Siltronic, a German supplier of chip components (WAFGn.DE), disclosed a 27.5% decrease in core profit for the first quarter on Thursday, following a recent reduction in annual targets attributed to persistently high inventories among its clientele.
Specializing in silicon wafers essential for semiconductor chips, the company reported first-quarter earnings before interest, tax, depreciation, and amortization (EBITDA) of 90.8 million euros ($97.3 million), down from 125.2 million euros compared to the previous year. Quarterly sales also experienced a 15% decline, amounting to 343.5 million euros during the same period. CEO Michael Heckmeier remarked, “The early months of the year have been marked by subdued demand due to elevated inventories among our customers. The normalization of inventories remains uncertain at this point.”
He further noted that 2024 is anticipated to be a transitional period for Siltronic on the path to achieving sustainable growth. Despite increasing demand for wafers across end markets, the company expects continued impact from slower inventory reductions among its customers throughout the year.
Siltronic revised its 2024 forecast downward last week, projecting sales for the year to be approximately 10% lower than the previous year, with full-year EBITDA expected to fall below 300 million euros.
