide suppliers for their EV platforms, Maybe Peter and together with Reinhard. Yes. So first of all, I think it's important to understand that The silicon carbide is coming into the market. So this is a strong growth driver. So IGBT will have It's a place in the market, but silicon carbide is strongly growing. I expect that by 2025, about 30% of the market is converted already in silicon 70% will remain still in IGBT. So it's a huge growth potential and here is very much important. We can leverage our Big customer base, which we established over the last years in IGBT. We basically are talking to each and every OEM on that transition. We support Tier 1s on this transformation from IGBT into silicon carbide. This big Tailable product portfolio is really helping us. So we can really help the customer to have an entire landscape in all their models. And with that, I think it's on us to win further programs like we have won so far. And there is for the time frame 2025 related to regressions, there are still a lot of OEMs which are in discussion to transform. So all these a lot of these programs are not yet sourced. All right. So That concludes now our Q and A session. To the extent we have not been able to answer all your questions, Please feel free to contact the Investor Relations team for any follow ups. It also concludes our CMD. And as you know, the three letters stand for Capital Markets Day. They could also stand for clear messages 1st of all, I want to make some remarks, which will be not shown on the slide. When you think about Infineon, then please look, this team standing in frontier It's making the team the real difference on what we do. We have to collaborate in order to achieve system, in order to think about To reduce the digitalization, how we can refinance it and I think here make a huge difference in the market moving forward. All of this is paying into what we are addressing. First of all, again, And I think you have heard it, seen it, felt it from the team how enthusiastic we are. Electrification, The top topic for that planet, we are a key enabler. We are part of the solution. We To dare to say, are the solutions. Of course, without being able to harness The electrical power, it will go nowhere. Digitalization together with electrification makes the difference. And of course, digitalization also make the difference in order to deliver more, to deliver more value to the customer. And again, Both of it make more out of less. It's a very old slogan, but I like these old slogans still surviving. The next topic is the long term perspective is paying off. I think here what you see, the strategies Which we are talking about had been in its space created many years ago. We are tailoring it. We are developing it further. Some of it is also not existing anymore. So it is a constant change. But again, what we are doing here with the key elements, Enhancing the company by acquisition, introducing new technologies and like we have talked about now, Moving into the digital age as a company, and of course, it's not that we now start. It is about getting the arms around. And even more important, we are a cyclical and structural winner. We address topics Which always has been of importance. But we are ahead of many others. We are ahead of those who thought in bits and pieces, in single products. We think of solutions. We think what else is necessary. The acquisition of Cypress very well fits into this. This is how we think. And it's also interesting. You could, I would say, would like to be part of our discussion where we think about what else is needed. And then we think about when will XEB take off, when will silicon carbide and gallium nitride take off being ready when it comes. And sometimes, yes, we are late And we are able to catch up, especially this topic of P2S. And this, for me, is unbelievable. I can remember when we set up the company in order to be organized along markets, purely automotive, Peter had not to talk to any of the Power supplies, industrial drives, silos. Silos sounds bad. But now we think about complete solution, how the products of Thomas contribute to the products of Andreas. Can you think about a Tough solution without a micro without being connected to the Internet? Hardly. So again, This evolution took some years to get there, but it's in the heart of the company to think. And the interesting part is, Yes, of course, we enable solution. But similarly, we sell products. Maybe sometimes we understand better How an application evolves and then moves on when the time is due to it. So all of these, this P2S As a philosophy is a huge enabler. ESG, to be very honest, For me, when ESG popped up, when we were asked, what are you doing? When do you commit to CO2 reduction? This is obvious. Isn't it obvious that we have to think global in order to reduce But we are committed to enable a CO2 reduction, a 0 CO2 globally since quite Some time, we had working in our manufacturing environments, we didn't take the need in order to think about because we believe To reduce everything which can be done in order to become better on it. So CO2 is playing into our And as it is ESG, many of these topics highlighted there is something which is in the core of the company. What also belongs this topic of diversity into this? We believe that a team, as you see here, as The Infineon team, everybody of us is different. Everybody has a different nature and competence. Together, we are much stronger than a single person. And this belongs to each of us. And finally, for me, All of this, of course, only counts. And here I come to some general comments at the end which matter. Why do we look at such significant growth? First of all, we want to address topics and markets which grow. Think about a company which is on markets which are shrinking. Think of about a company which is not Able to compete because having not the right answer to the market. Therefore, growth matters. But growth is not everything. Profitability matters as much. The team is proud of what we have achieved over the years in matters of Productivity in matters of capital efficiency, but we want to continue our growth path, especially we want to Make use of the unique situation here currently. The invest which we are doing, we have promised our customer, Go to Infineon. We will be able to support you in your growth. And many people come. And many people who left come back. And this is very good feeling. And with this, I hope we could convey how much which we are Convinced about we do, how much this is a mission which we are on. And with this, I want to conclude in the name of my colleagues. I want to say thank you for staying online. Goodbye.

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