Siltronic sees sales boost from AI and electromobility

By Andrey Sychev

(Reuters) -Siltronic expects sales and profitability to grow significantly in the next five years thanks to mega-trends such as artificial intelligence, digitalization, and electromobility, the company said in a strategy update on Thursday.

The mega-trends "will lead to a strong increase in demand for semiconductors and therefore also for wafers," the company, which provides silicon wafers to the semiconductor industry, said in a statement.

The German chip equipment maker now expects sales to exceed 2.2 billion euros ($2.41 billion), and earnings before interest, taxes, depreciation, and amortization (EBITDA) margins to reach the high 30-percentage area by 2028.

Some brokers, however, said the new guidance came below expectations.

Siltronic shares opened 4% lower, but then pared losses and were down 2% at 0830 GMT.

"While the guided growth is slightly below our expectations, this confirms the solid positive trend for the usage of wafers, as anticipated," Jefferies analysts wrote in a note.

Compared to this year's sales guidance, the forecast would correspond to an increase of more than 40% in revenue.

However, in the first half of 2024, the company sees sales being burdened by high inventory levels with customers and start-up costs of its new production site in Singapore.($1 = 0.9113 euros)

(Reporting by Andrey Sychev, Editing by Linda Pasquini and Raju Gopalakrishnan)