Revised revenue projections issued by Siltronic - Predicted Drop in Siltronic's Sales Revenue
In a recent statement, Michael Heckmeier, the CEO of Siltronic, a leading semiconductor supplier, expressed concerns about the current state of the market. Despite visible growth in end markets, Heckmeier stated that the growth has not resulted in a normalization of inventory levels at chip manufacturers.
This situation, combined with currency headwinds, has led to a revised outlook for Siltronic's 2025 revenue. Heckmeier has revised the 2025 revenue outlook for Siltronic to a mid-single-digit percentage range below the 2024 level of 1.4 billion euros.
The depreciation of the US dollar against the euro is affecting Siltronic's operations. This currency fluctuation negatively impacts euro-denominated revenue when converted from dollar-based sales. As a result, the revenue outlook for Siltronic in 2025 is a decline of around 5% compared to 2024, with expected sales in the mid-single-digit percentage range below the previous year’s approximately EUR 1.41 billion.
In the second quarter of 2023, Siltronic's revenue decreased by around six percent year-over-year to 329 million euros. Net income for the same quarter fell to 14.6 million euros from 22.4 million euros in the previous year.
Despite the revenue decline and weak demand, Siltronic is pushing forward with strategic initiatives. The company is focusing on customer qualifications of new manufacturing capacity in Singapore and ceasing production of smaller wafer diameters in Burghausen to better position for mid-term growth.
However, the semiconductor industry environment remains challenging with high customer inventories, which delay a demand rebound for wafers. Operating profit is projected to decline significantly in 2025, but the company expects improved (yet still negative) cash flow.
In the first half of 2025, Siltronic recorded sales of EUR 674.8 million, slightly below the same period in 2024 (EUR 694.8 million), with Q2 sales down 4.8% quarter-over-quarter.
Customers of Siltronic are being cautious in placing orders for silicon wafers, contributing to persistently high inventory levels at chip manufacturers. This situation is expected to continue suppressing sales growth in the near term.
In summary, Siltronic’s 2025 sales and demand are constrained by weak semiconductor market conditions and elevated chipmaker inventories, while currency headwinds from a weaker US dollar versus the euro further reduce reported revenue, leading to a lowered revenue target and cautious outlook despite ongoing growth initiatives.
In light of the challenging semiconductor industry environment, Siltronic has outlined a community policy to address these issues, emphasizing the need for careful customer order management to reduce high inventory levels at chip manufacturers. To prepare for mid-term growth, the company is also focusing on vocational training programs to upskill its workforce and improve its competitiveness in the sector, leveraging technology to enhance efficiency and productivity.
