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Siltronic AG continued to be affected by weak demand in Q1 2024 due to increased customer inventory levels, with sales declining nearly 4 percent compared to Q4 2023, primarily due to product mix shifts.
“The start of the year continues to be characterized by weak demand due to increased inventories at our customers. It is still not possible to predict when inventories will return to a normal level. Therefore, 2024 will probably be a transition year on the way to profitable growth,” comments Dr. Michael Heckmeier, CEO of Siltronic AG on the development.
Business Development in Q1 2024
Siltronic generated sales of EUR 343.5 million in Q1 2024, which corresponds to a decrease of 3.7 percent compared to Q4 2023. This development is in line with expectations. While the wafer area sold and sales prices remained nearly stable compared to the previous quarter, the product mix in particular had a slightly negative impact. The Euro/US dollar exchange rate, which averaged 1.09 in Q1 2024 (Q4 2023: 1.08), also impacted sales slightly on a quarterly basis.
Cost of sales decreased by 1.4 percent compared to the previous quarter and therefore could not be reduced at the same level as sales.
As a result, the gross profit in Q1 2024 decreased by EUR 9.1 million compared to the previous quarter. The gross margin decreased from 22.2 percent (Q4 2023) to 20.4 percent (Q1 2024).
The decrease in gross profit was largely offset by positive FX effects and lower selling, administration, and research and development expenses. The FX effects reported in the balance of other operating income and expenses amounted to EUR 5.4 million after EUR -0.8 million in Q4 2023.
EBITDA in Q1 2024 (EUR 90.8 million) was therefore on par with the previous quarter (Q4 2023: EUR 91.1 million). Due to the decline in sales, the EBITDA margin improved from 25.5 percent to 26.4 percent.
EBIT amounted to EUR 36.0 million in Q1 2024 compared to EUR 36.8 million in Q4 2023. The marginal decline is mainly due to a higher depreciation.
Despite continued weak demand, a EUR 27.7 million result for the period was achieved after EUR 32.3 million in the previous quarter. Of this amount, EUR 25.7 million is attributable to the shareholders of Siltronic AG, resulting in earnings per share of EUR 0.86.
Development of equity, net cash flow and net financial assets
With an equity of EUR 2,152.9 million as of March 31, 2024 and an equity ratio of 46.5 percent, Siltronic continues to have a solid balance sheet quality (December 31, 2023: 46.6 percent).
Loan liabilities increased by EUR 53.4 million, mainly due to the partial draw down of a loan. In addition, other provisions and liabilities increased by EUR 31.4 million, mainly due to an investment grant received.
The decrease in cash flow from operating activities compared to the previous quarter is mainly due to reporting date effects in the inflow of trade receivables. In Q4 2023, payments were received from customers shortly before the reporting date, and in Q1 2024 shortly after the reporting date.
In the quarter under review, Siltronic made net payments of EUR 198.7 million for capex including intangible assets. Due to the high capex at the end of 2023, some of which was not due for payment until 2024, capex payments significantly exceeded additions to the balance sheet in the quarter under review. The payments and balance sheet additions were mainly related to the new fab in Singapore.
Due to the change in working capital and the continued high level of investments, both the free cash flow of EUR -137.2 million and the net cash flow of EUR -158.4 million were negative in Q1 2024. As a result, cash and cash equivalents and financial investments decreased by EUR 88.9 million, while loan liabilities increased at the same time. Accordingly, net financial debt increased from EUR 355.7 million at the end of 2023 to EUR 501.0 million as of March 31, 2024.
Outlook: Mid-term targets for 2028 unchanged, 2024 will be a transition year
Driven by several megatrends, Siltronic expects a significant increase in demand in the medium and long term. However, the start to the 2024 financial year was subdued. Although demand for wafers is increasing in the end markets, Siltronic continues to face weak demand in the coming quarters. This is due to higher customer inventories and the associated further postponement of delivery volumes, which will now primarily affect the second half of the year. Customers’ persistently high inventories are recovering slower than originally expected. As a result, the impact of these elevated inventories is expected to be felt throughout 2024, although visibility remains limited.
In an ad hoc announcement on April 26, 2024, Siltronic therefore adjusted its forecast and expects Group sales to be roughly 10 percent below the previous year. This is mainly due to lower volumes and both slightly negative FX- (EUR/USD 1.10) and price effects. The EBITDA margin is forecast to be between 21 and 25 percent. Capital expenditure will decrease compared to the previous guidance and is expected to be slightly below EUR 550 million. Depreciation and amortization is expected to be below EUR 300 million.
Klaus Buchwald to be appointed Chief Operating Officer as early as June 1, 2024
Klaus Buchwald will take up his position as a new member of the Executive Board and Chief Operating Officer (COO) of Siltronic AG on June 1, 2024, two months earlier than originally announced. He will be responsible for Operations and Supply Chain, Engineering as well as IT.
Original – Siltronic
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The U of A celebrated a milestone with the topping-out of the Multi-User Silicon Carbide Research and Fabrication Facility.
More than 100 students, faculty, state leaders and citizens were on hand to sign the steel topping-out beam and hear remarks from Kim Needy, dean of the College of Engineering, and Alan Mantooth, Distinguished Professor of electrical engineering.
The new semiconductor research and fabrication facility will produce microelectronic chips made with silicon carbide, a powerful semiconductor that outperforms basic silicon in several critical ways. The facility will enable the federal government – via national laboratories – businesses of all sizes and other universities to prototype with silicon carbide, a capability that does not presently exist elsewhere in the United States.
Work at the research and fabrication facility will bridge the gap between traditional university research and the needs of private industry and will accelerate technological advancement by providing a single location where chips can go from developmental research to prototyping, testing and fabrication.
The 21,760-square-foot facility, located next to the National Center for Reliable Electrical Power Transmission at the Arkansas Research and Technology Park, will address obstacles to U.S. competitiveness in the development of silicon-carbide electronics used in a wide range of electronic devices, circuits and other consumer applications. The building will feature approximately 8,000 square feet of clean rooms for fabrication and testing.
Education and training within the facility will also accelerate workforce development, helping supply the next generation of engineers and technicians in semiconductor manufacturing.
Original – University of Arkansas
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To provide higher efficiency and power density for telecom, industrial, and computing applications, Vishay Intertechnology, Inc. introduced its first fourth-generation 600 V E Series power MOSFET in the new PowerPAK® 8 x 8LR package.
Compared to previous-generation devices, the Vishay Siliconix n-channel SiHR080N60E slashes on-resistance by 27 % and resistance times gate charge, a key figure of merit (FOM) for 600 V MOSFETs used in power conversion applications, by 60 % while providing higher current in a smaller footprint than devices in the D²PAK package.
Vishay offers a broad line of MOSFET technologies that support all stages of the power conversion process, from high voltage inputs to the low voltage outputs required to power the latest high tech equipment. With the SiHR080N60E and other devices in the fourth-generation 600 V E Series family, the company is addressing the need for efficiency and power density improvements in two of the first stages of the power system architecture — power factor correction (PFC) and subsequent DC/DC converter blocks.
Typical applications will include servers, edge computing, super computers, and data storage; UPS; high intensity discharge (HID) lamps and fluorescent ballast lighting; telecom SMPS; solar inverters; welding equipment; induction heating; motor drives; and battery chargers.
Measuring 10.42 mm by 8 mm by 1.65 mm, the SiHR080N60E’s compact PowerPAK 8 x 8LR package features a 50.8 % smaller footprint than the D²PAK while offering a 66 % lower height. Due to its top-side cooling, the package delivers excellent thermal capability, with an extremely low junction to case (drain) thermal resistance of 0.25 °C/W.
This allows for 46 % higher current than the D²PAK at the same on-resistance level, enabling dramatically higher power density. In addition, the package’s gullwing leads provide excellent temperature cycle capability.
Built on Vishay’s latest energy-efficient E Series superjunction technology, the SiHR080N60E features low typical on-resistance of 0.074 Ω at 10 V and ultra low gate charge down to 42 nC. The resulting FOM is an industry-low 3.1 Ω*nC, which translates into reduced conduction and switching losses to save energy and increase efficiency in power systems > 2 kW.
For improved switching performance in hard-switched topologies such as PFC, half-bridge, and two-switch forward designs, the MOSFET released today provides low typical effective output capacitances Co(er) and Co(tr) of 79 pF and 499 pF, respectively. The package also provides a Kelvin connection for improved switching efficiency.
The device is RoHS-compliant and halogen-free, and it is designed to withstand overvoltage transients in avalanche mode with guaranteed limits through 100 % UIS testing.
Original – Vishay Intertechnology
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Magnachip Semiconductor Corporation announced financial results for the first quarter 2024.
YJ Kim, Magnachip’s Chief Executive Officer, commented, “In Q1 we started the initial revenue ramp for OLED DDICs for the after-service market, and we were awarded two new designs targeted for a leading China smartphone OEM and also for a leading European EV maker. Our Power Analog Solutions (PAS) business revenue grew 12% sequentially driven by smartphones, e-motors, consumer appliances and server power applications, and we now are launching a slate of next-gen power products to help sustain our momentum. We also are encouraged that the power channel inventory showed signs of improvement in the first quarter.”
YJ continued, “Looking forward, we expect sequential revenue growth in Mixed-Signal Solutions (MSS) and PAS to continue in Q2 and we reiterate our prior full-year guidance for double digit growth in both MSS and PAS businesses.”
Financial Highlights
- Q1 consolidated revenue was $49.1 million, within our guidance range of $46-51 million.
- Q1 standard product business revenue was up 10.6% sequentially.
- Q1 consolidated gross profit margin was 18.3%, within our guidance range of 17-20%.
- Q1 standard product business gross profit margin was down 170 basis points sequentially, mostly due to lower Gumi fab utilization driven by the wind-down of Transitional Foundry Services.
- Ended Q1 with $29.7 million in long-term borrowing and $171.6 million in cash.
- Repurchased approximately $4.1 million or 0.6 million shares during the quarter.
Operational Highlights
- Secured a new high-end smartphone OLED DDIC design for a top tier China smartphone OEM.
- Secured a new EV automotive OLED DDIC design win for a leading European automaker.
- Began operations of our new China entity called Magnachip Technology Company (MTC). Our China headquarters is now up and running.
- Started initial ramp in Q1 for our first-generation OLED DDIC chip for China for the after-service market.
- Captured our first medium voltage MOSFET automotive design-win for an electric cooling fan with a China-based SUV supplier, as well as an additional automotive power steering related win in Korea.
- Began to see initial signs of inventory reductions in the distribution channel for our Power Analog Solutions products.
Original – Magnachip Semiconductor
- Q1 consolidated revenue was $49.1 million, within our guidance range of $46-51 million.
