Siltronic 2024: Semiconductor industry burdens wafer manufacturers - analysts react

Siltronic 2024: Semiconductor industry burdens wafer manufacturers - analysts react

According to a report by www.finanzen.net,
Weak demand from the semiconductor industry will continue to weigh on wafer manufacturer Siltronic in 2024. In addition, there are costs for ramping up production in the new plant in Singapore, which are weighing on the operating profit margin. In the long term, however, the MDAX group expects a lot from the billion-dollar investment. In order to reduce the increased debt and because of the dreary environment, the dividend is falling significantly to 1.20 euros per share - after 3.00 euros in the previous year. Sales in 2024 are likely to be at the previous year's level. The first six months in particular will be affected, which is why revenues in this period are likely to only be at the level of the second half of 2023. According to preliminary figures presented at the beginning of February, revenue for 2023 as a whole fell by 16 percent to 1.5 billion euros. The operating result (EBIT) is likely to fall significantly because depreciation would almost double as a result of the high investment in recent years.

Weak demand from the semiconductor industry is expected to continue to impact wafer manufacturer Siltronic in 2024, which could lead to a significant decline in sales. This could result in lower average selling prices due to the negative impact of market price competition and start-up costs for the Singapore plant. Taking into account the expected sales development and the start-up costs for the Singapore plant, the operating margin is likely to decrease in 2024. The company assumes that revenues in the first six months of 2024 should be at the level of the second half of 2023. This could lead to further pressure on the share price, as experts expect. Analysts expect market expectations to fall significantly, particularly for earnings before interest, taxes, depreciation and amortization. Siltronic's unfriendly forecast and the associated risks could lead to further sales of shares. The company also plans to cut its dividend, which could further weigh on investors.