Infineon Supplies Semiconductors for Tesla’s Electric Cars

Nov. 25 (Bloomberg) --Infineon Technologies AG, Europe’s second-largest chipmaker, is supplying power semiconductors for Tesla Motors Inc.’s electric cars, Chief Executive Peter Bauer told reporters last night in Frankfurt.

Tesla has incorporated Infineon’s power semiconductors in its battery-powered Roadster and is also testing them for its Model S, which is scheduled to begin production in 2012, Infineon spokesman Christian Hoenicke said today. He declined to disclose financial terms of the deal. Palo Alto, California- based Tesla is backed by Toyota Motor Corp. and Daimler AG.

Infineon is focusing on its auto, industrial and energy- efficiency businesses after agreeing to sell its wireless unit to Intel Corp. in August. Infineon predicts it will close the deal in the first quarter of 2011. Tesla, maker of the $109,000 electric Roadster sports car, has set a goal of becoming the auto industry’s leader in battery-powered cars.

Holding his iPhone, which uses Infineon’s semiconductors, Bauer said the wireless-chip business is “highly volatile” because it requires significant research and development capacity and investment. It is also closely tied to the fluctuating U.S. dollar, Bauer told a meeting of the International Club of Frankfurt Business Journalists.

Photographer: Guenter Schiffmann

Infineon Technologies AG Chief Executive Officer Peter Bauer. Close

Infineon Technologies AG Chief Executive Officer Peter Bauer.

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Photographer: Guenter Schiffmann

Infineon Technologies AG Chief Executive Officer Peter Bauer.

The auto business is more stable, with longer development cycles, he said. Infineon is currently designing chips for cars coming out in 2015 and beyond, he said. The chips control motors, gas pedals, brakes and lights, among other things.

“That’s where the competition is,” Bauer said.

While the Neubiberg, Germany-based company’s industrial and auto businesses are sensitive to the economy, Infineon’s energy efficiency business isn’t because there is large demand for chips that can reduce energy consumption and costs, he said.

To contact the reporter on this story: Allison Connolly in Frankfurt at aconnolly4@bloomberg.net.

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net. IFX GY <Equity> STM NA <Equity> INTC US <Equity> TXN US <Equity>

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