Research and Development

WACKER’s research and development follows three goals. Firstly, we search for solutions that meet our customers’ needs and contribute to their market success. Secondly, we optimize our processes in order to be the technology leader and to operate sustainably. Thirdly, we concentrate on creating innovative products and applications for new markets and on serving future trends – such as higher energy requirements, urbanization, digitization and growing prosperity.

WACKER ranks among the world’s most research-intensive chemical companies. R&D expenditures in 2012 came in at €174.5 million (2011: €172.9 million). The R&D rate – research and development spending as a percentage of Group sales – was 3.8 percent, slightly above last year’s figure.

New Products’ Share of Sales Rises Slightly

The new-product rate (the percentage of sales accounted for by products launched in the last five years) rose slightly to 24.1 percent (2011: 24.0 percent). This was due to stronger sales for wafers of the new design rule generation, as well as for novel carpet-market dispersions.

New-Product Rate (NPR)¹

¹ Percentage of sales accounted for by products launched in the last five years

We received about €7.1 million from licensing agreements in 2012 (2011: €6.7 million). WACKER’s innovative strength is reflected in the number of patents held and patent applications submitted. In 2012, we filed 119 patent applications (2011: 138). Our portfolio contains about 5,400 active patents worldwide, as well as 2,900 patent applications currently pending.

Licensing Income

In 2012, WACKER invested €8.9 million in R&D facilities (2011: €17.3 million). At 0.8 percent of our total Group investments, R&D funding was lower than a year earlier due to long-term investment projects that had already been accounted for in 2011. Staff at our Munich-based corporate research facility (the “Consortium für elektrochemische Industrie”) moved into a new laboratory building there. And at the Burghausen site, WACKER SILICONES opened a new laboratory building for applications technology, R&D and quality assurance. Our Analytics unit is now working in this building, as well.

Additional R&D investment activity included the development of high-throughput screening for efficient protein production with ESETEC^®, and the creation of simulation software that can predict the effects of process changes. We invested in laboratory facilities and pilot plants to enable process optimization in the production of VAE (vinyl acetate-ethylene copolymer) dispersions and vinyl acetate monomer (VAM), for instance, as well as in research on lithium-ion batteries. We opened a laboratory at Burghausen in which we develop test formulations from our raw materials for the food industry, to name one example.

Investment in R&D Facilities

Breakdown of R&D Expenditures

R&D Costs

Most of the €174.5 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 2012, spending some €250,000. This amount went to a total of six licensors, with four-fifths being used to acquire two particular know-how licenses, for which we paid €120,000 and €80,000 respectively.

Some of our research projects in 2012 were subsidized by government grants. Here are a few examples:

• Our participation in the National Platform for Electric Mobility (NPE, a joint initiative run by the German government and industry) has resulted in a number of collaborative projects involving our Central R&D facility (Consortium). Some of these projects are publicly funded, one example being the SafeBatt project to develop lithium-ion batteries that are fireproof and protected from explosion (making them intrinsically safe), which is supported by the Federal Ministry of Education and Research (BMBF). Another example is the alpha-Laion project funded by the Federal Ministry of Economics and Technology (BMWi), in which we conduct research on high-energy lithium batteries for electric vehicles.
• In a project funded by the Federal Ministry of Education and Research (BMBF), WACKER SILICONES is developing electrically-active silicone-based polymers for use in energy production.

Our business divisions and Central R&D have also applied for government research grants for further projects that are still in the approval phase. Our externally-funded research projects are coordinated though our Grant Management office, which evaluates candidate programs, submits our project proposals and manages contacts with funders.

Research and Development at Two Levels

WACKER conducts R&D at two levels: centrally at our Corporate Research & Development department and locally at our business divisions. Corporate R&D coordinates activities on a company-wide basis and involves other departments, such as engineering (during process development). We also use a portfolio-management process to keep our R&D project portfolio transparent throughout the Group. In 2012, we enhanced the Project System Innovation (PSI) program we use to manage our innovation portfolio. The improvements include better risk recognition and a greater focus on sustainability. Now, when we do research on new products, we also systematically examine the use of materials, energy and water, and we assess ecotoxicity over the entire product lifecycle.

WACKER scientists are currently working on around 260 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 €77 million) incurred in 2012. WACKER operates in highly promising fields, ranging from energy, construction and automotive engineering to household and personal-care products, food and biotechnology.

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 institutions and universities. In 2012, WACKER worked with more than 56 international research institutes on 59 research projects.

Our collaborative efforts cover topics such as electricity storage, biotechnology, process simulation and materials research for renewable energy production. One example is in the field of lithium-ion batteries, where Central R&D works with institutions including the University of Münster.

WACKER has also created a worldwide network of 21 technical competence centers worldwide that 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, Corporate R&D 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 1,008 research and development staff in 2012, which represents 6.2 percent of the Group’s employees. Our scientists and engineers conduct basic research, develop new products and processes, and improve existing processes. The lab and technical staff at our R&D, applications-technology and production-support facilities work in our laboratories and in our production and pilot plants, or on-site at our customers’ plants. Our other R&D personnel construct research equipment in our workshops, or perform administrative functions in such fields as market research and trend analysis.

Alexander Wacker Innovation Award

In recognition of a product innovation at WACKER POLYMERS, three of the division’s employees were presented with WACKER’s 2012 Alexander Wacker Innovation Award. The researchers developed two novel dispersions based on vinyl acetate-ethylene copolymers. These kinds of dispersions are increasingly used for coating paper, especially in the USA. A noteworthy feature of these coatings is that they make the print on cardboard packaging particularly durable and vividly colored. Compared with acrylate-based products, the two VINNAPAS^® dispersions EF 101 and EF 575 offer customers an alternative technology with significant cost advantages.

Selected Corporate R&D Research Topics

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 and consumer-product applications. We are also focusing on lightweight construction, as lighter materials can be used to conserve raw materials and energy, for instance in the automotive and aviation industries. In these fields, we are developing building blocks for use in composites.

In one of our Corporate R&D projects, we produced modified plastics and launched the VENTOTEC^® brand on the market. Today, technological innovation calls for ever better materials – plastics that can be produced cost-efficiently and withstand extreme temperatures without becoming brittle; components that offer higher performance yet are still lighter in weight. Often, there is a need for properties that cannot be realized in a single material. The solution is VENTOTEC^®, which uses core-shell technology to modify impact strength. This powder-form additive is composed of spherical particles that have a low-modulus silicone core and a hard outer shell of organic polymer. Only small quantities of VENTOTEC^® are needed to increase the toughness of the hardened resin significantly. Because the silicone particles retain their elasticity down to around -130°C, this effect remains intact even at very low temperatures.

Selected Divisional Research Projects

WACKER SILICONES has been working on further optimizing the production processes for methylchlorosilane and HDK^®, thereby also reducing production costs. Another focus at this division was on tailoring solutions to specific customer requirements. We have not only developed silicone products for use in hydroelectric power generation, but have also launched new items for the personal-care market, and new GENIOSIL^® product grades for the adhesives industry.

Focusing on sustainability, WACKER POLYMERS launched projects to free its product portfolio of poorly biodegradable substances. We have also eliminated additives that could release formaldehyde. Another key objective at this division was to continue enhancing the production processes for dispersions and dispersible polymer powders. That saves us raw materials and energy. We have made improvements in our production processes for vinyl acetate monomer (VAM) and for vinyl acetate-ethylene (VAE) dispersions.

WACKER BIOSOLUTIONS optimized its ESETEC^® process for pharmaceutical proteins. In a feasibility study, we did research on how to produce a PASylated human growth hormone at high yields. (PAS denotes the amino acids proline, alanine and serine collectively.) PASylation^® technology enables the development of biopharmaceuticals that are more compatible, longer lasting and do not have to be administered as frequently. Our facilities for food, pharmaceuticals and agrochemicals are expanding. We have identified new cyclodextrin applications in areas such as dairy products and reduced-fat foods, and received European Commission approval to use gamma-cyclodextrin as a food and beverage ingredient. The addition of cyclodextrin can mask a bitter taste in green-tea products, for example. Cyclodextrins enhance the bioavailability of ingredients such as curcumin and coenzyme Q10. WACKER BIOSOLUTIONS also collaborated with customers to launch new plant-protection agent projects.

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 continued to reduce energy consumption during deposition and conversion.

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 32 and 22 nanometers (nm). In the coming years, they will decrease to 16 and eventually 11 nm. We are developing processes to produce 300 mm wafers that are used for 16 and 11 nanometer design rules. The first 16 nm products are in customer approval processes. We have evaluated the technology for 11 nm wafers and produced the first experimental products.

Transferring Knowledge Locally

Our WACKER ACADEMY locations serve as a collection of forums for industry-specific knowledge transfer between customers, distributors and WACKER experts. The focus is 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 the sharing of ideas 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 2012, we enlisted around 31 students from 19 international universities to write theses. We additionally sponsored 19 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 2012. Other graduates are now pursuing careers in R&D at WACKER, while still more are about to join the Group.