Thank you, operator. Good morning, and welcome, ladies and gentlemen, to our 2019 Fiscal Year-end Earnings Call. Here present is the entire management board of Infineon: Reinhard Ploss, CEO, Helmut Gassel, CMO; Jochen Hanebeck, COO; and Sven Schneider, CFO. Following our usual procedure, Reinhard will start with some remarks on group and divisional results, market developments and business highlights. Sven will then comment on key financials, followed by Reinhard again updating you on our guidance for the 2020 fiscal year and its first quarter. We will illustrate our introductory remarks, which, by the way, we have made available online this morning with some slides that are being shown live and in sync with the call at infineon.com/slides. After the introduction, we will be happy to take your questions. [Operator Instructions] Today, we need to keep a strict time limit. A recording of this conference call including the aforementioned slides and a copy of our 2019 fiscal fourth quarter and fiscal year earnings press release as well as our investor presentation are also available on our website at infineon.com. Now Reinhard, please go ahead.

Thank you, Alexander, and good morning, everyone. We have concluded our 2019 fiscal year in which end markets were characterized by a challenging macro backdrop. In terms of growth and profitability, fiscal year '19 clearly stands behind the prior boom years, but equally clearly it proves the resilience of our business in the semiconductor down cycle. Our fourth fiscal quarter came in much as we had expected. Revenues stood at €2.062 billion corresponding to an increase of 2% quarter-over-quarter. Tailwind from the U.S. dollar, which traded up by about 1%, was very slight. Year-over-year, our revenues grew by 1% in euro terms. Here, the U.S. dollar impact is more pronounced. At a constant exchange rate, revenues declined by 2%. The segment result for the September quarter amounted to €311 million, equivalent to a segment result margin of 15.1%, a bit ahead of our guidance. For the full 2019 fiscal year, our group revenues for the first time crossed the €8 billion mark with €8.029 billion, a 6% increase over the previous year. Assuming a constant U.S. dollar exchange rate, our annual growth rate would have been 3%, evidence of the significant cyclical pressure that hit us particularly in the second half of our fiscal year. The segment result for 2019 was spun €1.319 billion, yielding a 16.4% segment result margin. On the one hand, this is a quite robust figure considering the slowdown in many of our end markets. On the other hand, profitability has been going down sequentially as underutilization charges weighed on our margins. Sven will cast more light on this issue when he talks about our financials, and I will also come back to this topic when I discuss our outlook. As in previous years, we want our shareholders to participate adequately in Infineon's economic results. Therefore, we will propose an unchanged per-share dividend of €0.27 to the next shareholders meeting. Given the higher share count compared to last year, this will result in an increase of the total dividend amount by about 10% to €336 million. The demand picture across many markets has not written in recent weeks and months, especially not in the automotive and industrial verticals, which are most relevant to our business. That we are not out of the woods yet can also be seen from our book-to-bill ratio of 0.8% for the September quarter. From indicators like lead times, inventory levels and order patterns, we can read out that the cycle is bottoming. The eventual recovery, however, is expected to set in not prior to the second half of our 2020 fiscal year as major global economies remain in contraction and trade tensions continue to loom. I will comment more on this at the end of my introduction when I will all give you a short update on our planned acquisition of Cypress. But back to the concluded fiscal year 2019 and the divisional overview, starting with Automotive. In the September quarter, Automotive revenues were €893 million, a sequential increase of 1%. Compared to quarter 4 of last year, the increase was 3%, and respectively, 1% assuming a constant U.S. dollar exchange rate. As can be seen from this figure, the growth dynamic has currently slowed down. Classic automotive applications continue to be in decline. Following subsidies cuts, the Chinese electric vehicle market has hit the brakes last quarter. Against this, ADAS components witness ongoing positive momentum. The segment result of ATV amounted to €78 million, resulting in a segment result margin of 8.7% compared to €98 million and 11% in the quarter before. The main reason for the margin decline is the increasing burden of underutilization charges. Given that the inventory correction throughout the supply chain is ongoing, we keep production facilities running at lower volumes. The book-to-bill ratio for the September quarter was 0.9, once again stood below 1, a consequence of an overall weak car market amid ongoing macro uncertainties. The past couple of months were marked by repeated downward revisions of vehicle production numbers by market researchers. The last forecast from IHS put the calendar 2019 global light vehicle production at 88.8 million units, a decline of 5.8% over the previous year. For 2020, predicted volumes are essentially flat at 89 million cars. Especially, the Chinese market paints a rather bleak picture as a slowing economy and the macro uncertainties are weighing on customers' spending power. Channel inventories there remain high overall. We forecast that the destocking back to normal levels will take about 2 more quarters. In the September quarter, also the ATV market in China slowed down considerably. Sales of electric and plug-in hybrid light vehicles declined by 16% year-over-year as subsidy cuts and the relaxation of license plate restriction for traditional cars took their tolls. In Europe, on the other hand, OEMs are launching a slew of 48-volt hybrid and full battery electric vehicles in order to meet fleet emission targets, which are being phased in from next year on. EV penetration clearly will have to go up to avoid penalties, but an accelerating effect is likely to be felt more towards the second half of the 2020 calendar year. In our view, these short-term fluctuations are bumps on the road. The secular trend towards electromobility is unbroken and is offering us very attractive growth potential over the mid and long term. We continue to shape this evolution with the broadest and most scalable portfolio of power semiconductors, ranging from IGBTs to silicon carbide components from chips to frame-based and molded modules. Those power devices are complemented with Infineon-optimized drivers, microcontrollers and sensors to support our customers in their product strategies. With regard to the second major automotive trend, the increasing pervasiveness of advanced driver assistance system, we are observing an acceleration of Level 1 and Level 2 automation and the delay of higher levels, driven by the lack of an established regulatory framework and the technical challenge of providing safety in virtually all driving situations. This leads to the creation of a so-called Level 2+ with additional functions for which we feel well positioned with our sensors and microcontroller portfolio. For example, in radar, we're expanding our leadership in sensor ICs to full chipset offerings. Our AURIX automotive microcontroller has confirmed its status as a prime choice for a broad variety of automated driving applications by a design win awarded from a major Tier 1 for domain control gateway, radar, sensor fusion as well as camera and host control platform. Now to Industrial Power Control. The segment posted revenues of €362 million, an increase of 1% compared to the previous quarter. From an application point of view, renewable energy saw strong demand, especially solar, offset by sluggishness in industrial drive and home appliances. From a product perspective, it remains a tale of two speeds. Medium- and high-power component are providing robust, low-power discretes, and gate driver markets are soft. The segment results for the fourth fiscal quarter came in at €59 million, resulting in a segment result margin of 16.3% after 15.4% in the previous quarter. When comparing to the margin level of 20% achieved in the last fiscal year's quarter 4 on essentially flat revenues, the key difference are charges associated with lower fab loading. The book-to-bill ratio was 0.1 for the September quarter. Many industrial market segments are late cycle in nature with business dynamics -- sorry. The book-to-bill ratio was 0.8 for the September quarter. Many industrial market segments are late cycle in nature with business dynamics depending on the overall economic situation, GDP growth and sentiment. Regarding the latter, manufacturing indicators are trending weak with the U.S. PMI turning into negative territory in the September quarter following similar developments in Europe and China since last year. October data were slightly better, but amid continuing macro concerns, projects are being delayed and longer-term CapEx decision held back. We and other industry participants are working hard to bring inventories back to normal levels, which is difficult due to persistently weak demand. In this challenging environment, renewable energy is holding up well. Solar and wind remain growth engines and are among those areas suited for an early and rapid uptake of silicon carbide solution. Other application fields, which should see a rapid adoption of silicon carbide include energy storage, industrial power supplies and EV charging. For all these, Infineon is offering one of the broadest and most different product portfolios including discrete silicon carbide MOSFETs, hybrid and full silicon carbide modules. Our ability to address critical performance and quality requirement resonates well with customers, and we were able to significantly increase our silicon carbide design-in funnel throughout the 2019 fiscal year to more than €1.8 billion. Now to Power Management & Multimarket. PMM ended in the 2019 fiscal year with quarterly revenues of €639 million, a sequential increase of 7% or 6% assuming a constant U.S. dollar exchange rate. Growth mainly came from the area of mobile handset, which saw both seasonally higher demand as well successful product launches. In comparison to the September quarter of last year, PMM revenues were down by 2% and by almost 6% at a constant U.S. dollar exchange rate. PMM printed a segment result of €153 million, corresponding to a segment result margin of 23.9% after €145 million and 24.2% in the previous quarter, a very robust level in a challenging market environment. The book-to-bill ratio for PMM stood at 0.6, evidence of a muted demand picture. Very clearly, sell-in to the supply chain is currently below consumption as the inventory correction that we mentioned already in the last quarter's call is continuing. The current rate of inventory burn in the chain on the one hand and the level stock on the other hand indicate that things should look better latest in the second half of our fiscal year provided, of course, the global economic climate does not deteriorate further. Momentum for components going into service and data centers sees first green shoots of improvement. Demand for power components for electromobility and for 5G is fairly resilient. Here, we also continue to see unabated mid- and long-term structural growth potential. The same is true for battery-powered applications. Regarding handset-related product, the current dynamics are quite favorable, partially driven by seasonality but mostly from a positive market acceptance of our products. We are encouraged by the uptake of our time-of-flight and 60-gigahertz radar components. The latter is enabling motion sensing in a newly launched Google Pixel 4 flagship phone. Using an integrated antenna system, it senses presence and movement of people and objects with high precision and measures distance and speeds. With this, gesture control without touching the device is possible. We anticipate that 60-gigahertz radar technology can also be deployed for smart speakers and TV sets on the consumer side as well as industrial applications such as air-conditioning equipment and smart lightning. Also, our silicon microphones are on a good trajectory helped by the higher numbers of such sensors per phone, new accessories such as the noise-canceling headsets and further use cases such as interactive TVs. Let's now come to Digital Security Solution where we recorded revenues of €162 million in the fourth quarter of the 2019 fiscal year, a sequential decline of 3%. This decline is actually the net out of 2 opposing effects: on the one hand, operational revenues within the quarter increased mainly from payment and authentication solution; on the other hand, under IFRS 15 accounting rules for revenue recognition, we booked lower revenues for customer-specific products compared to the previous quarters leading to a deduction of so-called contract assets. In general, this IFRS 15 effects are temporary in nature and level out over time. The segment result came in at €22 million, corresponding to a segment result margin of 13.6% compared to 11.4% a quarter earlier. This margin uptick is a reflection of the IFRS 15 effect described above. The book-to-bill ratio stood at 1.3% at the end of September, influenced by the receipt of an annual order for a government IT project. Our embedded security solutions continue to see traction in the marketplace. We recorded project wins at various OEMs engaged in different IoT verticals including automotive and industrial equipment. Furthermore, to improve the security and performance of cloud-connected devices and services, we launched the turnkey OPTIGA Trust M solution. This turnkey IoT security solution is ideal for IoT applications like industrial and building automation applications, smart homes and consumer devices. With this, I would now like to hand over to Sven who will provide comments on our key financial figures as well as an update on the refinancing of the planned acquisition of Cypress.

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. Let me start with some more details on the margin development in Q4 of the concluded fiscal year 2019. The gross profit was €731 million after €735 million in the previous quarter. The gross margin declined from 36.5% to 35.5%. Excluding nonsegment result effects, the adjusted gross margin stood at 36.3%. As you have heard in the divisional review, we are currently incurring significant underutilization charges. These have become a meaningful drag on margins since we decided to lower fab loadings at the end of the March quarter. In the September quarter alone, idle costs burdened our results by over €100 million. In the entire fiscal year, the amount was close to €300 million. Recognizing that production facilities, front end and back end, will never all be fully loaded due to structural effects, there's always a normal baseline of underutilization charges. Considering this, the economic impact of cyclical idle costs above such baseline was about 2 percent points of segment result margin for the full 2019 fiscal year. Research and development expenses and selling, general and administrative expenses came in at €230 million and €222 million, respectively. The net operating income amounted to minus €33 million. The nonsegment result for the quarter stood at minus €65 million and was mainly composed of amortization and other charges resulting from the International Rectifier acquisition, accruals to litigation-related provisions and costs incurred in connection with the planned acquisition and integration of Cypress. Of the total nonsegment result, €17 million hit our cost of goods sold; €1 million, R&D; €12 million, SG&A; and €35 million were included in other operating expenses. Our investments into property, plant and equipment, intangible assets and capitalized development costs in the fourth quarter of the 2019 fiscal year amounted to €350 million, essentially flat against €344 million in the prior quarter. Our investments for the entire year were €1.451 billion, in line with the figure of around €1.5 billion that we had guided. Depreciation and amortization including nonsegment result effects went up slightly from €238 million to €244 million. Included in these figures are in each case €21 million related to the amortization and depreciation of fair value step-ups almost entirely from the purchase price allocation from International Rectifier. The portion of depreciation and amortization included in our segment result, therefore, moved from €217 million to €223 million. Before continuing with our financial result, cash flow and liquidity position, I would like to further update you on the Cypress financing. Following the €1.55 billion share placement in June, we meanwhile took a second important refinancing step and successfully issued Infineon's inaugural hybrid bond, raising €1.2 billion across 2 tranches. We are very pleased that we could tap a new investor base, diversify our sources of funding and secure further equity without dilution. The hybrid will be completely accounted for as equity under IFRS. You do not yet see the impact in our balance sheet given that the settlement occurred on 1st of October. From a rating point of view, S&P will assign 50% equity credit to the instrument once the Cypress acquisition closes. In other words, €600 million from the hybrid bond are to be added to the €1.55 billion from the share placement, bringing the total of rating-relevant equity to over €2.1 billion. As you will recall, we announced that we intend to ultimately finance around 30% of the transaction value of €9 billion with equity, in line with our clear objective to remain an investment-grade company. Having derisked the equity portion of the Cypress financing so substantially, roughly 80% is already accomplished, we are now in a position to reassess timing and composition of the refinancing package at the actual closing of the transaction. Just as a reminder, the fully committed bank facility with tenors up to 5 years for the initial financing of the acquisition, of course, continues to stay in place. Now to our financial result for the September quarter. It stood at minus €18 million including the impact of mark-to-market valuations of our holdings in not fully consolidated companies and expenses related to the aforementioned acquisition financing facility. In the preceding quarter, the financial result had been minus €31 million and had contained expenses related to the acquisition financing facility as well as the result from unwinding equity hedging instruments in connection with the share placement. Meanwhile, the deal-contingent currency hedges put in place for the Cypress acquisition are having a positive impact of €98 million from fair value changes within the other comprehensive income, or OCI, due to the strengthening of the U.S. dollar against the euro. Now to taxes. Income tax expense in the June quarter went up to €64 million compared to €28 million in the previous quarter. As there were certain nonrecurring effects in both quarters, it seems more meaningful to take a full year view. Income tax expense for the 2019 fiscal year was €194 million resulting in an effective tax rate of 18%. Our cash tax rate was 13%, and thus, somewhat better than the guided 15%. For the 2020 fiscal year, we once again view a cash tax rate of around 15% as a reasonable assumption, driven by existing German tax loss-carryforwards from which we expect to benefit for around another 5 years. With respect to discontinued operations, we recorded a loss of €2 million in the last quarter of the 2019 fiscal year mostly related to minor adjustments of provisions in connection with the ongoing Qimonda litigation. Continuing with free cash flow from continuing operations for which we saw a notable inflow of €334 million in the September quarter, bringing the annual figure to positive €39 million and €62 million, respectively, if we adjust for Cypress related cash impacts. The Cypress acquisition and its financing had a negative impact of €11 million in the fourth quarter and of €23 million in the entire fiscal year. Our gross cash position as of September 30, 2019, amounted to €3.8 billion containing the proceeds from the share placement, but as mentioned, not yet from the hybrid bond. Considering financial debt of €1.6 billion, our net cash position stood at €2.2 billion. Our reported after-tax return on capital employed, or RoCE, came in at 9% in the September quarter. The annual value is 12.2%. Excluding bookings related to the acquisition of International Rectifier, in particular, goodwill, fair value step-ups and amortization, effects from the pending Cypress transaction as well as deferred tax effects, the annual adjusted RoCE stood at 19%. I will now pass back to Reinhard again, who, as usual, will comment on our outlook.

Thank you, Sven. As mentioned at the start of this call, the business environment and our market is bottoming. The inventory correction is playing out, but given the absence of macro improvement, recovery will take more time. Coming up with a full year prediction in such times of limited visibility obviously entails risks, both to the down- as well as to the upside. So this is what we view as our most likely scenario excluding Cypress. For the full 2020 fiscal year, we assume that we can deliver year-over-year revenue growth of 5%, plus or minus 2 percentage points. In other words, our growth rate will be similar to the 2019 one and this also goes for assumed exchange rate of $1.13 for the U.S. dollar against the euro. Breaking it down by divisions, we see the following picture: ATV is expected to grow a bit above the group average. The global automotive market, after the severe decline in 2019, seems poised for a period of no unit growth. Therefore, having the right products to benefit from pockets of structural content growth becomes all the more relevant. Infineon is in this strong position, driven by xEV and ADAS, for which we see clear double-digit growth rates. PMM's growth should essentially match the average for the group, carried by sensor for smartphone and other application and by power products for communication infrastructure and enterprise computing. For late-cycle industrial applications, overall activity is muted, but certain areas such as renewables are showing encouraging momentum. As a result, we are expecting a slightly below group average growth rate for IPC. DSS revenue should stay flat or grow just slightly. At the midpoint of the guided revenue range, we expect a segment result margin of around 16% of sales. Incorporated in this picture are underutilization charges increasing to around €400 million. Said differently, cyclical idle costs will burden our segment result margin in the current fiscal year by about 3 percentage point. Against this, we deploy a range of cost-containment measures in order to safeguard our profitability. From a timing perspective, we expect some further deceleration in the near term, exacerbating our usual seasonality. This is driven, to a large extent, by distributors working down their inventories. For the running first quarter of the fiscal year just started, revenues are anticipated to decline by 7% quarter-over-quarter, plus or minus 2 percentage points. Assuming inventory levels in the channel were at their long-term average levels, our revenue decline would be more in line with our usual seasonality. As you will be quick to extrapolate, there is somewhat of an above-seasonal recovery assumption for the second half of our 2020 fiscal year baked into our full year's projection. The segment result margin for this December quarter is expected to come in at about 13% at the midpoint of the guided revenue range. Given the projected revenue decline, underutilization charges will see their peak with about 40% of their annual amount hitting the first quarter. This includes a 2-week closing of our factories in Dresden, Kulim and Temecula over year-end. At the same time, there will be a nonrecurrent positive effect stemming from a refined inventory valuation made methodology. In essence, we will allocate indirect costs related to our manufacturing across earlier stages in the manufacturing process to unfinished goods. This onetime effect will benefit our gross profit. Now to our investments. For the 2020 fiscal year, we expect them at around €1.3 billion including capitalized development costs. Around one third of the overall amount will be for factory buildings and their required infrastructures as well as office buildings. We are, therefore, laying the foundation for benefiting significantly from structural growth potentials. This notably includes the further construction of our 300-millimeter production facility in Villach. We're aligned -- we are aligning the speed of the construction to market developments and currently expect start of production around the end of calendar year 2021. Regarding our target operating model, we will comply with the investment-to-sales ratio over the 2-year periods of taking financial years 2019 and 2020 together. Depreciation and amortization are expected to amount to around €1 billion, again, in the fiscal 2020 year. For our free cash flow, we expect to reach a level between €500 million and €700 million in this fiscal year, significantly above the €39 million that we achieved in the fiscal year 2019. Before ending the introduction, let me briefly update you on the status of our planned acquisition of Cypress. In the time since our last quarterly call, we have done all necessary regulatory filings and received most antitrust clearances already. The shareholders of Cypress voted in favor of the transaction back in August. From our dialogue with relevant authorities, we remain confident about a closing at the end of 2019 or the beginning of 2020. After closing the acquisition, we will comment on updated projections for the combined company. Ladies and gentlemen, let me summarize the key points. With the September quarter, we closed a challenging fiscal year 2019 slightly ahead of our predictions. Our markets continue their stabilization. We expect recovery not to set in before second half of our fiscal year and to benefit significantly from it due to the number of structural growth drivers we address. Therefore, there will be both cyclical pressure and structural growth. In our base case scenario underutilization charges will go up, to a large extent, compensated margin-wise by cost containment measures. Underlying profitability is, therefore, fully intact. Should market recovery take longer, however, idle costs would be more sticky. On the other hand, in case of an earlier snapback, available capacities could swiftly accommodate a higher growth rate, increased profitability. We continue to work on closing the Cypress acquisition. With the successful placement of our debut hybrid bond, we have already achieved a further important refinancing step. Ladies and gentlemen, this concludes our introductory remarks and we are happy to take your questions.

[Operator Instructions] We will take our first question today from David Mulholland from UBS.

Just, firstly, obviously, you've commented a few times that there's quite a snapback assumed in your guidance into the second half of the year. But can you just help us to be clear on what are you assuming in the second half recovery in terms of a cyclical recovery for the market versus just structural drivers of your business playing through? And then, secondly, just as a quick update. Just to be clear, Sven, on the commentary around the Cypress financing, does that mean there won't be anything else done until closing of the deal? And just to be clear, does something have to happen or is there flexibility that you're already done now in terms of financing from an equity perspective?

Yes. David, thank you for the question. I think we can be a little bit more, I would say, detailed on the seasonal effect. So what we expect that Q1, we guided with a minus 7% quarter-on-quarter, which is slightly stronger than typical seasonality. In the quarter 2, we already expect a certain seasonal recovery with partially incorporating end of destocking effects. But this quarter, we still voice as a quarter where markets do not significantly come back. For the second, this means a certain start of improvement towards the second quarter already. Quarter 3 and quarter 4 are these quarters where we expect markets coming back with a more than seasonal growth recovery in Q3, combined with an end of destocking, and quarter 4, although with stronger than seasonal growth, which is kind of a snapback from the 2019 fiscal year. Both quarters, of course, assuming that the markets are, I would say, coming back as we indicated in the speech. Regarding the finance, Sven will take the question.

Yes, David. So with the 80% being done already, you are right, we have now the full flexibility to assess the timing and the composition. But please do not expect any equity step prior to closing, if any.

That's great. And can I just quickly follow up on the comments that you made, Reinhard, on the second half because there's a lot of drivers that you've called out in terms of structural growth for the business as well. So just to be clear on that, is it all market recovery in the H2 element? Or is it also things like EV starting to kick in?

Well, for the EV market, we also assume that it goes back to a double-digit growth figure and because the current drop in the EV market due to the Chinese regulatory, say, changes, we believe, are temporary. Regarding the overall, of course, our automotive model is that we have a very slight tailwind, I would say, effect from the number of cars, which is 1 to 2 percentage of the Automotive growth comes from there. And so here, we expect no further decline, as indicated, so roughly flat car number. The rest is a, I would say, content growth for standard automotive products while a structural growth for ADAS and xEV. For IPC and PMM, we expect structural growth figures to support our growth assumption, but also cyclical recovery and coming back of the market is assumed within. So we do not expect that the total growth comes from market coming back. We still are very strong about the belief that our structural strengths will help us to be better than market.

Our next question today comes from Andrew Gardiner from Barclays.

Just a bit of a follow-up in terms of the comments you're making on the second half of the fiscal year in that above-seasonal strength in the end of destocking. Are there any signs on perhaps some of your longer lead time items that customers are giving you a rough indication, and maybe they're not signing formal orders yet, but that there is an anticipation that they, too, would be looking to be increasing their purchases at that time frame in the second half of next year?

Thank you, Andrew. Helmut will give you some more flavor on that topic.

Yes. I think the way to look at it is, number one, in the first half of the year, we're still looking at some inventory correction, in particular, in the channels whereas in the second half of the year, we expect the channel to be at long-term average inventory levels, so there's no further suppression of our revenue by the inventory correction. Number two, we -- I'd say, our lead times in average for the company that is in line with long-term average lead times. However, you can currently see certain parts of our business, which still have long lead times because of strong structural demand. So on these items, we expect the situation to continue whereas on some other, let's say, shorter lead time items, we expect the market recovery also by structural growth in the second half. So basically, I think Sven mentioned there's a cyclical effect, on the one hand side, and there's a structural effect on top of it. And certainly, one has to take into account that our order book is still reaching very far into next year. So we have visibility into next year that basically supports our guidance.

Also, if I could, just a quick follow-up on the CapEx. €1.3 billion for the coming fiscal year or around 15% of sales, that's a bit weaker than you had been implying previously when you consider the 15% long term plus the additional cost of 300-millimeter, the headquarter investment and some of the other items you're investing in. Can you help sort of break down the pieces of that CapEx guidance as to how much is related to cyclical and perhaps sort of the weaker-than-anticipated revenue growth, 5%, versus the long-term of high single digit, 10%? I presume you still have some of the structural elements in there, of course, related to 300-millimeter.

Andrew, thank you for that question. Yes, of course, we consider the various effects. Jochen will give more details on that.

Yes. This is Jochen from my side. So if you look into our model, which we published at the Capital Markets Day in London, we stated that at 9% growth, we have 6% fixed CapEx and 7% related to capacity expansion and then we had a bucket basically of low triple-digit for structural and revenue upside and €700 million for major fab and office buildings. So we are sticking basically to this model. Out of this €700 million, we take this year €300 million for Villach and some office buildings. The total number of building-related CapEx is higher and that was what Reinhard had outlined is almost 1/3 of the total budget. We are taking also about €100 million out of this low triple-digit euro amount for structural topics also for long lead time items in order to be ready for the ramp. In total, if you combine last year's numbers with this year's number according to forecast, we are sticking cumulatively to exactly to this target operating model, which we outlined in London 1.5 years ago.

Our next question today comes from Jerome Ramel from Exane BNP Paribas.

Question on silicon carbide, what is the CapEx allocated to your silicon carbide capacity? And maybe if you could share with us what's going to be your capacity in terms of wafer start per month 6-inch.

So here, Jerome, thank you for that question. The silicon carbide investment you have to see as a composite figure of reusing 6-inch wafer capacity, which we have installed today and complementing it by equipment. Jochen will give some more flavors of it. But here, we have, I would say, a very good view on the longer-term development, especially in Automotive because the automotive design wins we have on hand will kick in later. Here, it's, of course, important to secure these design wins while the major growth comes from Industrial. Jochen, please, can you give some more insight on that?

Yes. As Reinhard pointed out, we are, of course, reusing here the existing 6-inch facility in Villach, which naturally lowers then our new capital requirements. Silicon carbide and gallium nitride here makes up for mid-double-digit million number. But again, it's not very meaningful. You have to compare it with the capacity structure, and here, we are going ahead full steam. As Reinhard pointed out, our design-in funnel, especially on the IPC side is very big, and we are preparing for this ramp.

And maybe as a follow-up, could you update us with your acquisition to recycle the silicon carbide wafers?

Yes. So the, I would say, recycling of the -- I think it's not 100% correct word, but I know what you mean. So the acquisition we have done here in order to cut the so-called boule rod we will drive into 2 directions. It's in responsibility of Jochen. Maybe you can highlight that.

Yes. As we outlined with our Siltectra acquisition, you can make 2 out of 1 by splitting the wafer after processing. You can also go into boule splitting here. Siltectra offers nice opportunities, but again, as we outlined at the day of the acquisition, it will take some time to industrialize this concept, and basically, we are here on track.

We'll now go to our next question from Johannes Schaller from Deutsche Bank.

I think in your long-term growth model for Auto, you had the xEV growth, I think, around 4% as a contributor. If you could just help us understand what you're planning for this year? I guess, that's probably a little bit less. And how much of that is coming from China and maybe how much from other regions? And then the second question, I think from your Cypress partnership that you started, I think, last year, some of those 20 developed products should be coming to market now. If you could maybe give us a bit of an update on initial reception and demand from that, that would be great.

Thank you very much for the question. So the EV, and it's not 100% correct as you state. We said 4% -- 4 percentage points come combined from EV and ADAS, so half of it each. Helmut will go into more detail. Before that, I just will briefly comment on the Cypress partnership. It is that we jointly develop application, implementing products from Cypress there, so it is more an application-based cooperation and not completely new development of product that will be part of our revenue synergies later on after closing, but this should come to the market in the next calendar year. In the current fiscal year, we should see effects on it, but these are on a lower level yet.

So I'll add to the EV and ADAS growth. The first half year, EV growth is reduced as compared to the previous year, simply by the effect coming from China. Growth of EV being slowed down, we expect that to normalize, however, in the second half. And in addition, in the second half, we do see preparation for Europe coming up as the regulation kicks in, in 2021. In the second half of fiscal year '20, we anticipate additional growth from EV coming from the European OEMs. So overall, I'd say EV is slightly lower additional growth than the previous year, however, still a very strong driver of our growth. ADAS instead is continuing growth path as has been done before, so no slowdown of ADAS growth overall.

When you say H1 reduced growth, so you still see growth year-on-year in H1 on the EV side? Or is it more maybe a headwind?

We do see growth, but it is much more modest than previous years, year-over-year.

Our next question now comes from Achal Sultania from Crédit Suisse.

Just a question on your PMM business. Obviously, you've been trying to basically get more exposure into some of the smartphone vendors, especially in the Android camp. Can you help us understand what kind of product designs that you have been working on? We know time-of-flight is one example, but hasn't seen wide adoption. So what exactly kind of mass adoption products you're working on in the smartphone space? And can we see some impact from those products in 2020? Or is it more beyond 2020?

Achal, thank you for the questions. So we see 2 major effects on the revenue side, the time-of-flight and the radar both are topics still, I would say, to kick in more strongly and we have not assumed significant mass adoption for this type of product and application, but expecting to do so longer term. On the other side, our major growth drivers in this area comes from silicon microphones where we really enjoy a very broad application, and the number of microphones are increasing per phone as well as a number of microphones in the various, I would say, add-ons like the earphones and the rest. And here we are, I'd say, very broad across various markets including, of course, the Android base. Regarding time-of-flight and the rest, as I said, we have to wait and see. Our RF products are also developing quite nicely. So we can give you some numbers. Silicon microphone was 210 million in '19, and we will grow to 270 million in fiscal year '20.

Okay. And one follow-up on the previous question on xEV. So it seems like you have around €500 million of revenues in xEV this year. How should we think of like -- is it fair to assume that more than 50%, 60% of that business is coming from China? Just trying to understand like you mentioned that headwind from China in the couple of quarters upcoming, but then things start to stabilize and then you start to see acceleration in Europe. So just trying to get some quantification around that exposure of EV by region?

Well, Helmut, it's your turn.

Thank you, Reinhard. Yes. So the share of xEV revenue in China is not quite as high, as you said. It's roughly in the range of 40% of total xEV revenue in China. And we expect that to be, let's say, a little bit lower in the fiscal year '20, but roughly in line as the second half of the year comes back as well.

And we now move to our next question from Varun Rajwanshi from JPMorgan.

This is Sandeep Deshpande here. Two questions, if I may. Firstly, can you talk about the margin guidance. I mean you're guiding 16% margin into the following fiscal year. In terms of seasonality, you normally see price reduction in the second fiscal quarter of the year, and thus -- I mean, theoretically, your margin should go down from the currency-guided level from Q1 to Q2. And then it would mean that the margin ramps up very dramatically in the second half of the year. Could you make a comment on the seasonality of the margin? And then, secondly, you have recently seen between in radar in the phone, et cetera. Can you talk about whether you're working with any other handset vendors on this device going into -- on this going into the smartphone market?

Thank you, Sandeep, for your question. I'm not sure if I understand everything 100%. But let's, first of all, look at the margins. We will, here the -- we have, of course, expected some price decline. But for as very usual, which we do not go into details regarding that, but the major driver in margin comes from the drop of the eating up of the idle costs. Quarter 1 has 40% of the annual expected idle costs, which should go down as we are seeing a recovery and I would say, it's kind of -- I wouldn't call it a V shape, but it's at -- I explained the recovery we expect already before. So with this and an improved loading going into the third and fourth quarter should be the major driver for that. So it is nothing where we have product -- or unusual product-related gross margin improvements. Regarding radar, Helmut, can you comment on it?

Yes. We are working with several other vendors right now. Nothing to be announced by the company, basically. So we have already talked about Google looking at our radar solution and bringing it into the Google Pixel 4. The time-of-flight, as you know, we have put it into the LG phone and looking at other vendors, too. Actually, we do have one that we are designed in yet, but nothing to be announced publicly at this stage. So multiple interests. But as Reinhard mentioned, nothing that we expect a major revenue increase from for the coming fiscal year.

Sorry. Just to clarify on the earlier question, are you saying in terms of utilization that the underutilization charge has been reduced significantly in the second fiscal quarter?

Yes. This is the expectation, especially as we reramp.

We'll go to our next question now from Adithya Metuku from Bank of America.

Can you hear me?

Yes. Loud and clear, Adi.

Yes. Good. So two questions if I'm clear. Firstly, just on silicon carbide. I just wondered if you could comment on how these wins are spread out across customers? Are they mainly within the autos landscape or are they more coming from the industrial landscape? And there what time frame this €1.8 billion wins will materialize? Secondly, I just had a question on the Siltectra acquisition. When you look at -- there's a talk of other players in the industry having similar technology, so I just wondered how much of an advantage will this be once it materializes in terms -- in the 2021-2022 time frame? And how much of an advantage will it really be when it comes to having wafers entirely produced as opposed to buying them externally and then using the skills and the technology you get from Siltectra? And then I have a quick follow-up, if I'm allowed.

Yes. Adi, thank you for these questions. There is -- we have, I think, detailed communication already on the silicon carbide. 30% of the design-in funnel is coming from automotive. The rest is industrial. In industrial, we see, of course, the reported renewable energy portion and all the trains coming in as a growth potential nearer term, I think, here, Mr. Foltin can provide once more the detailed charge with this. Regarding Siltectra, really, in respect to silicon carbide, I think, here, we should not forget that Infineon is besides the ideas of improving or reducing the cost by using Siltectra, which Jochen will mention more in detail, we are ahead of the competition introducing the trench and learning about the trench MOSFET, which we believe is a significant, I would say, know-how advantage. And I think with this, Jochen?

Yes. You're right, there are competing technologies out in the market in terms of splitting boules, not so much in terms of splitting wafers. As we pointed out already at the Capital Market Day in London, it's all about reducing the waste. At the end of the day, only 10% of the original silicon-covered ingot is used and these technologies are now offering different ways in order to reduce this waste more effectively or less effectively. I can only tell you at this point in time, as all these technologies are still in development, that we feel very good about the competitive positioning of our Siltectra technology.

And would you say in 3, 4 years' time that having wafers internally wouldn't provide a big advantage if Siltectra works as you expect it to? Or would your views be different?

Yes. So definitely, we believe that Siltectra will play its advantage for -- into our hands. And I think 3 or 4 years is a realistic time frame especially as various ways in order to move forward with silicon carbide wafers may play in. And considering a large wafer diameter cutting, this is even more differentiating than on 6-inch.

Our last question today now comes from Aleksander Peterc from Societe Generale.

Just have two kind of more maintenance questions just to understand what is the nonrecurring positive impact from the inventory accounting methodology change in broad terms for the quarter -- for the first quarter of fiscal '20. Is that roughly 1 percentage point positive impact? Is it more or less? And then, secondly, if you could remind us of the accounting treatment of perpetual bonds. So we've got, if I understand you right, about €40 million of interest. And if you could remind us whether or not that is a tax-deductible charge in Germany and how that is treated in the P&L from the IFRS point of view, both in terms of net profit and in terms of EPS. I understand there are different treatments there.

Thank you, Aleksander. Both questions go to Sven.

Thank you. So on the question for the related indirect costs, so if you may recall, I mean, I have not been with the company, but probably some of you have already covered the company, 5 years ago, there was a similar effect. Back then, there were some allocated production-related overhead costs, which were related to work-in-progress inventory after the die bank so mainly back-end related value-add, which was then added back to earlier stages in the process of manufacturing. The impact at that time was around €25 million. Now with new IT systems and with more visibility, we are now doing the same again, so to say, on the front-end value-add. So we will now allocate front-end related indirect costs earlier to the production process from raw material to the die bank. This is the effect we are describing here. Now the second question to the hybrid. So first of all, let me recap that in the full year 2019 numbers, the hybrid except the upfront cost was not included. So the cash proceeds will come in, in the first quarter of this year. It is tax deductible in Germany, I can confirm that. And the interest will be in earnings net of tax for EPS purposes.

Not in P&L, right?

No. In the P&L, it will be a distribution of profit, but we will show it in the EPS calculations. So Aleksander, you can also follow up on that one as it's a pretty particular question in one-on-one with Investor Relations if you prefer. I think we now have reached a point where we need to wrap up this call. Operator, please do your closing remarks.

Thank you. That concludes today's conference call. Thank you, everyone.