Obligation Infineon Tech 5% ( XS0168128030 ) en EUR

Société émettrice Infineon Tech
Prix sur le marché 100 %  ⇌ 
Pays  Allemagne
Code ISIN  XS0168128030 ( en EUR )
Coupon 5% par an ( paiement annuel )
Echéance 05/06/2010 - Obligation échue



Prospectus brochure de l'obligation Infineon Technologies XS0168128030 en EUR 5%, échue


Montant Minimal /
Montant de l'émission /
Description détaillée Infineon Technologies est un fabricant allemand de semi-conducteurs spécialisé dans les systèmes de puissance, les capteurs, les contrôleurs et les solutions de sécurité.

L'Obligation émise par Infineon Tech ( Allemagne ) , en EUR, avec le code ISIN XS0168128030, paye un coupon de 5% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 05/06/2010







Infineon Technologies Holding B.V.
(a private limited liability company incorporated under the laws of The Netherlands,
having its corporate domicile in Rotterdam, The Netherlands)
700,000,000
5% Guaranteed Subordinated Convertible Notes due 2010
unconditionally and irrevocably guaranteed by
Infineon Technologies AG
(incorporated with limited liability under the laws of the Federal Republic of Germany,
having its registered seat in Munich, Federal Republic of Germany)
The 5% Guaranteed Subordinated Convertible Notes of Infineon Technologies Holding B.V. ("Infineon B.V."
or the "Issuer") due 2010 (the "Notes") will be issued in denominations of 50,000 each. Each Note will, at the
option of the holders of the Notes (the "Noteholders"), be convertible from and including the 40th day after the
Issue Date (as defined in the Conditions of Issue, the "Conditions"), which is July 15, 2003, up to and including
May 22, 2010, into ordinary registered shares with no par-value (Stückaktien) of Infineon Technologies AG (the
"Shares") at an initial conversion price for each Share of 10.2346. In certain circumstances, a New Company (as
defined in the Conditions) may be substituted for Infineon Technologies AG, the rights of any Noteholder to
receive Shares upon conversion will terminate and will be replaced by the right to receive New Shares (as defined
in the Conditions) upon conversion. See § 7(5) of the Conditions. The Issuer is entitled, upon exercise of the
Conversion Right by a Noteholder, to pay a cash amount in lieu of delivery of all or part of the Shares. See §§ 7, 8
and 10 of the Conditions. The obligations of the Issuer will be unconditionally and irrevocably guaranteed by
Infineon Technologies AG (the "Guarantor"). In certain circumstances, a new guarantor may be substituted for the
Guarantor. See § 14 of the Conditions.
Unless previously redeemed, converted or purchased and cancelled, the Notes will be redeemed by the
Issuer on June 5, 2010, at 100% of their principal amount together with interest accrued thereon. The Issuer may,
at any time after June 5, 2006, redeem Notes outstanding in whole, but not in part, at their principal amount
together with interest accrued thereon, if the price of the Shares exceeds a certain level. See § 4 of the
Conditions. Interest will accrue from June 5, 2003, and will be payable annually in arrears on June 5 of each year,
commencing on June 5, 2004.
Application has been made to list the Notes on the Luxembourg Stock Exchange. The Shares of Infineon
Technologies AG are listed on the Frankfurt Stock Exchange and, in the form of American Depositary Shares
(ADSs) representing the Shares, on the New York Stock Exchange. Any Shares delivered upon conversion of the
Notes will be listed on the Frankfurt Stock Exchange or, in the event of a substitution of Infineon Technologies AG
as issuer of the Shares as set forth in § 7(5) of the Conditions, a stock exchange domiciled in a member state of
the European Union or in Switzerland.
The Notes are initially represented by a temporary global note (the "Temporary Global Note") in bearer form
without interest coupons, which is exchangeable for a permanent global note (the "Permanent Global Note") in
bearer form without interest coupons (each, a "Global Note") upon certification as to non-US beneficial ownership.
At the time the Notes are converted into Shares, Noteholders may be required to provide additional ownership
certifications. Definitive certificates representing individual Notes and interest coupons will not be issued. The
Global Notes will be kept in custody by a common depositary for Euroclear Bank S.A./N.V. as operator of the
Euroclear System ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream" and, together with
Euroclear, the "Clearing System"), until all obligations of the Issuer under the Notes have been satisfied.
Issue Price: 100%
The Notes offered hereby are offered severally by the Underwriters, as specified herein, subject to receipt and
acceptance by them and subject to their right to reject any order in whole or in part. The Notes have been
accepted for clearance through Euroclear and Clearstream. It is expected that delivery of the interests in the
Notes will be made through the facilities of Euroclear and Clearstream, against payment therefor in immediately
available funds, on or about June 5, 2003.
Lead Managers and Joint Bookrunners
Goldman Sachs International Morgan Stanley
Selling Group
ABN AMRO Rothschild Bayerische Landesbank
Banc of America Securities
Commerzbank Securities
HypoVereinsbank
Credit Suisse First Boston
Société Générale
JPMorgan
The date of this Offering Circular is June 2, 2003.


The 5% Guaranteed Subordinated Convertible Notes due 2010, the Guarantee and the
Undertaking (each as defined herein) and the ordinary registered shares with no par-value (the
"Shares") in Infineon Technologies AG into which the Notes are convertible have not been and
will not be registered under the United States Securities Act of 1933, as amended (the
"Securities Act"). The Notes are subject to U.S. tax law requirements. Accordingly, subject to
certain exceptions, the Notes may not be offered, sold or delivered within the United States or
to or for the account or benefit of United States persons. The Notes are in bearer form.
Each of Goldman Sachs International and Morgan Stanley & Co. International Limited (together
"the Underwriters") has agreed that it has only offered and sold and will only offer and sell the Notes in
the Federal Republic of Germany in accordance with the provisions of the German Securities Sales
Prospectus Act (Wertpapier-Verkaufsprospektgesetz) and any other laws applicable in Germany
governing the issue, sale and offering of securities.
The Notes (including rights representing an interest in a Note in global form) may only be offered
or sold anywhere in the world, as part of their initial distribution or as part of any reoffering, and this
Offering Circular may only be distributed and circulated, anywhere in the world, to individuals or legal
entities who or which trade or invest in securities in the conduct of a business or profession (which
includes banks, securities firms, insurance companies, pension funds, investment institutions, central
governments, large international and supranational institutions and other parties, including treasury
departments of commercial enterprises, which are regularly active in the financial markets in a
professional manner). Each of the Underwriters has undertaken to the Issuer and the Guarantor that it
has been and will be made clear upon making any such offers and from any and all disclosure
documents or advertisements in which the offering of the Notes is announced that the offer is
exclusively made to the said individuals or legal entities anywhere in the world.
The Notes are not being offered or sold, and, prior to the expiry of a period of six months from the
Closing Date of the Notes, will not be offered or sold, to any person in the United Kingdom other than
to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted in, and will not result in, an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995 (as amended). This Offering Circular may
only be issued or passed on to a person in the United Kingdom to whom such document may lawfully
be issued or passed on in compliance with all applicable provisions of the Financial Services and
Markets Act 2000 (the "FSMA").
For further description of certain restrictions on the offering and sale of the Notes and on the
distribution of this document see "Subscription and Sale -- Selling Restrictions".
The purpose of this Offering Circular is to give information with regard to the Issuer, the Guarantor
and the Notes. Subject to the qualifications set out below, the Issuer and the Guarantor accept
responsibility for the information contained in this Offering Circular. To the best of the knowledge and
belief of the Issuer and the Guarantor, the information contained in this Offering Circular, for which they
are responsible, is in accordance with the facts and does not omit anything likely to affect the import of
such information.
No person has been authorized to give any information or to make any representations, other than
those contained in this Offering Circular, in connection with the issue and sale of the Notes and, if
given or made, such information or representations must not be relied upon as having been authorized
by the Issuer, the Guarantor or the Underwriters. Neither the delivery of this Offering Circular nor any
allotment or sale made in connection herewith shall, under any circumstances, create any implication
that there has been no change in the affairs of the Issuer or the Guarantor since the date hereof, or
that the information herein is correct as of any time subsequent to the date hereof.
The Underwriters make no representation or warranty, express or implied, as to the accuracy or
completeness of the information contained in this Offering Circular and nothing contained herein is, or
shall be relied upon as, a promise or representation by any Underwriter as to the past or the future.
2


The document does not constitute an offer or an invitation by or on behalf of the Issuer or the
Guarantor or by or on behalf of the Underwriters to subscribe for or purchase any of the Notes and
should not be considered to be a recommendation by the Issuer, the Guarantor or the Underwriters,
collectively or individually, that any recipient of this document should subscribe for or purchase any of
the Notes. Each recipient of this document shall be taken to have made its own investigation and
appraisal of the conditions (financial or otherwise) of the Issuer and the Guarantor.
The Notes may not be offered or sold, directly or indirectly, and neither this document nor any
other offering material may be distributed or published in any jurisdiction, except under circumstances
that will result in compliance with any applicable laws and regulations.
The consolidated financial statements of the Guarantor are prepared on the basis of generally
accepted accounting principles in the United States, the unconsolidated financial statements of the
Guarantor are prepared on the basis of generally accepted accounting principles in Germany and the
financial statements of the Issuer are prepared on the basis of generally accepted accounting
principles in The Netherlands.
All references herein to "Euro" or "" are to the euro, which was introduced on January 1, 1999, as
the legal currency of certain member states of the European Union, including Germany and The
Netherlands.
This Offering Circular contains statements relating to the future that are based on the beliefs of
Infineon Technologies AG's management or Infineon Technologies Holding B.V.'s management, as the
case may be. The words "anticipate", "believe", "estimate", "expect", "intend", "plan" and "project" are
used to identify such future-orientated statements. These statements reflect the Issuer's or the
Guarantor's current views with respect to future events and are subject to risks and uncertainties.
Many factors could cause the actual results to be materially different. These factors include, among
others, changes in general economic and business conditions, changes in currency exchange rates
and interest rates, the introduction of competing products, a lack of acceptance of new products or
services, and changes in business strategy. Actual results may vary materially from those projected
herein. Neither Infineon Technologies AG nor Infineon Technologies Holding B.V. intends or assumes
any obligation to update these forward-looking statements.
IN CONNECTION WITH THIS ISSUE MORGAN STANLEY & CO. INTERNATIONAL LIMITED
MAY EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE
NOTES OR THE SHARES AT A LEVEL HIGHER THAN WHICH MIGHT OTHERWISE PREVAIL
FOR A LIMITED PERIOD AFTER THE ISSUE DATE. HOWEVER, THERE MAY BE NO
OBLIGATION ON MORGAN STANLEY & CO. INTERNATIONAL LIMITED TO DO THIS. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME, AND MUST BE
BROUGHT TO AN END AFTER A LIMITED PERIOD.
3


TABLE OF CONTENTS
Page
Page
Incorporation by Reference . . . . . . . . . . . . . . .
4
Assignment Agreement . . . . . . . . . . . . . . . . . . .
62
Summary of the Conditions of Issue . . . . . .
5
Infineon Technologies Holding B.V. . . . . . . .
64
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Infineon Technologies AG . . . . . . . . . . . . . . . . .
69
Conditions of Issue . . . . . . . . . . . . . . . . . . . . . . . .
18
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
92
Undertaking for Granting Conversion
Description of the Shares . . . . . . . . . . . . . . . . .
97
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
Subscription and Sale . . . . . . . . . . . . . . . . . . . . .
99
Subordinated Guarantee . . . . . . . . . . . . . . . . . .
54
General Information . . . . . . . . . . . . . . . . . . . . . . .
102
Loan Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .
57
INCORPORATION BY REFERENCE
The audited consolidated annual financial statements for the financial years ended September 30,
2001, and 2002, the audited unconsolidated annual financial statements for the financial years ended
September 30, 2001, and 2002, and the unaudited condensed consolidated interim financial
statements as of March 31, 2003, and for the six months ended March 31, 2002, and 2003, of the
Guarantor and the audited annual financial statements for the financial years ended September 30,
2001, and 2002, of the Issuer prepared on an unconsolidated basis are incorporated by reference into
this Offering Circular. Copies of the above-mentioned financial statements and, following their
publication, copies of financial statements for subsequent years may be inspected and are available
free of charge at Dexia Banque Internationale à Luxembourg, 69 route d'Esch, L-2953 Luxembourg, as
long as any Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange
so require. The Issuer does not publish interim financial statements. The consolidated annual and
unaudited condensed consolidated quarterly financial statements of the Guarantor are also available
on its website: www.infineon.com.
The Guarantor transferred its opto-electronics business to Osram GmbH effective March 31, 2003.
Accordingly, the results of operations of the opto-electronics business are presented as a discontinued
operation for the six month period ended March 31, 2003. Pursuant to the provisions of Statement of
Financial Accounting Standards 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
previously issued financial statements presented for comparative purposes, including the condensed
consolidated financial statements for the six month period ended March 31, 2002, as well as the
consolidated financial statements for the years ended September 30, 2001 and 2002, incorporated by
reference as noted above have been reclassified to present the operations of the opto-electronics
business as a discontinued operation for all periods presented.
4


SUMMARY OF THE CONDITIONS OF ISSUE
The following summary is qualified in its entirety by the more detailed information appearing in the
"Conditions of Issue" (the "Conditions") and certain terms used herein are defined in the Conditions.
Denomination of the Notes:
The issue in an aggregate nominal amount of 700,000,000 is
divided into bearer Notes in the nominal amount of 50,000 each,
which rank pari passu among themselves.
Issue Price:
100% of the nominal amount of the Notes.
Maturity Date:
The Issuer shall redeem the Notes at their Principal Amount
together with interest accrued thereon on June 5, 2010, to the
extent that they have not previously been redeemed, converted or
repurchased and cancelled.
Status, Subordination and
The Notes will constitute unsecured and subordinated obligations of
Negative Pledge:
the Issuer ranking pari passu among themselves and at least pari
passu with all other present and future unsecured and subordinated
obligations of the Issuer. The subordination shall be subject to the
condition subsequent (auflösende Bedingung) of the exercise of the
Conversion Right and shall terminate with effect as of the Issue
Date at midnight (24.00 hours) on the day immediately prior to the
Conversion Date. The exercise of the Conversion Right in reliance
on § 194(1) sentence 2 of the German Stock Corporation Act shall
not be affected by such subordination. So long as any Note is
outstanding, the Issuer and the Guarantor undertake not to secure
any subordinated Capital Market Indebtedness upon any of their
respective assets without at the same time providing that the
Noteholders share equally and rateably in such security.
Interest:
The Notes shall bear interest at the rate of 5% per annum on their
principal amount from June 5, 2003. Interest shall be payable
annually in arrears on June 5 of each year, commencing on June 5,
2004.
Substitution of Infineon
If a Restructuring in accordance with § 7(5) of the Conditions
Technologies AG:
occurs then, subject to certain conditions and with effect from the
date of delivery of the New Shares by the New Company to the
shareholders of Infineon Technologies AG, the right of any
Noteholder to receive Shares upon conversion will terminate and
will be replaced by the right of any Noteholder to receive New
Shares upon conversion and the Guarantee (§ 14(1)) shall, in the
sole discretion of the New Company, either be assumed by way of
a liberating debt assumption (befreiende Schuldübernahme) within
the meaning of §§ 414 et seq. German Civil Code or the New
Company shall join in such rights, liabilities and obligations
(Schuldbeitritt) of Infineon Technologies AG under the Guarantee.
Any Noteholder, by its acquisition of any Notes, consents to the
liberating debt assumption (befreiende Schuldübernahme) or
joining in (Schuldbeitritt) of the New Company for the Guarantee.
Any Restructuring resulting in a Substitution or any Substitution
shall not lead to a Dilution Adjustment (§ 12) and shall not be
regarded as a Change of Control (§ 15) and shall not give rise to
the right of any Noteholder to terminate the Notes pursuant to § 16.
See § 7(5) to (12) of the Conditions.
Subordinated Guarantee:
The Guarantor has unconditionally and irrevocably guaranteed on a
subordinated basis (the "Subordinated Guarantee") the due and
punctual payment of any and all sums expressed to be payable
5


under the Conditions by the Issuer. See § 14 of the Conditions.
Under certain circumstances the New Company may be substituted
for Infineon Technologies AG as guarantor. See § 14(1) of the
Conditions.
Substitution of Infineon
The Subordinated Guarantee provides that if a Restructuring in
Technologies AG as
accordance with § 7(5) of the Conditions occurs which leads to a
Guarantor:
Substitution
either
the
New
Company
may
join
Infineon
Technologies AG in the obligations arising from or in connection
with the Subordinated Guarantee (Schuldbeitritt) or Infineon
Technologies AG can be substituted in all respects under the
Subordinated Guarantee by the New Company by way of a
liberating debt assumption (befreiende Schuldübernahme) within
the meaning of §§ 414 et seq. German Civil Code. Any Noteholder,
by its acquisition of any Notes, consents to such liberating debt
assumption or joining in (Schuldbeitritt) and the Principal Paying
Agent (§ 18(1)) is authorized to consent to such liberating debt
assumption or joining in (Schuldbeitritt). See § 7(5) to (12) and § 14
of the Conditions.
Conversion Right:
Subject to adjustments as provided in §§ 12 and 15 of the
Conditions, each Noteholder will have the right to convert (the
"Conversion Right") each Note for 4,885.3888 Shares (the
"Conversion Ratio") on any Business Day during the Conversion
Period by delivering to a Conversion Agent a duly executed
Conversion Notice. See §§ 7 and 8 of the Conditions. Under certain
circumstances the New Company may be substituted for Infineon
Technologies AG as issuer of the Shares and the right of any
Noteholder to receive Shares upon conversion will terminate and
will be replaced by the right to receive New Shares. See § 7(5) to
(12) of the Conditions.
Change of underlying shares
If a Restructuring in accordance with § 7(5) of the Conditions
and substitution of Infineon
occurs then, subject to certain conditions and with effect from the
Technologies AG as issuer of
date of delivery of the New Shares by the New Company to the
the shares:
shareholders of Infineon Technologies AG, upon conversion, any
Noteholder shall be entitled to such number of New Shares per
Note as corresponds to the product of (i) the Conversion Ratio at
the time of the substitution becoming effective and (ii) such number
of New Shares to which a holder of Shares is entitled to with
respect to one Share pursuant to the Restructuring. An additional
conversion adjustment may be made or additional compensation
may be provided if the Restructuring includes consideration other
than New Shares. See § 7(5) to (12) of the Conditions.
Undertaking:
The Guarantor has undertaken (the "Undertaking") to grant each
Noteholder the right to convert the Notes into Shares in accordance
with the Conditions. See § 7 of the Conditions.
Termination of the
If a Restructuring in accordance with § 7(5) of the Conditions
Undertaking, New
occurs then, subject to certain conditions and with effect from the
Undertaking:
date of delivery of the New Shares by the New Company to the
shareholders of Infineon Technologies AG, the Undertaking will
terminate and will be replaced by the New Undertaking under which
the New Company will grant each Noteholder the right to convert
the Notes into New Shares in accordance with § 7. See § 7(5) to
(12) of the Conditions.
6


Conversion Period:
The Conversion Period shall be the period commencing on the 40th
day after June 5, 2003, which is July 15, 2003, until May 22, 2010
(both dates inclusive), or, in the event of early redemption by the
Issuer pursuant to § 4(3) or (4) of the Conditions, until and including
the fifth Business Day prior to the day fixed for such early
redemption.
Conversion Price:
The price at which Shares shall be delivered to Noteholders upon
conversion (the "Conversion Price") shall be 10.2346 per Share,
subject to adjustments as provided in §§ 12 and 15 of the
Conditions. Fractions of Shares shall not be delivered upon
conversion but shall be compensated in cash proportional to the
respective fraction calculated in accordance with 9(2) of the
Conditions.
Adjustment of Conversion
See §§ 12 and 15 of the Conditions. Any Restructuring resulting in
Price:
a Substitution or any Substitution pursuant to § 7(5) shall not lead
to a Dilution Adjustment (§ 12) and shall not be regarded as a
Change of Control (§ 15) and shall not give rise to the right of any
Noteholder to terminate the Notes pursuant to § 16 of the
Conditions.
Cash Payment in lieu of
The Issuer shall be entitled upon the exercise of the Conversion
Delivery of Shares:
Right by a Noteholder to pay to the Noteholder a cash amount (the
"Cash Payment") in lieu of delivery of all or part of the Shares. Such
Cash Payment shall be calculated in accordance with the
provisions of § 10 of the Conditions with respect to the number of
Shares, including fractional Shares, for which the Conversion Right
has been exercised and for which the Issuer has decided to pay
cash.
Early Redemption at the
By giving not less than 20 and not more than 40 days' notice by
Option of the Issuer for
publication in accordance with § 19 of the Conditions, the Issuer
Reasons of Share Price:
may redeem the Notes outstanding in whole, but not in part, at their
Principal Amount, together with interest accrued thereon, if the
XETRA-Quotation of the Shares on 15 trading days (each a "Stock
Exchange Trading Day") on the Frankfurt Stock Exchange during a
period
of
30
consecutive
Stock
Exchange
Trading
Days
commencing on or after June 5, 2006, exceeds 125% of the
Conversion Price.
Early Redemption at the
By giving not less than 20 and not more than 40 days' notice by
Option of the Issuer for
publication in accordance with § 19 of the Conditions, the Issuer
Reasons of Minimal
may redeem the remaining Notes in whole, but not in part, at their
Outstanding Amount:
Principal Amount, together with interest accrued thereon, if at any
time the aggregate principal amount of Notes outstanding falls
below 140,000,000.
Early redemption at the
If the Issuer gives notice that a Change of Control (as defined under
Option of a Noteholder for
§ 15 of the Conditions) has occurred, each Noteholder may, after
reasons of a Change of
giving not less than 20 days' notice to the Principal Paying Agent
Control:
prior to the Control Record Date, require the Issuer to redeem on
the Control Record Date any or all of its Notes at their Principal
Amount, together with interest accrued thereon. See § 15 of the
Conditions. Any Restructuring resulting in a Substitution or any
Substitution pursuant to § 7(5) shall not be regarded as a Change of
Control (§ 15).
7


Taxes:
All amounts payable by the Issuer in respect of the Notes and by
the Guarantor in respect of the Subordinated Guarantee will be
made free and clear of, and without deduction or withholding for or
on account of, any present or future taxes, duties or governmental
charges of any nature whatsoever imposed, levied or collected by
way of deduction or withholding at source by or on behalf of The
Netherlands or the Federal Republic of Germany or by or on behalf
of any political subdivision or authority thereof or therein having
power to tax, unless such deduction or withholding is required by
law. The Conditions do not obligate the Issuer to pay any additional
amounts resulting from the introduction of taxes or duties required
by law to be deducted or withheld from amounts payable as
aforesaid.
Loan Agreement:
The Issuer, pursuant to a loan agreement between the Issuer as
lender and the Guarantor as borrower (the "Loan Agreement"), has
disbursed the proceeds from the sale of the Notes in an amount of
700,000,000 by way of loan to the Guarantor (the "Loan"). The
due dates for payments under the Loan correspond to the due
dates for payments under the Notes; in the event of an early
redemption of the Notes, the Loan is likewise subject to early
repayment. See § 13(1) of the Conditions. The Issuer and Infineon
Technologies AG have agreed that in the event of a Substitution
the New Company may, and if legally required to ensure that upon
a valid exercise of the Conversion Rights of the Noteholders fully
paid New Shares can be delivered shall, assume by way of a
liberating debt assumption (befreiende Schuldübernahme) within
the meaning of §§ 414 et seq. German Civil Code all rights,
liabilities and obligations of Infineon Technologies AG.
Security Assignment:
The Issuer has assigned the claims against the Guarantor for
payment of principal under the Loan Agreement in an amount equal
to the aggregate Appertaining Claims (§ 13(2) of the Conditions) to
JPMorgan Chase Bank, acting on account of the Noteholders, for
purposes of securing the claims for payment of principal of the
Notes. Upon such assignment, a partial amount of the Loan equal
to the Appertaining Claim will be attributable to each Note. In
respect of each Note, such transfer for security purposes will be
subject to the condition subsequent (auflösende Bedingung) of the
redemption of the Notes with Appertaining Claims without exercise
of the Conversion Right or the cash payment in lieu of delivery of
Shares. The Appertaining Claim related to each Note is non-
detachable from the relevant Note. Any transfer of a Note results in
the transfer of the Appertaining Claim without any explicit
declaration of transfer being required. In the event of the exercise
of the Conversion Right by delivering Notes, the Appertaining Claim
shall pass to the Guarantor and expire therewith. See § 13(2) of the
Conditions.
Form of the Notes:
The Notes will initially be represented by the Temporary Global Note
exchangeable for the Permanent Global Note not earlier than 40
days after issue of the Temporary Global Note, each such Global
Note to be deposited with a common depositary for the Clearing
System. Definitive certificates representing individual Notes and
interest coupons shall not be issued. Each Global Note will be kept
in custody by a common depositary for the Clearing System until all
obligations of the Issuer under the Notes have been satisfied.
8


Payments:
Payments of principal of, and interest on, the Notes shall be made
in Euro to the Principal Paying Agent (as defined under § 18 of the
Conditions) for on-payment to the Clearing System.
Paying and Conversion
The Issuer has appointed JPMorgan Chase Bank, London, as
Agents:
principal paying agent (in such capacity, the "Principal Paying
Agent") and as principal conversion agent (in such capacity, the
"Principal Conversion Agent"), J.P. Morgan AG, Frankfurt am Main,
as German paying agent (in such capacity, the "German Paying
Agent") and as German conversion agent (in such capacity, the
"German Conversion Agent") and J.P. Morgan Bank Luxembourg
S.A., Luxembourg, as Luxembourg paying agent (in such capacity,
the "Luxembourg Paying Agent" and, together with the Principal
Paying Agent and the German Paying Agent, the "Paying Agents"
and each a "Paying Agent") and as Luxembourg conversion agent
(in such capacity, the "Luxembourg Conversion Agent" and,
together with the Principal Conversion Agent and the German
Conversion
Agent,
the
"Conversion
Agents"
and
each
a
"Conversion Agent"). The Issuer and the Guarantor may at any time
vary or terminate the appointment of any Paying Agent and/or
Conversion Agent.
Substitution of the Issuer:
The Issuer or the Substitute Issuer shall, without the consent of the
Noteholders, be entitled at any time to substitute for the Issuer the
Guarantor or any direct or indirect subsidiary which is at least 75%-
owned by the Guarantor as principal debtor in respect of all
obligations arising from or in connection with the Notes. See § 17 of
the Conditions.
Notices:
All notices regarding the Notes shall be published in the following
journals: (a) so long as the Notes are listed on the Luxembourg
Stock Exchange and the rules of that exchange so require, in a
leading newspaper having general circulation in Luxembourg
(which is expected to be the Luxemburger Wort), and (b) a leading
daily newspaper printed in the English language and of general
circulation in London (which is expected to be the Financial Times).
Any notice will become effective for all purposes on the third day
following the date of the first such publication.
Language:
The Conditions are written in the German language and provided
with an English language translation. The German version shall be
the only legally binding version. The English translation is for
convenience only.
Governing Law and
The Notes shall be governed by and shall be construed in
Jurisdiction:
accordance with the laws of the Federal Republic of Germany. The
competent courts of Munich (Amtsgericht or Landgericht) shall have
exclusive jurisdiction for all proceedings arising out of or in
connection with the Notes.
Listing:
Application has been made to list the Notes on the Luxembourg
Stock Exchange.
Security Codes:
ISIN Code:
XS0168128030
Common Code:
016812803
9


RISK FACTORS
Unless otherwise indicated: (i) references to "our Company" or "the Company" are to Infineon
Technologies AG; (ii) references to "we", "us", "Infineon Technologies" or "Infineon AG" are to Infineon
Technologies AG and, unless the context otherwise requires, to its subsidiaries and its predecessor,
the former semiconductor group of Siemens, (iii) references to "Siemens" are to Siemens AG, a
German company, and (iv) references to the "Siemens Group" are to Siemens and Siemens'
subsidiaries.
In deciding whether to purchase Notes in this Offering, investors should pay particular attention to
the risks described below as well as to the other information and descriptions of risks contained in this
Offering Circular. The occurrence or existence of the events and circumstances described below could
have a material adverse effect on our business activity, financial position, results of operations and
business prospects. These events or the occurrence or existence of other risks that are currently
unknown or considered insignificant could also have negative consequences for the market price of the
Notes or the Shares.
Risks related to the semiconductor industry
Our business could suffer from periodic downturns
The semiconductor industry is highly cyclical and has suffered significant economic downturns at
various times. These downturns have involved periods of production overcapacity, oversupply, lower
prices and lower revenues.
According to trade association data, worldwide sales of all semiconductor products have fluctuated
significantly over the past several years. Sales increased in 1995, 1997, 1999 and 2000, but decreased
in 1996, 1998 and 2001. In 2001, the decrease was approximately 32%. In 2002, sales increased
slightly by 1%. Throughout 2001, 2002 and in the first quarter 2003 there has been substantial
downward price pressure, although in 2002 and in the first quarter 2003 we have seen increasing
demand in some of our business segments, especially for memory products and for automotive and
industrial products. Our revenues for the six month period ended March 31, 2003 were 2,925 million,
an increase of 28% from the comparative 2002 period.
There can be no assurance that the market will stabilize or improve in the near term or that the
growth rates experienced in the 1999 and 2000 financial years will be attainable again in the coming
years. A prolonged downturn in the industry could result in further substantially reduced volumes of
sales and prices for our products, severely adversely impacting our results of operations.
Industry overcapacity could require us to lower our prices, particularly for memory
products
Both
semiconductor
companies
with
their
own
manufacturing
facilities
and
specialist
semiconductor foundries, which are subcontractors that manufacture semiconductors designed by
others, have added significant capacity in recent years and are expected to continue to do so.
Additions to capacity have in the past sometimes exceeded capacity reductions due to obsolescence,
thereby contributing to increases of supply over demand and to downturns in the industry. Average
per-Mbit selling prices for our memory products declined by approximately 68% in the 1997 financial
year, 65% in the 1998 financial year and 21% in the 1999 financial year before rising by 11% in the
2000 financial year and then decreasing by approximately 70% in the 2001 financial year. This
decrease continued by a rate of 30% in the 2002 financial year. This trend of decreasing prices has
continued during the first six months of the 2003 financial year. Downturns in the industry, including the
current downturn, have severely hurt the profitability of the DRAM industry generally, including our
DRAM business. The current downturn may be prolonged and the volatility of the semiconductor
industry may lead to future downturns, which could have similar effects. Fluctuations in the rate at
which industry capacity is growing relative to the growth rate in demand for semiconductor products
may in the future put pressure on our average selling prices and hurt our results of operations.
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Document Outline