The chipmaker saw revenues slump by 30 per cent for the third quarter ending in June and warned there were no clear signs of recovery.
Infineon's admission that it will be significantly affected by the gloom in the semiconductor market cut 12 per cent from its share price.
The European FTSE Eurotop 300 plummeted to its lowest point in three months while the EURO StoXX 50 lost one per cent and 45 of its members saw losses in share price.
STMicroelectronics, ARM Holdings and Marconi posted losses of 5.1 per cent, five percent and 4.1 per cent respectively.
The results add to the continuing gloom in the market following profit warnings last week from bellwethers Nokia and Nortel.