Research and Development

WACKER’s research and development follows three goals. We search for solutions to our customers’ needs to contribute to their market success. We continually optimize our processes in order to be the technology leader and to be sustainably profitable. With our third goal, we concentrate on creating innovative products and applications for new markets and on serving future trends, such as increasing energy requirements, urbanization, digitization and demographic change.

WACKER ranks among the world’s most research-intensive chemical companies. R&D expenditures in 2011 came in at €172.9 million (2010: €165.1 million). The R&D rate – research and development spending as a percentage of Group sales – was 3.5 percent, thus meeting last year’s figure.

New Products Account for Higher Share of Sales

The new-product rate (sales percentage of products launched in the last five years) grew again, at 24.0 percent (2010: 23.6 percent). The increase stemmed mainly from new specifications for silicon, such as new particle sizes for solar applications and from launching production of 300 mm wafers, which are suitable for 22 nanometer design rules.

Sales Percentage of New Products¹

We generated about €6.7 million from licensing agreements in 2011 (2010: €7.5 million). WACKER’s innovative strength is reflected in the number of patents held and patent applications submitted. In 2011, we filed 138 patent applications (2010: 121). Our portfolio contains about 5,000 active patents and 2,900 patent applications currently pending.

Licensing Income

In 2011, WACKER invested €17.3 million in R&D facilities (2010: €13.4 million). As in the prior year, that is 1.8 percent of our total investments. We completed a new laboratory building at our Munich-based corporate research facility, the “Consortium für elektrochemische Industrie.” We started construction of a new laboratory building for WACKER SILICONES and Corporate Analytics at our Burghausen site. Additional investments were made in electrochemical test rigs and in pilot plants for new or optimized processes.

Investment in R&D Facilities

Breakdown of R&D Expenditures in 2011

Most of the €172.9 million in R&D costs was spent on the development of new products and production processes. We acquired only a small amount of R&D expertise from third parties in 2011.

Since 2011, externally-funded research projects have been coordinated by our Funding Management unit. The new unit reviews subsidy programs and presents participating options for a decision. Some of our current research projects were subsidized by government grants. Here are a few examples:

• Siltronic AG is a member of the EEMI450 project (European Equipment & Materials Initiative for 450 mm) sponsored by the EU. It will receive funding of about €1 million over a 21-month period until February 2012.
   
• In Germany’s joint SPINEL project (aimed at boosting the energy efficiency of photovoltaic and electronic applications through innovative electronics-grade base material), the Federal Ministry of Education and Research (BMBF) is subsidizing a Siltronic subproject.
   
• We are researching electrode materials for lithium-sulfur batteries for the LiSSi project sponsored by the BMBF. We are developing such fourth-generation high-capacity lithium-ion batteries jointly with project partners for electric mobility applications.
   
• WACKER is working on two subprojects within the integrated Carbon Capture, Conversion, and Cycling (iC4) project funded by the German Aerospace Center (DLR). The first subproject focuses on the separation and cleaning of CO₂ in order to prepare it for additional use. In the second subproject, we are researching catalysts for converting CO₂ into hydrocarbons.

R&D Costs

Research and Development at Two Levels

WACKER conducts R&D at two levels: centrally at our Corporate Research & Development department and decentrally at our business divisions. Corporate R&D coordinates activities across the company.

We have a portfolio-management process to ensure that our R&D project portfolio is transparent throughout the Group. We thus evaluate existing projects and select new ones in line with market needs.

WACKER scientists are currently working on around 244 topics based on more than 40 technology platforms. More than a quarter of these topics are key strategic projects, which account for 45 percent of all project costs (totaling €78.9 million) incurred in 2011. WACKER operates in the highly promising fields of biotechnology, energy, construction and automotive engineering, among others.

Strategic Collaboration with Customers and Research Institutes

Our business divisions conduct application-driven R&D. They focus on product and process innovations relating to semiconductor technology, silicone and polymer chemistry, and biotechnology, as well as on new processes for producing polycrystalline silicon. To achieve successful research results more quickly and efficiently, we collaborate with customers, scientific institutes and universities. In 2011, WACKER worked with more than 25 international research institutes on around 64 research projects.

Our research collaborations cover topics such as electricity storage, biotechnology, 450 mm silicon wafers and materials research for use in renewable energy production. One example: Siltronic AG and imec, a Belgian nanoelectronics research institute, signed an agreement in 2011 to collaborate on the development of silicon wafers with a gallium nitride layer (GaN-on-Si). We are thus a partner in the imec Industrial Affiliation Program (IIAP). The endeavor aims to make possible the production of next-generation solid-state illuminants (e.g. LEDs) and power semiconductors on 200 mm silicon wafers.

WACKER has also created a network of 20 technical competence centers worldwide. They liaise between sales offices and local production sites. At these centers, our specialists customize products to regional requirements, taking account of climatic conditions, national standards and local raw materials, for example.

Research Work at WACKER

As the center of WACKER’s R&D activities, the Consortium has the task of researching scientific correlations to develop new products and processes efficiently. Another Consortium task is to harness and develop new business fields that complement the Group’s core competencies.

R&D Organization

WACKER had 1,100 research and development employees in 2011, 6.4 percent of its workforce. Our scientists and engineers work on both basic research and developing new products and processes for our customers, as well as on improving existing processes. Our laboratory assistants and technical staff support implementation in our laboratories, production and pilot plants or on-site in the customers’ plants. Our other R&D personnel are based in workshops, where they design research equipment, or work in administration, for example, conducting market assessments and analyzing trends.

WACKER Wins Best Innovator Award

WACKER received Germany’s 2011 Best Innovator Award in the Chemical category for its sustainable innovation management. A.T. Kearney and German business weekly “WirtschaftsWoche” organized the competition, in which more than 100 companies participated. The Best Innovator jury confirmed that WACKER had introduced systematic processes and operated innovation management as a core area of expertise. An important point in the jury’s positive assessment was that WACKER appointed innovation managers who monitor the entire supply chain and align the company’s innovation effort in the technology and customer segments.

Selected Corporate R&D Research Topics

For their seminal work on silane synthesis, WACKER honored two of its Corporate R&D scientists with the 2011 Alexander Wacker Innovation Award. The two researchers have developed a novel analytical method that, for the first time, permits observation of processes which occur during the fluidized-bed synthesis of silicone precursors by the Müller-Rochow method. With this knowledge, WACKER can further improve its production processes and thus save millions in costs. This year’s €10,000 innovation award focused on basic research.

In the energy sector, we continued our activities in electricity storage and conversion. We are working on materials used in lithium-ion batteries to enhance this type of battery for automotive applications. WACKER is a member of the National Platform for Electric Mobility, an initiative launched jointly by the German government and industry. By 2020, there are expected to be at least one million electric vehicles on German roads.

Our Corporate R&D department developed TECTOSIL^® for encapsulating photovoltaic modules. Approved by Germany’s TÜV inspection authority, the film comprises a unique silicone elastomer that can be thermoformed, making it fast and easy to process. The film protects solar cells against mechanical and chemical stress and contains no corrosive components. The material absorbs hardly any water at all, poses an effective moisture barrier and stays permanently electrically insulating. TECTOSIL^®, which delivered initial market successes in 2011, thus increases the quality of solar modules and lengthens their useful life.

Selected Divisional Research Projects

Our WACKER BIOSOLUTIONS division focuses on the growth areas of food, pharmaceuticals and agrochemicals. We further improved our ESETEC^® process for the bacterial production of pharmaceutical proteins. This has led to the production of several such proteins in high yields to cGMP (Current Good Manufacturing Practice) standards. Some of these are already undergoing clinical tests. Using the ESETEC^® secretion system, we developed a GMP process for an antibody fragment for the FAB (Fragment Antigen Binding) product class as part of a customer project in 2011. This fragment is now being clinically tested. The antibody fragments are used in therapeutic projects and for diagnostic research purposes.

To improve the energy balance of solar cells and lower our costs, we make every effort to reduce energy consumption in polysilicon production. WACKER POLYSILICON optimized processes in its closed production loop. We have increased the purity of polysilicon through improved production steps and reduced energy consumption during deposition. The energy payback time – the length of time required by a photovoltaic cell to regenerate the energy needed for its production – has become even shorter. It now ranges from between six months (in the Sahara) to 18 months (in Northern Europe), the exact duration depending on the geographical location of the installed solar panels.

The efficiency of semiconductor devices doubles about every two years. Among the key performance-boosting parameters are the design rules achieved on a silicon wafer. They determine how many transistors fit on a device per square centimeter. Today, the semiconductor industry’s standard design rules are 45 and 32 nanometers. In the coming years, they are expected to decrease to 22 and eventually 16 nanometers. We are developing processes to produce 300 mm wafers that are used for 16 and 22 nanometer design rules. Our 300 mm sites at Burghausen, Freiberg and Singapore have been capable of producing 300 mm wafers suitable for 22 nanometer design rules since 2011.

WACKER’s GENIOSIL^® product class won Frost & Sullivan’s New Product Innovation Award in the Construction category. The alpha-silane technology in GENIOSIL^® products allows the production of powerful adhesives and sealants free of plasticizers and solvents, such as joint and cabinet sealants and assembly adhesives. GENIOSIL^® is also used in automotive and container construction and for bonding parquet floors.

Research at WACKER POLYMERS is geared toward improving production processes for dispersions and dispersible polymer powders. That saves us raw materials and energy. We enhanced the technology for our vinyl acetate monomer (VAM) production process and optimized the process control for producing dispersions based on vinyl acetate-ethylene (VAE).

In construction, our focus in 2011 was on facades, protection against moisture, and durability. We marketed a composite dispersion from the VINNAPAS^® product line that combines inorganic silica particles with organic polymer particles. This gives plasters and facade paints long-lasting colors, reduces dirt pickup and lowers the risk of algal or fungal attack.

We have expanded our range of VAE copolymer dispersions to respond to the needs of the paper and packaging industry: VINNAPAS^® XD 05 allows the formulation of adhesives without the use of film-forming agents or plasticizers. The dispersion complies with the latest environmental and safety standards and is suitable for food packaging.

Transferring Knowledge Locally

The WACKER ACADEMY serves as a forum for industry-specific knowledge transfer between customers, distributors and WACKER experts. It concentrates on construction-chemical courses (which now cover construction-sector silicone applications in addition to polymer chemistry) and on training for other industries, such as cosmetics and paints. The training centers’ proximity to our development and test laboratories promotes exchanges of views and enables participants to conduct practical on-site tests. We work with company research facilities, universities and institutes to ensure our seminars remain state of the art.

WACKER attaches considerable importance to fostering young scientific talent and close contacts with universities. In 2011, we enlisted around 66 students from 33 international universities to write theses. We additionally sponsored 13 students at the Institute of Silicon Chemistry, which was founded at the Technical University of Munich in 2006. Seven of our sponsored students completed their studies in 2011. The first graduates have started their career in R&D at WACKER.

Key Product Launches in 2011