UPDATE 1-Infineon reshuffles again with eye on China

(Adds details, CEO comment)

* Infineon splits Industrial & Multimarket unit in two

* Expands management board to include IMM head

* New board member Mittal to drive expansion in Asia

FRANKFURT, Oct 28 (Reuters) - German chipmaker Infineon AG (IFXGn.DE) announced another reshuffle of its structure and management that it hopes will make it less vulnerable to economic downturns and help it tap into growth in China.

It said on Friday it was splitting its Industrial & Multimarket (IMM) business -- one of its three core divisions -- into two new segments and was promoting IMM's head to the management board, expanding its executive team to four people.

Arunjai Mittal, a 40-year-old who is not related to the steel magnate behind ArcelorMittal, will join the board on Jan. 1 to oversee sales and corporate strategy. He is expected to drive the company's expansion in Asia, especially China, Infineon said.

Infineon already generated almost half of group revenue in Asia-Pacific in the first nine months of its fiscal year.

"The challenges are in Asia and in new partnership models there. There is a big internal market there that we cannot ignore," Chief Executive Peter Bauer told journalists on a conference call.

Infineon, which is due to publish full-year results on Nov. 16, was spun off from engineering group Siemens (SIEGn.DE) more than a decade ago and last year chose to exit the mobile chip business by selling its wireless chip unit to Intel .

It has since decided to focus on three areas -- automotive, industrial & multimarket and chip card security -- to reduce its exposure to volatile consumer trends.

Now it is splitting IMM into one business focusing on industrial electronics, such as chips used in wind power plants, and one dealing with power supply for consumer goods such as television sets, mobile phones or computer servers.

"This is not a reorganisation intended to fix anything," Bauer said, adding all of Infineon's divisions are seen as core businesses and there are no plans for further divestments.

He said both of the new business segments could post annual growth rates of more than 10 percent and that the costs of reshuffling Infineon's structure were negligible.

Infineon earlier this month warned its sales would decline in its current fiscal quarter, blaming Europe's debt crisis for spreading uncertainty among its clients. (Reporting by Maria Sheahan and Jens Hack)