Siltronic AG: Manufacturer of high-purity semiconductor silicon wafers

Brief summary for investors: Siltronic AG is a German, globally operating supplier to the semiconductor industry. The company produces high-purity silicon wafers, which serve as the basic starting material for almost all chips, making it a cyclical player in the technology supply chain.

Development The share price showed a significant upward trend from the end of 2020 to the beginning of 2022, driven by the global semiconductor shortage and exceptionally high demand, which generated record sales and profits in 2021 and 2022. Since the 2022 peak, a significant correction has followed, which can be explained by the waning of the chip boom and the entry into a typical industry downturn. The latest quarterly figures show a decline in sales and earnings compared to the previous year, reflecting the current economic downturn in the semiconductor market. Profitability metrics (ROE, ROA) are extremely weak in the current cycle low.

Opportunities: The industry's long-term growth drivers remain intact, driven by megatrends such as artificial intelligence, electrification (electric vehicles), and renewable energies, all of which require more powerful chips. The strategic importance of semiconductor production for Europe and the associated funding initiatives could benefit Siltronic as a local supplier. The company continues to generate substantial positive free cash flows, signaling financial stability.

Risks: The business is subject to strong cyclical fluctuations in semiconductor demand, leading to significant earnings volatility, as demonstrated by the current quarterly figures. A sustained downturn or a weak recovery in the semiconductor market continues to weigh on financial results. The high leverage ratio (debt-to-equity >1) represents a risk in a phase of declining earnings, even though liquidity (current ratio >2) currently appears solid.

Additional Notes: The latest quarterly figures suggest that the cycle bottom may not yet have been reached. The valuation does not appear overtly attractive given the market capitalization and current earnings.

Conclusion: Siltronic is an established but cyclical player in a structurally growing industry. The short-term outlook remains challenging due to the industry-wide downturn. For investors, the stock is primarily a bet on a strong recovery in the semiconductor cycle. The long-term investment thesis remains intact, but requires patience and a high tolerance for volatility.

Created October 1, 2025. This report was generated by an AI model based on data available to InsiderPie. It is not a recommendation to buy or sell any securities. AI analysis is experimental and may contain inaccuracies.