German semiconductor equipment supplier Siltronic (WAFGn.DE) reported a 27.5% decline in first-quarter core profit on Thursday, following a recent adjustment of annual targets in response to persistently high customer inventories. The company, known for manufacturing silicon wafers essential for semiconductor chips, disclosed quarterly earnings before interest, tax, depreciation, and amortization (EBITDA) of 90.8 million euros ($97.3 million), down from 125.2 million euros in the previous year.
Sales also experienced a notable decrease, falling by 15% to 343.5 million euros during the same period. CEO Michael Heckmeier stated, “The beginning of the year remains marked by subdued demand due to elevated inventories among our customers. The timeline for inventory normalization remains uncertain.” He further remarked that 2024 is anticipated to be a transitional period for Siltronic en route to achieving sustainable growth.
Despite an uptick in wafer demand within end markets, the company foresees continued impact from slower-than-anticipated inventory adjustments by customers throughout the year. Siltronic revised its 2024 projections downwards, projecting sales to be approximately 10% lower than the previous year, with full-year EBITDA expected to fall below 300 million euros.
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