N e w s  R e l e a s e / P r e s s e i n f o r m a t i o n

Infineon decides to terminate agreement with Finisar due to delay and uncertain closing

Munich, Germany – January 11, 2005 – The Infineon Management Board today decided to terminate the Amended and Restated Master Sale and Purchase Agreement with Finisar Corporation dated October 11, 2004. Due to circumstances beyond Infineon’s control, specifically delays related to the filing of the Proxy Statement with the US Securities and Exchange Commission, closing could be expected no earlier than end of March 2005. The signing of the first agreement related to the transaction took place on April 29, 2004. In addition, Finisar has informed Infineon, that its Board is likely to withdraw its recommendation to Finisar’s shareholders in favor of the transaction.

The significant delay and high uncertainty of closing are expected to result in deterioration of our Fiber Optics business and in potential harm to our customers. Infineon’s Management Board has therefore decided today to terminate the agreement with Finisar and will assess its legal options to recover the damages incurred by way of an arbitration proceeding in Germany.

In parallel Infineon will begin the necessary restructuring of its Fiber Optics business, while continuing to provide full support to its customers and the Infineon Fiber Optics business.

Under the terms of the agreement as last amended on October 11, Finisar would have issued approximately 110 million shares of Finisar common stock to Infineon valued at approximately US-Dollar 206 million as of yesterday’s close.

About Infineon
Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for the automotive and industrial sectors, for applications in the wired communications markets, secure mobile solutions as well as memory products. With a global

For the Business and Trade Press: INFXX200501.027e