Siltronic says demand still high as end-markets slow

German chip equipment supplier Siltronic on Thursday said demand for its wafers was still strong even as it warned a slowdown in end-markets could weigh on 2023 results.

The global technology industry has been battling a sharp and sudden downturn in demand since late 2022, as companies cut spending on tech products and services while consumers spend less on discretionary goods amid surging inflation.

The Munich-based supplier of silicon wafers for the semiconductor industry said demand for its products had remained high so far this year, but added some of its customers expected weaker orders in the first half of 2023.

Silicon wafers are vital components for semiconductors and serve as a basis for electronic chips used in products from smartphones and computers to electric vehicles and wind turbines.

German chipmaker Infineon, one of Siltronic’s biggest customers, said on Thursday it saw significantly weaker demand in areas such as smartphones, PCs and data centres in the first quarter.

Siltronic, whose customers also include Intel, TSMC and Samsung, reported a 28% jump in annual sales to a record-high of 1.8 billion euros ($2.0 billion), driven by price hikes and strong U.S. dollar.

The group, which did not provide detailed financial targets for 2023, also said it expected the high inflation to keep pushing up unit costs this year.

Its shares added 3% in the early Frankfurt trade after the earnings release. Reuters