MUNICH (dpa-AFX) - Siltronic has felt the effects of weak demand from the semiconductor industry in 2023. Sales and operating earnings of the MDax-listed group fell significantly, but reached the company's targets and roughly matched analysts' estimates. Siltronic initially did not comment on its expectations for 2024 this morning. At the end of November, the company had said that at least the first half of the year would still be impacted by high inventories at chip manufacturers and their customers.

Siltronic's share price fell on the Tradegate trading platform by 0.7 percent to 86.85 euros compared to the Xetra close, almost in line with the overall market.

Signals from the chip industry have been mixed since the turn of the year. Forecasts from the US chip group Intel and Infineon's competitor STMicroelectronics, which is strongly geared towards the automotive and industrial sectors, were disappointing. By contrast, statements from Taiwan's TSMC, the world's largest chip contract manufacturer, were received positively by industry observers. "Our business has bottomed out and we expect to see healthy growth in 2024," said TSMC CEO C. C. Wei in mid-January during the publication of annual figures for 2023.

In 2023, the chip industry suffered from consumers' and companies' reluctance to buy smartphones, computers and other electronics. In addition, many chip manufacturers and their customers had replenished their stocks with whatever they could get in times of supply chain problems during the coronavirus pandemic. They continued to reduce these stocks for the time being, so new orders were low.

As analyst Constantin Hesse from investment firm Jefferies recently explained following the presentation of quarterly figures from Siltronic competitor Shin-Etsu, the end markets are recovering more slowly than expected. However, the risk of a further significant decline in sales is low.

Siltronic's sales fell by 16 percent year-on-year to around 1.5 billion euros in 2023, as the manufacturer of silicon wafers announced on Thursday on the basis of preliminary figures. Nevertheless, earnings rose slightly in the final quarter compared to the third quarter of the year. However, the operating result (EBITDA) remained under pressure.

In 2023 as a whole, 29% of turnover remained as earnings before interest, taxes, depreciation and amortization (EBITDA). In absolute terms, this corresponds to a decline of just over a third to 434 million euros. Adjusted for a one-off compensation payment of 50 million euros, which the company received in 2022 as a result of the failure of the takeover by Globalwafers, the decline was less pronounced.

Increased investments also weighed on profits. Wacker Chemie 's shareholding invested a lot of money in a new plant in Singapore; in addition, the production site in Freiberg, Saxony, was expanded to include another pulling hall for silicon crystals. These crystals can then be used to produce hyperpure silicon wafers, which Siltronic customers then process into electronic chips.

As the MDax company had already stated at the end of November, the start-up costs of the new site in Singapore will impact the profit margin in 2024. Details on this and an overall more concrete company outlook should be available in the course of the publication of the annual report for 2023 on March 12./mis/niw/stk