Siltronic will be impacted by weak semiconductor demand in 2024 - costs for new plant in Singapore will depress dividend

Siltronic will be impacted by weak semiconductor demand in 2024 - costs for new plant in Singapore will depress dividend

According to a report from 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.

The current problems at Siltronic are worrying. The falling demand for semiconductors and the start of new production at the Singapore factory have a direct impact on the company's margin. Analyst studies see a significant decline in earnings before interest, taxes, depreciation and amortization of up to 20 percent. The same uncertain demand can also be seen in a decline in sales and operating profit for 2024. In the long term, however, it appears that the semiconductor industry is currently passing through a cyclical low and that there could potentially be an improvement later in the year. Despite this uncertainty, Siltronic's management is rather optimistic about the coming years, as megatrends such as digitalization and electromobility are expected to have a positive impact on the company's development in the coming years.

With regard to the share price, the company's disappointing outlook resulted in a price slide of more than 10 percent. From a technical perspective, there are signs of a trend change in the stock as it has broken through short-term 21-day and 50-day lines to the downside. This indicates a downward trend. As an economic expert, I see a high risk when buying Siltronic shares and it is recommended to sell them at this time.

As www.finanzen.net reports, Siltronic's long-term outlook remains positive despite the current difficulties. Due to the lack of current price data, I cannot provide any specific financial figures here.