Siltronic

Strategy

Siltronic pursues three strategic priorities: maintaining its role as a technology leader; growing at least as fast as the market; and steadily improving variable and fixed cost structures (through improved processes, procedures and productivity), thereby keeping its competitiveness. To meet the latest design rules, Siltronic will continue to mainly invest in product developments, in measures that enhance quality, and in 300 mm technology. The importance of 300 mm business will increase, and Siltronic is well-positioned to benefit from this development. The regional sales focus is on Asia. At its lead sites, Siltronic concentrates on the production of specific silicon-wafer diameters. This policy is designed to improve plant utilization and cost structures, while also consolidating expertise in the manufacture of individual diameters. Following the decision to close its Hikari site in Japan, Siltronic will be optimizing capacity utilization of 200 mm silicon-wafer facilities. Beside achieving better fixed-cost coverage for the production of these wafers, Siltronic can realize economies of scale and improve its cost position here.

Sales Down on Previous Year

Siltronic posted a year-on-year sales decline, due mainly to 2011’s weak fourth quarter. Sales fell 3.2 percent to €992.1 million (2010: €1.02 billion). In Q4 2011, inventory-reduction measures by customers and slack demand for silicon wafers impacted our sales volumes. While 300 mm wafer business grew during full-year 2011, there was a slowdown in the 200 mm market and, above all, in the small-diameter wafer segment. Regionally, sales in Germany advanced by more than 5 percent. Sales revenue in Asia remained at the prior-year level, while the Americas and Europe each saw a drop of over 5 percent.

EBITDA, too, declined against 2010. It was 43.9 percent lower, at €49.2 million (2010: €87.7 million). The figure includes expenses for the closure of the Hikari site, which reduced EBITDA by some €50 million. Without this charge, EBITDA would have shown a year-on-year rise of €11.1 million. The EBITDA margin was 5.0 percent (2010: 8.6 percent).

Substantial Rise in Investments

There was a substantial rise in Siltronic’s investments in 2011. They came in at €128.1 million (2010: €75.5 million) – 69.7 percent higher than a year earlier. Investments focused on the continued expansion of our Singapore-based joint venture with Samsung Electronics for 300 mm wafer production, on new manufacturing facilities for epitaxial wafers in Germany, and on improved technologies.

Siltronic’s employee total was 4,974 as of December 31, 2011 (December 31, 2010: 5,025).