MUNICH, GERMANY: After a tough year fighting for survival, German chipmaker Infineon is aiming to be a top-three wireless chipmaker with double-digit operating margins, the company's chief executive said.

"Apart from the wireless business, we are among the top three in our business divisions. But that's a must for the wireless unit, too," Peter Bauer told Reuters in an interview.

Infineon, No.4 among mobile chipmakers, was spun off from engineering group Siemens in 1999 and listed in 2000.

Bauer, a trained engineer and life-long chip specialist, worked at Siemens for almost two decades and was part of Infineon's board for nine years before taking over as CEO from Wolfgang Ziebart in 2008.

Infineon's wireless unit makes chips for mobile phones, including those from LG and Samsung, and while the company will not comment, it is an open secret that it also makes the chip for Apple's iPhone.

Asked about rumours that Infineon was about to lose the Apple contract, Bauer said: "We have not lost any contract in the United States, and are not about to."

Infineon sees Long Term Evolution (LTE) technology, which enables fast mobile broadband access for services such as movies on mobile phones, as strategically important for its wireless division.

"I expect LTE to reach a sensible volume worldwide by 2013 or 2014. Larger integration of that technology will not happen until the second half of the coming decade," Bauer said in an interview on Friday but embargoed to Tuesday, adding that Infineon was already working with one customer to develop an additional chip that would function using LTE.

Shareholders need patience

Infineon, based in a suburb of Munich, was considered a candidate for state aid just over six months ago but pulled through due to gradually improving demand, the sale of its wireline unit, tight cost controls and a capital hike.

Still, Infineon shareholders will have to be patient for the first payout.

"While a dividend is technically possible to prepare for the annual general meeting early 2011, there are no plans to do so," Bauer said.

Europe's biggest automotive chip supplier has four units left - Automotive, Industrial & Multimarket, Chip Card & Security and Wireless Solutions.

Looking at the entire business, Bauer said he expected it to grow 15 percent in the current fiscal year, which ends Sept. 30, 2010, excluding currency effects.

"For 2010 we expect to see a continued weakness of the dollar, with an average exchange rate of 1.50," Bauer said, adding that the effect of the dollar would lessen over time as 90 percent of its mobile chip production would be in Asia by 2011, where currencies are linked to the dollar. He said the company was not planning to relocate any European sites to Asia, however.

Infineon has said it needs to boost profit margins well above 10 percent to generate sustainable earnings.

"At what time we will surpass the threshold of 10 percent depends on the market development. If the market continues to develop positively, it will not take long," Bauer said, adding that the current quarter was proving satisfactory.

Shares in the company were up 1.5 percent at 0803 GMT, outperforming the DJ Stoxx European Technology Index, which was 0.3 percent higher.

"(These are) quite confident statements. (The) 10 percent operating margin was forecast for some time. We expect Infineon to reach this level not before 2011," DZ Bank analyst Harald Schnitzer wrote in a note.

Bauer also said efforts to sell Infineon's stake in Altis, a joint venture with IBM, were progressing and that he was confident a solution would be found in the first half of 2010.

He said Infineon itself was currently not actively looking to buy, had not received any serious offers, and wanted to stay independent.