Siltronic ends wafer production for 'small diameters'

EQS-News: Siltronic AG / Key word(s): Restructure of Company
Siltronic ends wafer production for 'small diameters'

22.03.2024 / 14:34 CET/CEST
The issuer is solely responsible for the content of this announcement.

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Press release

Siltronic AG
Einsteinstraße 172
81677 Munich
www.siltronic.com

Siltronic ends wafer production for "small diameters"

Munich, March 22, 2024 - Siltronic AG (MDAX/TecDAX: WAF) plans to gradually
cease production of polished and epitaxial small diameter wafers at its
Burghausen site. The process, which excludes unpolished wafers, is set to be
completed in the course of 2025.

Siltronic currently produces wafers with a diameter of 300 mm, 200 mm and
wafers with smaller diameters (SD) of up to 150 mm. The SD wafer technology
was developed primarily in the 1990s and earlier. The most significant
technological breakthroughs in recent decades have been achieved with larger
diameters, which also show the highest growth potential. An average volume
growth of 6 percent per year is expected for 300 mm wafers.

"SD wafer production at Siltronic originated in Burghausen in 1968. It has
contributed to our success for many years, thanks to the outstanding work of
our employees. However, the wafer industry has evolved significantly due to
structural changes and innovations. Demand has increasingly shifted to
wafers with larger diameters and improved properties, while SD wafers are
approaching the end of their life cycle. This has led to a notable decline
in volumes, which recently had a negative impact on earnings. As this will
likely continue to intensify in the coming years, we have decided, together
with the Supervisory Board, to gradually reduce the production of small
diameters and to cease it in the course of 2025," comments Dr. Michael
Heckmeier, CEO of Siltronic AG.

"Despite this decision the Burghausen site remains of crucial importance for
Siltronic. Our global technology as well as research and development center,
the production of 300 mm wafers and 200 mm hyperpure silicon ingots as well
as a large part of our administrative functions are located here," Michael
Heckmeier continues.

Just 25 years ago, more than half of the silicon wafer market consisted of
wafers with a diameter of up to 150 mm. Today, it is less than five percent,
based on data published by the industry organization SEMI. This is the
result of customers reducing or ceasing their production of small wafers due
to the dynamic technological developments in the semiconductor industry. In
addition, competition, particularly from China, is now clearly felt in the
small diameters.


Socially responsible solutions for the core workforce

In the past financial year, SD wafers accounted for a single-digit
percentage of the Group's sales. The impact on earnings has already been
clearly negative in recent months. Approximately 400 people are employed in
the small diameters, about half of whom are on fixed-term and temporary
contracts. The aim is to reduce the core workforce in a socially responsible
manner through demographic change and partial retirement, and to avoid
layoffs for operational reasons.

"Due to structural changes in the market, we assume that SD wafers will not
recover and that their impact on earnings would be considerably negative in
the coming years. We have therefore decided to take this difficult but
necessary step. At the same time, our goal is to ensure that workforce
reductions at Siltronic are socially responsible and no layoffs are made for
operational reasons. After the end of the SD wafer production and the
subsequent dismantling measures that may be necessary, our EBITDA margin
will improve by around one to two percentage points in the medium term,"
adds Claudia Schmitt, CFO of Siltronic AG.

Contact:
Verena Stütze
Head of Investor Relations & Communications
Tel.: +49 (0)89 8564 3133
E-Mail: investor.relations@siltronic.com

Company profile:
As one of the leading wafer manufacturers, Siltronic is globally oriented
and operates production sites in Asia, Europe, and the USA. Silicon wafers
are the foundation of the modern semiconductor industry and the basis for
chips in all electronic applications - from computers and smartphones to
electric cars and wind turbines. The international company is highly
customer-oriented and focuses on quality, precision, innovation, and growth.
Siltronic AG employs around 4,500 people worldwide and has been listed in
the Prime Standard of the German Stock Exchange since 2015. Siltronic AG
shares are included in both the MDAX and TecDAX stock market indices.


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22.03.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS
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The issuer is solely responsible for the content of this announcement.

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   Language:       English
   Company:        Siltronic AG
                   Einsteinstr. 172
                   81677 Munich
                   Germany
   Phone:          +49 89 8564 3133
   Fax:            +49 89 8564-3904
   E-mail:         investor.relations@siltronic.com
   Internet:       www.siltronic.com
   ISIN:           DE000WAF3001
   WKN:            WAF300
   Indices:        MDAX, TecDAX
   Listed:         Regulated Market in Frankfurt (Prime Standard);
                   Regulated Unofficial Market in Berlin, Dusseldorf,
                   Stuttgart, Tradegate Exchange
   EQS News ID:    1864647

End of News EQS News Service
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1864647 22.03.2024 CET/CEST