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Infineon Technologies North America

In the Boardroom With...

Dr. Joerg M. Borchert
Vice President Chip Card & Security ICís
Infineon Technologies North America
(NYSE: IFX) Thank you for joining us today, Joerg. Please give us an overview of your background and your role at Infineon.

Dr. Joerg M. Borchert: I am currently the vice president of the Chipcard and Security IC group of Infineon North America. Immediately prior to this assignment I was the senior US executive for our Secure Mobile Solutions business. I joined Siemens AG (the company from which Infineon was spun off) in 1988, initially on the staff of the Corporate Board of Directors, handling Mergers and Acquisitions. After moving through a series of management functions in the Munich, Germany HQ of the semiconductor unit, I relocated to the US where I worked on business development programs and established Infineon Ventures/Mergers & Acquisitions as the company prepared for its initial public stock offering. I received my Mechanical Engineering and Business Administration degrees and my PhD in Economics at the Technical University of Darmstadt, Germany. What are the key market drivers for the Secure ID market at this time?

Dr. Joerg M. Borchert: This market is driven by a need for more secure identity documents - that is, documents which are more difficult to counterfeit and which offer additional functionality, such as the possibility for biometric authentication. Many technologies can enhance these security documents, from specialty inks, papers and laminates, to the inclusion of ICs supporting cryptography and secure data storage. Globally, the most important initiative right now is the migration to the electronic passport, or ePassport. The U.S government required the 27 countries participating in the U.S Visa Waiver Program to begin issuance of ePassports by October of this year and nearly all of them met the mandate. Counting the U.S., this makes 28 governments adopting ePassport, and we are now starting to see adoption by additional countries. There are an estimated 550 million passports worldwide, with approximately 350 million issued by the Visa Waiver countries.

Regionally, we see large scale projects for electronic national IDs, especially in Asia and Europe and ID cards for government employees in the US. Again, the driver is increased security. We understand that Infineon supplies its secure identification chips to more than 20 countries that have begun to use electronic passports or have begun to test this technology, including Germany, Hong Kong, Norway and Sweden. In addition, Infineon provides the secure chips inside electronic identity documents used in such countries as Italy, Finland, the United Arab Emirates, Australia and Belgium, and also for Hong Kong, as well as the chips used for secure identification cards issued by the US Department of Defense. May we have an overview of Infineon’s capabilities in this space?

Dr. Joerg M. Borchert: Infineon delivers security in silicon. We are trusted by our partners for our R&D, manufacturing, and technical expertise, and use innovative technologies to apply security in the semiconductor itself. Our secure microcontrollers contain dozens of sensors and filters and other designs to detect and shut down attacks on the chip, and they contain crypto co-processors and large memories to support advanced security algorithms and data or application storage. These chips form the heart of many ID cards and documents, providing a secure, stable and robust hardware platform upon which additional capabilities and features can be layered to meet the security needs of the issuer. Congratulations on the recent “win” with the U.S. government to supply security chips for the U.S. electronic passport system beginning this year. Without divulging any confidential or sensitive information, of course, can you give our audience an overview of this deal?

Dr. Joerg M. Borchert: The US passport is produced by the Government Printing Office, which conducted an open RFP for a new generation of covers with integrated electronics in 2004. The cover consists of the chip manufactured by Infineon (in its “front-end” factory) which is then embedded into materials which are bonded to the cover material. This construction includes a RF antenna connected to the chip, which allows for short-range, contactless communication between external readers and the chip in the cover. 

Infineon supplies the chip-embedded covers, but is not responsible for the manufacturing or personalization of the passports. Personalization, as the name implies, is the step in which a generic passport becomes specific to a person, and includes printing the biographic data and photograph on the data page, as well as writing that same data to the chip. All passport data collection and data handling is done by the government in its secure facilities.   

Infineon supplied chip-embedded covers for early pilot phases of the program, and is now the volume supplier for the rollout. Issuance of ePassports to regular citizens began in August.   According to the State Department, all of its issuance centers will be issuing ePassports before the end of 2006, with conversion to all electronic passports in early 2007. As more and more citizens apply for or renew their passports, volumes have been increasing dramatically. The US government estimates the annual volume to be 16 million this year. Is there another success story or two you’d like to talk about?

Dr. Joerg M. Borchert: Infineon has jointly developed with Sony, a secure integrated circuit (ICs) for contactless chip card systems. The Infineon contactless crypto–microcontrollers will incorporate Sony’s contactless chip card technology called "FeliCa.” This joint development not only became the de facto payment standard in Japan for eticket and epayment, it also expanded the contactless chip card market to include multi-application cards, card terminals and background infrastructure systems for data management.
We understand that you will be speaking at the Advanced Identification Systems Conference in December. May we have an overview of your key issues and trends you’ll be addressing?

Dr. Joerg M. Borchert: I will address the ePassport as a new frontier of eID and the importance of trust and security into silicon. Thanks again for joining us. Are there any other subjects you’d like to discuss?

Dr. Joerg M. Borchert: Thank you for your interest. There is one final thing I’d like to discuss, and that is how the silicon-based security complements other security features while simultaneously protecting privacy. Let me go back to the ePassport to illustrate:  it is not the mere inclusion of a chip that makes the document more secure, though that does make it much harder to counterfeit. More importantly, the chip supports additional technologies such as PKI, data encryption and biometric authentication which add layers of additional security, and helps protect the privacy of the user. For example, even though there is no data written to the ePassport chip that is not also included on the printed data page, that data cannot be decrypted and read without first opening the passport and reading the printed two-line machine-readable zone first. This functionality is known as Basic Access Control (BAC). This topic has been misunderstood and I think it is important to clarify it. The new ePassport with its chip and associated technologies is a more secure passport than previous generations of travel documents.