Siltronic sees no recovery in second half after quarterly revenue drop
(Reuters) -German silicon wafer supplier Siltronic AG on Thursday reported a 14% drop in first quarter revenue compared to the previous three months and said it doesn't expect a recovery in the second half of the year as demand remains muted.
The global tech industry has been battling a sharp and sudden downturn in demand since late 2022, as companies cut spending on tech products and services while consumers spend less on discretionary goods amid steep inflation.
The Munich-based firm, whose customers include Intel, TSMC and Samsung, said it expects an EBITDA margin of between 27% and 31% in the second quarter, with sales in line with the first quarter.
It said wafer demand growth will stagnate throughout the year, adding PC wafers were a particular drag on demand.
"Consumer sentiment is muted, inflation is hard to fight, China is still under shock from the lockdown and a war is looming in Europe but soon customers will come back," said Chief Financial Officer Rainer Irle in the analyst call, although he didn't give a timeline for a pick up in demand.
"Memory makers account for more than 50% of 300 mm wafer shipments, according to our calculations, which makes Siltronic exposed to memory fundamentals that continue to deteriorate," said Stifel analyst Juergen Wagner in a note.
Siltronic's 200 and 300 mm silicon wafers are used for semiconductor components in automotive engineering and telecommunications, as well as integrated microprocessors and memory modules for information processing in cell phones, laptops and other consumer goods.
Merck KGaA said on Thursday demand for its semiconductor materials was expected to recover in the second half of 2023, but at a later point and from a lower base than previously assumed.
Siltronic posted quarterly revenue of 404.4 million euros ($445.2 million), just beating the 15% drop the company had been expecting.
The company's shares pared earlier losses of as much as 3.5% to stand 2.3% lower by 1100 GMT.
($1=0.9084 euros)
(Reporting by Anastasiia Kozlova and Paolo Laudani in Gdansk; Editing by Varun H K, Kirsten Donovan)
