Chip Manufacturer Orders Fall Short for Siltronic
In a recent development, Siltronic, a leading supplier of chip components, has revised its outlook for the rest of 2025. The revision comes in response to ongoing weak semiconductor demand, elevated customer inventories, and foreign exchange headwinds.
CEO Michael Heckmeier explained that growth in end markets has not led to a normalization of inventory levels at chip manufacturers. As a result, subdued wafer demand persists, contributing to the revised outlook.
Siltronic now expects revenue growth in a mid-single-digit percentage range, which is a downgrade from previous guidance that anticipated flat or higher sales compared to 2024.
Causes for the Revised Outlook
The causes for the revised outlook are multifaceted. Weak demand in the semiconductor sector, elevated inventory levels at chip manufacturers, geopolitical issues, and foreign exchange headwinds all play a part. Some volume postponements have also shifted revenues from Q3 to Q4, indicating a delayed recovery.
Impact on Revenue and EBITDA
Despite the revenue pressures, Siltronic maintained its full-year EBITDA margin guidance between 21% and 25%. The company's operational resilience was evident in the Q2 2025 results, where revenue was €329.1 million, down from €351.3 million a year earlier but above analyst estimates. EBITDA outperformed expectations with €86.4 million, and EBIT was also better than forecast.
For the third quarter, Siltronic expects lower sequential revenues, with a recovery in Q4.
Analyst Expectations
Analysts acknowledge the challenges but see potential stabilization by Q4. Jefferies analyst Constantin Hesse noted that while wafer demand remains subdued with elevated inventories, a "more constructive view" could be anticipated if a bottom forms in Q3.
Concerns remain about U.S./EU tariff impacts, but Siltronic’s diversified product mix and focus on growth markets like AI, digitalization, and electromobility provide medium-to-long-term growth drivers.
Looking Ahead
Heckmeier now expects revenue for 2025 to be in the mid-single-digit percentage range below last year’s level. Customers are hesitant in placing orders for silicon wafers, the base for chips. The development is mainly due to shifts in delivery quantities within the year, which have been largely postponed to the fourth quarter.
Despite the challenges, Siltronic is cautiously looking ahead to the rest of the year. The company's resilience is evident in its ability to maintain its EBITDA margin guidance despite revenue pressures. Analysts foresee a potential recovery in late 2025 supported by megatrends such as AI and electrification in automotive sectors.
The revised outlook for Siltronic's revenue growth in 2025 is due to a combination of factors, including weak semiconductor demand, elevated inventory levels at chip manufacturers, and foreign exchange headwinds, as stated by CEO Michael Heckmeier. In the business sector, technology plays a role as subdued wafer demand persists due to a slow normalization of inventory levels, which is a response to sluggish growth in end markets.
