Good morning, everyone. Welcome to the conference call for analysts and investors for Infineon's 2021 Fiscal Fourth Quarter and Full Year Results. Today's call will be hosted by Alexander Foltin, Executive Vice President, Finance, Treasury and Investor Relations of Infineon Technologies. As a reminder, today's call is being recorded. This conference call contains forward-looking statements and/or assessments about the business, financial condition, performance and strategy of the Infineon group. These statements and/or assessments are based on assumptions and management's expectations resting upon current available information and present estimates. They are subject to a multitude of uncertainties and risks, many of which are partially or entirely beyond Infineon's control. Infineon's actual business development, financial condition, performance and strategy may therefore differ materially from what is discussed in this conference call. Beyond disclosure requirements stipulated by law, Infineon does not undertake any obligation to update forward-looking statements. At this time, I'd like to turn the call over to Infineon. Please go ahead.

Thank you very much, operator. And good morning, welcome, ladies and gentlemen, to our 2021 fiscal year-end earnings call. We're a bit more than 1 month past our Capital Markets Day and have the entire management board on this call. Reinhard Ploss, CEO; Helmut Gassel, CMO; Jochen Hanebeck, COO; Hans Constanze Hufenbecher, CDTO; and Sven Schneider, CFO. You are familiar with our usual procedure. Reinhard summary will again come after the Q&A. So please stay tuned until the end of the call. The illustrating slide show, which is synchronized, let me remind you, with a telephone audio signal is available at infineon.com/slides. After the introduction, we will be happy to take your questions. . We have to be extra disciplined today given that our annual press conference is scheduled after the call. A recording of this conference, including the aforementioned slides and a copy of our earnings press release as well as our investor presentation, are also available on our website at infineon.com. Now Reinhard, over to you.

Thank you, Alexander, and good morning, everyone. Our 2021 fiscal year is already in the rearview mirror, and we closed it with a record September quarter. One year ago, we were seeing the first green shoots of economic recovery from the COVID shock. These early indications quickly gathered steam across many markets and geographies, soon leading to a stronger-than-expected economic rebound and an unprecedented global chip shortage. Manufacturing capacities became and continue to be the limiting factor, even more so as natural disaster and regional COVID spikes caused specific disruptions. In this challenging environment, we rapidly switched our operational mode from managing the underutilization to handling severe allocation. And that picture remains valid today. Demand is by far outstripping supply. Near-term indicators tell us that the positive momentum in our key markets is intact, whereas in a few applications with lower relevance for us, we've seen some normalization. Overall, the speed of growth is determined by the speed by which additional capacity is becoming available. For the time being, supply constraints remain persuasive and demand is strong across a large majority of product categories and end markets. Supply is bound to catch up with demand eventually, but we do not see this happening on a broader scale within 2022. Furthermore, at our Capital Markets Day at the beginning of October, we explained how the 2 secular themes of electrification and digitalization drive structural growing semiconductor content in a multitude of end applications. In other words, the general market picture and our business situation continue to look very positive. This is reflected in our recent numbers. The final quarter of our 2021 fiscal year was a record one. We crossed the €3 billion revenue and the 20% segment result margin mark. Precisely, we recorded €3.007 billion of revenue. Comparing to the previous quarter, we grew by 10%. Year-over-year, our revenue expanded by 21%, evidence of the strong market recovery. The COVID-related temporary shutdown of our back-end facility in Melaka, Malaysia led to lost revenue in the area of €100 million in the September quarter, as we had predicted. The facility is up and running again for over 2 months now. Together with the strong growth, our profitability development -- developed favorably. The segment result for our fiscal fourth quarter amounted to €660 million, leading to a segment result margin of 20.5%. This margin expansion was dampened by costs related to the Melaka incident as well as other small supply chain disruptions. The order backdrop remains really supportive, as can be seen from our book-to-bill ratio, which remained at an elevated level of 2.2 for the September quarter after 2.4 at the end of the June quarter, using the same like-for-like definition. As the desire of customers to rebuild inventories from low and very low levels is strong, a certain amount of double-ordering has to be assumed, but this does not diminish an overall exceptional demand. Before going into the divisional overview, let me quickly summarize our annual figures for the 2021 fiscal year. Revenues totaled €11.060 billion, this being the first full year of Cypress inclusion. The segment result came in at €2.072 billion, corresponding to a segment result margin of 18.7%. Our free cash flow amounted to €1.574 billion, also a record level. All in all, these figures clearly demonstrate strong execution in a high growth but also highly challenging market environment. But now to our divisions and their performance in the September quarter. Starting with Automotive. The segment grew revenues by 5% quarter-over-quarter to €1.267 billion despite the negative impact from the Melaka supply disruption. The profitability level improved slightly, with a segment result margin of 16.7% compared to 16.5% in the quarter before. The comparable quarterly book-to-bill ratio upticked to a level of 2.5 from 2.3 before. The majority of our products remain in allocation. The recovery of global car production continues to be strongly hindered by semiconductor and other component shortages as well as various supply chain issues. Capacity constraints and bottleneck worsened in recent months due to shutdowns related to new COVID-19 outbreaks. This has led market researchers to significantly cut their projections of vehicle production. Supply limitations are expected to persist well into 2022 and shortages will only ease gradually. Amid an overall restraint car market development, the adoption of electric vehicles is remaining on a strong trajectory. The share of battery electric and plug-in hybrid vehicles of overall automotive sales has reached new highs in the September quarter. The so-called penetration rate stood at 12.2% in China, 12.7% in Western European countries and 4.1% in the U.S. There, the Biden administration's focus in decarbonization and combined with increased commitment by automakers should drive an accelerating EV inflection going forward. Recent design wins underline Infineon's leading position in a key enabler of electromobility with a best-in-class portfolio of silicon and silicon carbide solutions. Already at our Capital Market Day, we have highlighted a win at Chinese OEM XPeng for silicon carbide-based modules for their inverter. Furthermore, we won a design at a Japanese OEM for an IGBT-based inverter. In each case, these wins are for a triple-digit million lifetime amount. Now to Industrial Power Control, which recorded revenues of €407 million, a slight decline of 1% compared to the quarter before, which had been an all-time high. In Renewable Energies & Power Infrastructure, the record levels from the previous quarters could be almost matched. Transportation business declined, whereas the automation and drives as well as major home appliance saw sequential increases. The segment result contracted to €72 million, corresponding to a segment result margin of 7.7% after 19.9% in the June quarter. Besides lower revenue, cost related to supply disruption had a negative impact. Current demand remains very strong, as can be seen from a comparable book-to-bill figure that went from 1.8 at the end of the June quarter to 2.0 at the end of the September quarter. Many of our product areas continue to be affected by allocation. Looking further ahead, we expect a gradual reversion to long-term average growth rates in the market as COVID relief packages will be phased out over time and pent-up demand gets absorbed. Macro indicators, like manufacturing PMIs, are coming down somewhat, reflecting the toll rising energy and raw material prices are taking on economic recovery. Having said this, we see sustained growth for Power Solutions across the entire chain of generation, transmission, storage and usage of electrical energy for 2022 and beyond. On the one hand, it will take time to fulfill open orders and get back to a stable supply situation. On the other hand, structural drivers are fully intact, especially related to the energy transition in order to meet CO2 reduction targets. This bodes well also for our silicon carbide solution. Strong uptake by customers and well-filled design win pipeline make us confident about continuing our high-growth path, which has led to around €100 million of silicon carbide revenues for industrial applications. Let's now come to Power & Sensor Systems, which had a stellar quarter driven by ongoing strong demand, positive seasonality and incremental better supply situation. The segment revenue in the September quarter shot up by 25% sequentially and came in at €945 million. All product areas, be it power RF or sensor, contributed to this strong increase. From an application perspective, we noted particular strength in power stages for service and the expected seasonal snapback in components for smartphones. In line with a significant revenue increase, the segment result of PSS for the September quarter improved from €167 million to €276 million, equivalent to a record segment result margin of 29.2%. Demand remains very robust across a large majority of application, and we are limited in our ability to serve incoming customer orders. Generally speaking, we see a boom period developing into a phase of a very strong market demand. Like-for-like, our book-to-bill ratio stood at 1.8 at the end of the September quarter after 2.5 at the end of the June quarter. Around half of our products are currently on allocation and inventory sit below normal levels. With a view to the next year, we expect demand in practically all our markets to remain healthy as applications continue to become electrified and digitalized. For data center, we see continued demand from cloud operators and hyperscalers, but also rising enterprise spending, not least due to a post-pandemic return to the office. That same trend should, on the other hand, limit momentum for PC in some consumer areas. On the positive side, the 5G cycle will continue to support smartphone upgrades and drive spending on telecom infrastructure equipment. Regarding the latter, we are happy to announce that we will start shipping gallium nitride on silicon power amplifiers to a leading global infrastructure provider within the current month, creating a new business area for us. Now to Connected Secure Systems, which also saw a strong quarterly revenue increase of 12% quarter-over-quarter to €386 million. Primary drivers were a favorable product and customer mix and a higher value generated from system solutions around microcontrollers, connectivity and security components. The return of our Austin f actory to full capacity also supported the positive development. On the higher revenue, the segment result of CSS increased to €60 million, €6-0 million. The segment result margin improved to 15.5% after 13.6% for the quarter before. The comparable book-to-bill ratio for the September quarter has come down to 2.1 after an exuberant figure of 3.4 for the quarter before. The absolute level, however, clearly shows that it will take quite some time to reach a supply/demand equilibrium. Looking further ahead, we expect the solid demand for our compute, connectivity and security offerings to continue across most targeted applications, increasing requirements for human machine interface, motor control and low-power capabilities to pull the demand for our compute offerings. Our connectivity solutions are benefiting from the increasing penetration of WiFi and Bluetooth technologies across devices. The trend to contactless transactions and the rising importance of data security and anti-counterfeiting drive the need for our security solutions. In this context, Infineon is making substantial progress in becoming a one-stop technology partner for realizing smart, energy-efficient and secure IoT application. A slew of recent innovation is underscoring this. Our low-power PSoC 64 secure microcontrollers have achieved PSA Level 2 security certification. Together with Picovoice, a leader in the field of voice interfaces, we have developed an end-to-end platform to bring voice AI to edge devices. We have introduced software support for the emerging smartphone standard Meta and we have launched a Cloud ID service that simplifies, secure IoT device to cloud authentication. All in all, we are shaping digitalization from the front line. Now over to Sven, who will comment on our key financial figures.

Thank you, Reinhard, and good morning, everyone. In my part, I will focus primarily on quarterly numbers, but in some occasions also comment on full year figures. As usual, let's begin with looking at margin development. Gross profit in the final quarter of our fiscal 2021 year came in at €1.238 billion, resulting in a gross margin exceeding the 40% mark, with precisely 41.2%. Excluding non-segment result effects, the adjusted gross margin improved further to 43.9%. The more than 200 basis points increase compared to the June quarter is due to both a gradual decline in headwinds from specific supply disruptions as well as tailwinds from a very positive market environment. For the full fiscal year, the adjusted gross margin was 41.4%, almost a full 500 basis points up compared to the prior year, driven by an improved business mix, higher value system solutions and a strong decline of underutilization charges, which for the full year came in at around €200 million. Research & development expenses for the September quarter went up to €399 million from €376 million in the previous quarter as we continue to invest into our innovation and revenue synergy road map. Selling, general and administrative expenses increased to €373 million from €342 million. The quarterly increase in SG&A is in part due to a true-up of variable compensation for our very successful fiscal 2021 year. The net other operating income was €12 million. The nonsegment result for the quarter amounted to minus €138 million. Of this amount, €83 million pertain to cost of goods sold, €6 million to R&D expenses and €57 million to SG&A expenses. The other operating income contained €8 million of non-segment result benefits. For the entire past fiscal year, the nonsegment result was minus €602 million, a level we expect also for the current 2022 fiscal year. The financial results for the September quarter was minus €37 million after minus €56 million in the previous quarter. In the fourth quarter of our 2021 fiscal year, we recorded a tax -- income tax benefit of €16 million. As is typical for year-end, the amount is influenced by adjustments to deferred tax assets and liabilities. Therefore, a look at the annual figures is more meaningful. Income tax expense for the entire 2021 fiscal year was €144 million, equivalent to an effective tax rate of 11%. Therein considered our benefits from future tax credits, the revaluation of deferred tax assets and the reduction of tax risk positions. Cash tax amount -- taxes amounted to €180 million, resulting in a cash tax rate adjusted for PPA effect of 10%. For the current fiscal year 2022, we expect the cash tax rate to be around 15%, primarily as a result of tax loss carryforwards. We expect to benefit from tax loss carryforwards for around another 4 to 5 years, during which time the cash tax rate will be lower than the effective tax rate. At the end of that horizon, the cash tax rate should be close to our expected long-term effective tax rate of about 20% to 25%. This, of course, is not considering any future tax law changes. Let's now switch to our investments into property, plant and equipment, other intangible assets and capitalized development costs. As anticipated, we increased those considerably in the September quarter, in effect more than doubling them to €596 million from €285 million in the quarter before. Over the entire past year, our investments amounted to €1.497 billion, around €100 million below our prediction, as lead times on certain equipment are stretched. Reinhard will elaborate on our plans for the 2022 fiscal year, leading to an investment increase of about 50%. Depreciation and amortization, including acquisition-related non-segment result effects were €397 million in Q4, up €380 million in the preceding quarter. In terms of free cash flow from continuing operations, the annual amount hit a record level of €1.574 billion. The September quarter contributed €378 million to this good result amidst an increase in inventories, mainly raw materials and work-in-progress stocks. The strong free cash flow enabled us to take another step on our deleveraging path. In September, we repaid an amount of USD 365 million of bank term debt taken on in connection with the Cypress acquisition, fully redeeming this loan 2 years ahead of its scheduled maturity. The last outstanding element of the original Cypress acquisition financing is now the 2024 term loan of USD 1.1 billion. Considering the repayment, our gross cash at the end of September was in excess of €3.9 billion. Our gross debt amounted to €6.6 billion, leading to a further reduced net debt figure of €2.7 billion. The significant progress in our ongoing deleveraging is mirrored in further improved ratios. Net leverage at the end of September went below 1 to a level of 0.9x, less than half of what it was 1 year ago. Gross leverage improved from 2.6x to 2.2x, bringing us closer to our target level of below 2, which we plan to reach this fiscal year already, more than a year earlier than anticipated at the closing of the Cypress acquisition. Our reported after-tax return on capital employed or ROCE stood at 12.7% for the fourth quarter, the annual figure being 8.4%. Excluding bookings related to the acquisitions of Cypress and International Rectifier, in particular, goodwill, fair value step-ups and amortization as well as deferred tax effects, the adjusted ROCE was around 35% for the quarter and around 27% for the full year. Before handing back to Reinhard again, let me spend a few words on our dividend proposal for the 2021 fiscal year. As already mentioned at our Capital Markets Day, we will propose an amount of €0.27 per share to our upcoming Annual Shareholders Meeting in February, striking a balance between funding attractive organic growth prospects, further deleveraging and shareholder interests. If approved, this will bring the dividend back up to its pre-pandemic level, implying a higher overall payout amount of about €351 million due to the increased share count. We are very grateful for your support, especially throughout the most difficult parts of the coronavirus pandemic and want you to participate in a successful fiscal year line behind us. Now indeed, back to Reinhard, who will comment on our outlook.

Thank you, Sven. Around 3 quarters now, we are speaking about the imbalance between supply and demand caused by the pandemic, cyclical tailwinds and structural factors. In general terms, the stabilization of this boom phase is occurring at present. In the majority of markets, capacities are tight and inventories are lower than healthy. Demand is outstripping supply, but not accelerating further from elevated levels. Stock breaches in some areas are slightly going up by staying conservatively below long-term averages. Of course, dynamics are different in various submarkets. In sum, the supply-demand equilibrium will be reached sooner than in others. For our target applications, however, we do not see this happening in the near future. Supply limitations for automotive, industrial, data centers, IoT and other areas will persist well into 2022. As a consequence, our outlook for the 2022 fiscal year, which we provided already at our Capital Market Day 5 weeks ago, is determined on the supply side that is by the extent by which we can expand capacity both in-house as well as from external manufacturing partners. Against this backdrop, we anticipate revenues for the running first quarter of our 2022 fiscal year to come in at around €3 billion, beating our typical seasonality. Manufacturing constraints related to the temporary Melaka shutdown should fall away, offsetting seasonal declines in areas like smartphone or home appliances. By division, we expect ATV and CSS to reach growth sequentially by a mid- to high single-digit percentage. Whereas IPCs and PSS revenue should decline by a mid- to low single-digit percentage. The segment result margin is expected to be around 21%, slightly above the level of the September quarter, mainly due to a lower burden from supply disruptions. Our outlook is based on an assumed U.S. dollar/euro exchange rate of $1.2. Regarding the currency sensitivity of our numbers, the increased size of Infineon leads to a minor update of our rule of thumb. For every $0.01 movement in the U.S. dollar-euro exchange rate, we now expect a quarterly impact of about €15 million of revenue and €5 million of the segment result compared to the previous one of €14 million and €4 million, respectively. For the full 2022 fiscal year, we had already indicated a growth rate of a mid-teens percentage, clearly above market growth rates predicted by researchers and analysts. Specifically, we anticipate revenues of €12.7 billion, plus or minus €500 million. We expect to benefit from structural growth opportunities and the expansion of our in-house manufacturing capacities. From a divisional perspective, we expect ATV and CSS to exceed the group average growth rate. CSS should grow in line with group average. For IPC, we project growth to a mid- to high single-digit percentage rate. Specifically talking about silicon carbide, we aim to roughly double our business again and achieve close to €300 million of revenue in our 2022 fiscal year, a meaningful step towards our goal of USD 1 billion by the mid-2020s as stated in -- at our Capital Markets Day. On a cautionary note, our outlook is predicated on the absence of larger supply chain disruptions or new bottlenecks. Uncertainties therefore linger, as recent developments are showing, around topics like power cuts in China and the effects on the production of key materials like magnesium, regional spikes of COVID infection or strongly rising energy prices. Our current visibility on how our business is developing is fairly good. But naturally, the range of possible outcomes widen as we look into the later part of 2022. Bearing this in mind, we are confident about our margin trajectories then can firm up the guidance for the segment result margin given at the Capital Markets Day. With the anticipated revenue growth coming in, we expect a level of around 21%. Both cost as well as price increases are expected to kick in throughout the year, but not necessarily at synchronized points in time. Our projected investments in property, plant and equipment, other tangible assets and capitalized development costs in the 2022 fiscal year should grow substantially to around €2.4 billion. In order to capture growth opportunities, key investment project will include the expansion of 300-millimeter silicon capacities that addressed in the Villach sites, expanding our wide-bandgap manufacturing, including the start of ramping certain process steps at our site in Kulim, Malaysia and some selective insourcing of CMOS technology for logic devices from foundries. For depreciation and amortization, we expect a value between €1.6 billion and €1.7 billion, including, again, amortization of around €400 million, resulting from the purchase price allocation for Cypress and, to a lesser extent, still related to International Rectifier. Due to the strong operating performance, we expect a free cash flow of around €1 billion despite the increased invest spending. Overall, we are well set to continue our successful journey into 2022. Let's now come to our -- your questions. At the end of the Q&A, I will summarize the key points.

. And we'll take our first question from Johannes Schaller of Deutsche Bank.

Congratulations on the great results. It looks like that you're obviously raising your margin guidance a little bit for this year, for the fiscal year '22. I mean could you maybe elaborate a little bit how much maybe better pricing plays a role here? Or how much maybe a faster 300-millimeter, very cost-efficient 300-millimeter ramp, plays a role here? And Reinhard, I think you made a comment just now that you don't expect cost increases and price increases to move in a kind of synchronous way. So how should we think about that. Does that mean that price increases will be a bit later than cost increases? I think that would be quite interesting to understand a bit better. And then just as a quick other question. You mentioned a design win for, I think, power amplifiers for gallium nitride on silicon. Can you maybe discuss that a little bit more, into what application that goes down exactly.

Thank you, Mr. Schaller for your questions. We work it from the rear to the front. So I'll start with silicon. This gallium nitride on silicon, that is a high-frequency amplifier for base stations, which has seen a certain conceptual change towards this new MIMO means, multiple in, multiple out architectures. And by this, also moving up in frequency. And here, we are working together with major European mobile phone infrastructure companies. It is a nice success after having phased out the base station business, but always kept our high-frequency capability in the special domain. And as markets are moving into a new technology domain, that fits quite well. So we expect this will also be successful at other customers in that field, and we will continue to drive this technology. The next is the synchronous price and cost. I think it is very clear that we -- the price increases as well as cost increases cannot be 100% synchronized. We see commoditized markets where price increases are taking place as the market development. So here, of course, we do not have very large pocket. Nevertheless, in the MOSFET area, for instance, there is quite some effect. The cost here is, of course, more dependent on how our cost increase is due to the steep increase in manufacturing. Jochen later on, for sure, will comment on this. In all where we have negotiations with customers, I would say you meet several times in life, and our customers are treating us very fair when it comes to market weakness. So we treat them similarly. But we cannot avoid to hand over cost increases from the market. And they have a fully acceptance there. But also these portions, especially increases from foundries, subfunds and materials, cannot be synchronized. And I think everything must be especially towards our customers in a plannable way why we have to accept the price increases as they come from foundries and make sure that we will have additional capacities secured. I'm pretty sure over the further discussion, we will hear more of that from Jochen. And I hand over to the reasons of margins improvement to Sven.

Thanks, Reinhard. Mr. Schaller, Sven Schneider speaking. So your question was why is it now around 21 where it was around 20, 5 weeks ago. I would say, in all honesty, I mean, at Capital Market Day was on the fifth business day of the new fiscal year. We are now 5 weeks into the year. We have the first month behind us. We have a strong quarter 4 behind us. We are seeing, as you can see, also pretty good numbers for this current quarter coming. So I would call us incrementally more confident looking at cost pricing, stability of contracts, mix and structure, which we have seen over the past weeks. That's the basic logic behind the slight adjustment. And I would still say around 21 is not so far away from around 20.

And Mr. Schaller, Jochen will right away comment on manufacturing and foundry situation and the cost development there.

Yes. Mr. Schaller, so in terms of the foundry situation, I think it's well known now, in the mature nodes, 28 to 130 nanometers. The foundries all need to invest. As the existing capacities are more or less depreciated. This leads to a cost increase, and this they pass on to their customers. And in addition, they are asking also to protect their ROI long-term agreements with fee payments. We are handling the situation in that regard, that we do agree on deals, in that range between 28 to 90 nanometers. In 130 nanometers, where there is the least interest of the foundries to invest, we are also taking the option of expanding our in-house manufacturing, which is also one of the positions in the €2.4 billion CapEx budget for this year. Besides the foundry price increases, of course, we also incur major material-related price increases like copper, other raw materials, you name it.

Our next question will come from Sandeep Deshpande of JPMorgan.

Congratulations on good numbers. I have a couple of questions. Firstly, my question is, I mean, it seems clear from your guidance into the fourth quarter that you do seem to be getting some additional foundry capacity given the growth now you're seeing in CSS. So maybe could you help us quantify how much foundry capacity you're getting into 2020 -- FY '22? The second question I have is, again, going back to the margin increase. You've guided the margin up into FY '22 by about 1 percentage point compared to what you guided at the CMD. But it seems to indicate -- but your free cash flow guidance remains the same. So that indicates your conversion is lower. Can we understand why the conversion would be lower given that your CapEx is not increasing or any such change?

Yes. So thank you, Sandeep, for your questions. Jochen will answer it, but only one small comment on it. Please don't forget that we are ramping our own production significantly, which, of course, contributes. But now Jochen, please.

Yes, absolutely, Reinhard. So in the power domain, we are in good shape. We are ramping both factories now. But your question was related to CSS, and this is mainly based on or almost exclusively based on the foundry output. Now I think Reinhard pointed out in the intro that the increase for CSS in the last quarter was related to more output from Austin, the winter storm, which we recovered. But there are also some other portfolio structure topics, which, for sure, Helmut could elaborate on. In general, for this fiscal year, we have secured somewhat more foundry capacity. But it's for sure not anywhere close to what we need. So we expect continuous allocation here in these nodes between 40 to 130 nanometers. So there is an incremental increase in capacity, but not to the extent required.

Maybe Helmut, make the add-on and then we hand over to Sven.

Yes. Just one consideration is that we are increasing our share of the so-called solution business, which also consisted of software contribution to the total price of the product. It's not a big effect, but a smaller effect of the total increase. As Jochen mentioned, the Austin effect is bigger in this number. And now over to Sven.

Yes, Sandeep, thanks for the question. I mean, mathematically, you're right. But I would say this 1% doesn't really change the needle on around €8 billion. That's the general comment. On the other hand, also looking at some of the markets, as Reinhard said in the introductory remark, and some potential that the demand and supply imbalance could get better over the course of the year, there is at least some hope, I would say, for all market participants that some customers can build also up inventories. That's also something we should not totally lose out of sight when we guide for free cash flow.

Our next question will come from Didier Scemama of Bank of America.

My first question is on pricing. And if you could give us a sense of what benefits you get in top line, in your fiscal year '22 revenue growth assumption from pricing and mix, that would be helpful. And I think a longer-term question. Just trying to understand your point of view from the comments made by the CEO of one of your key competitors in the U.S. recently and he said, his mission is to reduce the price to value discrepancy, probably referring to power semi historically considered to be commodity products with low gross margins. You're also talking about more structural gross margin improvement. But just wondered if you could give us a sense as to your position on that point of view. And effectively, how confident are you of the sustainability and further potential increase in gross margins as you are the market leader in power semis with the most advanced manufacturing capacity.

Thank you, Didier. So very brief, of course, we cannot comment a lot on competitors. But very clearly, we see a very good progress in order to improve our margins in the power domain as this topic of system solutions is really adding on all components and providing a better value position at the customer. So we believe that or we are very confident that it's not a current situation of pricing only, but all the base is really improving quite a bit. We will see this over the coming quarters and can talk about that more when the integration and the cross-selling with Cypress moves on. But with this to Helmut, pricing and value base.

Yes, Didier. Customers, I think, recognize value of semiconductors more and more. That's, I think, the underlying message. And this is a -- it's a good one. But of course, especially in times of shortage, delivery capability also has its value. So we clearly see that as well. So all in all, there is a reversal of the normal price down trend right now. At the same time, we see ourselves confronted, too, as Reinhard mentioned, with the rising input cost. For the current fiscal year, we see more than half of the revenue growth to come from increasing volume and improved structure, meaning higher revenue per wafer. But there is also a triple-digit million euro effect that is in there from pricing in the overall revenue increase. The stickiness of that price increase differs substantially from market to market. Where we do have long-term or medium-term obligations, there we can expect it to be consistent for at least the full fiscal year. In other areas, for instance, like distribution or more commoditized markets, pricing effects will be less sticky than in these previously mentioned areas.

Yes. But a final comment, we are very sure that the industry overall has recognized the relevance of semis, and the valuation of semis will continue to go up. I think this growth, structurally growing importance, is what we believe will continue quite a while.

Yes. And Didier, maybe I take the gross margin question. I think you heard already a lot from my colleagues. I mean it is really linked to the structurally growing importance of semis and product-to-system approach. If this is confirmed, and we believe in it, then it should be possible to further increase. Software has been mentioned prior as well. But we should also now not guide to another KPI. As you know, for this year, I would say we have -- for the last year, we have done a significant step upwards in gross margin. And of course, we want to keep going.

Excellent. Maybe one quick follow-up, if I may. Just on silicon carbide, so we now have STMicro expecting $1 billion in silicon carbide revenues by 2024. I think ON Semi talked about a run rate of $1 billion exiting 2023. You guys talking about $1 billion mid-2020. Are you concerned a little bit that you are now slightly lagging your 2 main competitors? Or do you think that, that number can be also or considered conservative, especially in the light of the recent wins?

Didier, we, Infineon, are always a little bit more, I would say, conservative on this. And we believe in leading technology, which we definitely believe being the second-generation of French in silicon carbide. We are very much ahead in that way, quality-wise, too. And we believe in that this will make its role pretty well. So let's wait and see for the next years. And just expecting or naming some high yearly revenue numbers does not really point out where the strengths are.

We will take our next question from Francois-Xavier Bouvignies of UBS. Francois-Xavier Bouvignies: So the first question is a follow-up up on the silicon carbide and gallium nitride. So you are seeing in your release that you are expanding the manufacturing for these 2 technologies and with your target of $1 billion at mid-20s, like Didier just mentioned. Can we talk about the supply or the capacity that you have in SIC and GaN today and what your plan is in '22 to be just on the capacity side for these 2 would be helpful. And if you can comment on '23 as well would be even better. And a follow-up. The second question is the book-to-bill. So it declined a little bit, and it's nothing, I guess, to worry about. But I was just wondering what led to this kind of a decline. And more importantly, do you expect this book-to-bill to decline from now and the next few quarters as a normal normalization?

Okay. Thank you, Francois. Helmut will start with the book-to-bill and, then Jochen will come to silicon carbide and gallium nitride.

Yes, you're right, the book-to-bill figure has come down from 2.4 to 2.2. Both of those figures are far away from us being able to supply, obviously. And if you look into the structure, the major change was in CSS, where it came down from 3.4 to 2.1. So the 3.4, I think, was a strong reaction on the shortage in the market, with quite a bit of additional ordering. Now all in all, as stated by Reinhard, we do see a normalization of bookings in some areas. So if that continues, then we can expect this book-to-bill ratio also to normalize. And normalized would be something between 1 and 1.2. So we are still far away from that.

Yes. With respect to the question on silicon carbide and gallium nitride, I think we guide here with the revenue number which we gave you on the Capital Markets Day. And of course, we build up the capacity accordingly. And that is happening, as we speak, in Villach today, 150 millimeters for silicon carbide. Of course, we're also looking at 200-millimeter. And in GaN, we are even further into the transition towards 200 millimeter. Of course, as you rightly say, there are a lot of components required to build up these capacities, substrates, AP and so on. Here, we have multiple sources with our combining them with our cold split technology from Siltectra, gallium nitride also ramping, which is easier as it's built on silicon wafers. And in general, we do the first steps, as we also showed you at the Capital Markets Day, towards the second site, being Kulim here. We have space in the existing buildings, where we start with the epitaxy steps for both wide-bandgap technologies. Francois-Xavier Bouvignies: Okay. And when you say that you are building in line with your targets of €1 billion, I mean do you have any room for further upside on the capacity side compared to what you think you're going to deliver on revenues? I mean, because you say that you're conservative. So I guess you are building a bit more capacity that what you think you're going to get?

So we have a lot of ways to maneuver here, and I think this will be, I would say, created as we move forward. So we are very confident that we can manage it. I think here, we anticipate the growth to a certain degree in capacity. And I'm pretty sure we can make the €1 billion within this decade, we added in the middle of this decade, a reality.

Our last question will come from Dominik Olszewski of Morgan Stanley.

Firstly, on the CapEx side. Is the €2.4 billion guidance constrained by your equipment slots availability? And would you be spending more if you didn't have risk constraints, because you flagged that there was a constraint in Q4? And then the second question is a bit longer term. In areas where you have had these product constraints related to foundry, are you seeing more localization competition emerging to service the longer tail of customers? And particularly, I'm thinking about domestic China for products like multicontrollers connectivity, et cetera.

Thank you, Dominik for the question. I ask Jochen regarding the invest. I believe, the €2.4 billion majority is ordered and so on. Jochen.

Yes, we do face for the front-end equipment lead times in the range of 12, 15 months in average, with exceptions of lower and longer lead times. So here, the number is basically related to front end. Of course, also to buildings in the books, where we have a little bit more room to maneuver still on the back-end equipment. But even here, lead times are long in terms of historic comparison.

So the foundry market, how it is localizing, I think here, we still see that the foundry market is pretty much a global market. Some countries, we have seen some geopolitical effects being -- becoming effective there. But from the time being, we assume still that foundry capacities will only slightly be affected there. And the need for localization of production, this is something where we, in general, have a manufacturing strategy with -- Jochen can go in more detail, which is not considering, I would say, tactical moves, but more a strategic general approach as we have been investing in our own but also how we collaborate with a large foundry and subcon people, some comments from you, Jochen, on that? No all fine, I think here. That is what we do and we will continue to do. And of course, resilience in our supply chain is a key topic which we have been following since years. With this, I come to the end and want to summarize. Infineon concluded a very strong 2021 fiscal year with a record September quarter. €3 billion of revenue with a 20.5% segment result margin pushed the annual figures to €11 billion of revenue with 18.7% of segment result margin and €1.5 billion of free cash flow. Semiconductors are becoming ever more strategic and product defining. At our Capital Markets Day, we explained how Infineon is ideally positioned to shape and benefit from the 2 secular themes of our times: electrification and digitalization. In our target application areas, the cyclical readings continue to be strong and structural growth drivers are fully intact. Supplies generally insufficient to meet demand. Many products are on allocation in inventories are low. Against this background, we expect a strong 2022 fiscal year with revenues of around €12.7 billion, a segment result margin of around 21% and around €1 billion of free cash flow. Not denying uncertainties, we are confident in our ability to execute. Ladies and gentlemen, this concludes our earnings call. Thank you for dialing in and for your questions. Stay safe and healthy over year-end.

Thank you very much. All this indeed wraps up our call. We realized that we have today not been able to field all questions. There is a certain tail of them. We hope throughout the day, from the IR team side, to be able to answer those. Wishing you a safe, healthy and enjoyable day ahead. Bye-bye.

That concludes today's conference call. Thank you, everyone, for joining us. You may now disconnect.