Siltronic profit warning knocks European chipmakers
By Thyagaraju Adinarayan
LONDON (Reuters) - Shares of European chipmakers fell sharply on Wednesday after German silicon wafer maker Siltronic warned of a "significantly" weaker second quarter in the latest setback for a sector reeling from slowing smartphone demand.
Pointing to economic slowdown, geopolitical uncertainties and continuing inventory corrections, Siltronic said the timing of a market rebound is "not visible".
Siltronic shares fell as much as 9 percent on the STOXX 600, giving up most of their gains from a recent rally on optimism over a potential U.S.-China trade deal.
By 1449 GMT the shares were down 5.3 percent, set for their worst day since Feb. 21.
That cast a shadow over other European semiconductor companies, with AMS registering a 6.2 percent retreat and Dialog Semiconductor dipping by 0.3 percent.
Siltronic said it expects 2019 earnings per share to be "significantly" below 2018, a marked change in language from previous guidance of "slightly" lower.
"Taken in isolation, this Siltronic warning really shouldn’t be a surprise, should it?," said Mirabaud Securities analyst Neil Campling, pointing to recent warnings from Siltronic customers Samsung Electronics, TSMC and Infineon.
"A good dose of reality check is needed for the sector."
(Reporting by Thyagaraju Adinarayan; Additional reporting by Helen Reid; Editing by Josephine Mason and David Goodman)