General Sector-Specific Conditions

WACKER makes products for a wide range of industrial sectors. Its main customers are the semiconductor, solar, chemical, construction, energy, electronics and textile industries.

The semiconductor market did not grow in 2008. According to Gartner, the market research institute, sales dropped 16.3% in the year under review. As a result, the global silicon-wafer market was unable to make gains either. Overcapacities and weakened demand depressed prices for both wafers and semiconductor chips.

The photovoltaic (PV) market continued its positive trend in 2008. According to a sustainability study commissioned by Sarasin, a Swiss bank, about 4 gigawatt (GW) of new capacity was installed worldwide (2007: 2.3 GW). When it comes to the installation of solar capacity, Germany, Spain, Japan and the USA lead the way (source: European Photovoltaic Industry Association – EPIA). Around 3.2 GW of the total was installed in Europe alone. The market was driven by state subsidies and the high costs of conventional fuels. Crystalline polysilicon remains the principal raw material for photovoltaic modules. This benefits WACKER, too. In 2008, our nominal capacity rose by 4,500 metric tons. Year-end nominal capacity was up 50% to 15,000 tons.

Global chemical production weakened in 2008. Demand for chemicals was particularly slow in the second half of 2008. The German Chemical Industry Association (VCI) estimates that worldwide chemical production rose just 2.2% in 2008. Chemicals worth €2.4 trillion were produced worldwide. 2008 saw Germany’s chemical industry stagnate, mainly due to lower automotive and construction-sector demand. It was only through price increases that year-on-year sales rose 3.0% to €178.8 billion.

Based on calculations presented by the Global Insight market research institute, global construction activity grew 2.5% in 2008, generating sales of over €4.4 trillion. Asia was the main growth engine. Construction activities in the US suffered from the financial and housing crisis, while Europe remained at the prior-year level. The construction-sector slowdown intensified in the second half of 2008, as reflected, for example, in WACKER’s sales trend. Only in Asia did our construction business grow from June to December 2008.

The world’s electrical and electronic goods markets suffered from sluggish demand in the year under review, having generated sales of some €2.5 trillion in 2007. Yet they remain the biggest market. The second half of 2008 in particular saw a drop in sales. They rose in the investments goods sector, such as automation and power engineering, but fell sharply in IT and communications technology.