We supply products to a wide range of industries. Our main customers are in the semiconductor, photovoltaic, chemical, construction, electrical-engineering and electronics sectors.

Rising Demand for Semiconductors and Silicon Wafers

The semiconductor industry grew in 2014. This increase largely stems from strengthening demand for chips for mobile end-user devices. Market researchers at Gartner expect sales for 2014 to be up some 7 percent at US$ 8.3 billion. Increased volumes year on year saw silicon-wafer sales rising 10.9 percent to US$ 8.8 billion (2013: US$ 7.9 billion). Silicon-wafer demand, in terms of surface area sold, is estimated at about 66 billion cm², up 9.8 percent on 2013. There was above-average growth in the 300 mm wafer market. Siltronic’s market share remained at about 15 percent.

Newly Installed PV Output Continues to Rise

The photovoltaic market continued on its growth trajectory in 2014. According to various market studies and our own estimates, almost 46 gigawatts (GW) of capacity were installed worldwide (2013: 40 GW), up 13 percent on the prior-year period. The focus of new installations shifted away from Europe toward Asia and the USA. China and Japan are the key markets here. Germany, on the other hand, continued to lose importance as a PV market, with only around 100 MW being installed there a month. According to Germany’s Federal Network Agency, the installed output reached 1.9 GW (2013: 3.3 GW).

Market conditions remained tight in 2014. Global production capacities still outstrip demand. Given the strong price pressure in nearly all supply-chain stages, further companies became insolvent or exited the market. The restructuring or termination of contracts meant that WACKER retained advance payments and received damages.

Additionally, markets were also unsettled by anti-dumping proceedings by the European Union against Chinese solar companies and by the Chinese Ministry of Commerce (MOFCOM) against polysilicon manufacturers in the USA, South Korea and Europe. WACKER and the Chinese Ministry of Commerce have resolved the issue of polysilicon exports to China. An agreement to this effect was signed by both parties in Beijing in March 2014. WACKER has undertaken not to sell polysilicon produced at its European sites below a specific minimum price in China. MOFCOM, in return, has refrained from imposing anti-dumping and anti-subsidy tariffs on this material. The agreement took effect on May 1, 2014, and is valid until the end of April 2016. Its provisions ensure that WACKER can continue to offer its polysilicon at standard market conditions in China in the future. Overall, WACKER sold 51,000 metric tons of polysilicon in 2014 – an unparalleled quantity. During Q2 2014, prices recovered compared with the prior-year level.

Installation of New PV Capacity in 2013 and 2014

Chemical-Industry Growth Slows – WACKER’s Chemical Divisions Report Good Sales Trend

In 2014, the chemical industry still did not show the momentum of previous years. Prices for chemical products decreased. Global consumption (including pharmaceuticals) in 2013 totaled € 4.2 trillion, with Asia accounting for over 50 percent, Europe 20 percent, and the Americas about 25 percent. The German Chemical Industry Association (VCI) expects chemical production in Germany to expand by 1.5 percent. Capacity utilization at German chemical plants was 84.5 percent. While prices dropped slightly, sales edged up 0.5 percent to € 193.6 billion (2013: € 187.7 billion). Growth was primarily driven by Germany. Business outside Germany did not match expectations. China remains the most interesting growth market. In 2013, chemical exports to China increased to € 5.6 billion. WACKER’s chemical divisions posted higher year-on-year sales. The increase was achieved through volume gains and slightly better prices in a number of product segments. WACKER SILICONES recorded good demand for silicone products for construction, electronics, consumer goods, the automotive sector and medical technology, as well as other industrial applications. WACKER POLYMERS increased its sales of dispersible polymer powders and VAE dispersions. At WACKER BIOSOLUTIONS, sales of polyvinyl acetate solid resin for manufacturing gumbase rose as a result of price increases.

Price trends for our key raw materials were not uniform in 2014. Vinyl acetate monomer (VAM) became much more expensive. Silicon-metal prices rose slightly. After climbing in Q1 2014, the price of methanol dropped during the year to below 2013 levels. Ethylene prices were just under the prior-year level.

Construction Industry Grows in 2014

According to market research institute B+L Marktdaten GmbH, the global construction industry grew by 2.6 percent in 2014 to US$ 8.3 trillion (2013: US$ 8.1 trillion). Construction contracts in Europe stayed at a low level, marginally falling by 0.1 percent in Western Europe. Sales in the German construction industry were US$ 329.3 billion in real terms (2013: US$ 323.8 billion). Eastern Europe saw a decline in construction contracts of 1.2 percent. China – at US$ 1.8 trillion – remains the largest market worldwide. In the USA, the property market continued to stabilize in 2014, spurring the construction industry, where volumes rose by 4.0 percent. Asia posted an increase of 3.4 percent.

In construction applications, WACKER POLYMERS increased its sales further. Growth in dispersible polymer powders is driven by the market for dry-mix mortar in such countries as the USA and India and in Eastern Europe. In these areas, we achieved double-digit sales growth. Sales also rose by a high single-digit percentage in Western Europe and Asia. Construction business profited from a mild winter in Europe and from the recovery of the US real-estate market. Overall, we sold around 25,000 additional metric tons to the construction industry. As for dispersions, WACKER POLYMERS performed very strongly in Asia, particularly in India, where our sales of dispersions for environmentally sound adhesives rose 50 percent. In China, too, sales increased by a double-digit percentage. Alongside adhesives and sealants, water-based, environmentally friendly coatings represent a key market for our VAE dispersions.

At WACKER SILICONES, construction-application sales were up by 4 percent – with the three product segments of building protection, sealants and adhesives, and silane-modified polymers all posting gains. Business with hybrid silicone products performed particularly well. In the case of hybrid polymers, which are used for example in wood-flooring adhesives, we increased sales by around 40 percent year on year. In its largest segment, sealants and adhesives, WACKER SILICONES grew almost 5 percent. Following declines a year earlier, sales for 2014 climbed again in Germany (8 percent) and the rest of Europe (7 percent). Sales growth in Asia rose 4 percent. Our performance in India was particularly strong at 16 percent. Sales in China grew by 8 percent.

Electrical and Electronics Industries Grow in Emerging Markets

With global sales of over € 3.8 trillion, the electrical and electronics industries continued their uptrend in 2014. The German Electrical and Electronic Manufacturers’ Association (ZVEI) estimates worldwide growth at 5 percent for 2014. China and the other emerging markets are the main driving force here, expanding by around 7 percent. In Germany, the fifth largest market worldwide, sales increased slightly. Based on ZVEI data, sales amounted to about € 171.9 billion (2013: € 167 billion). WACKER has three business divisions that supply customers in the electrical and electronics industries. Siltronic achieved stronger year-on-year sales to semiconductor customers, due to increased volumes. WACKER POLYSILICON sold around 10 percent of its polysilicon capacities to customers in the electronics industry in 2014.

WACKER SILICONES posted a sales increase of 10 percent for this market. We generated higher sales in media-resistant potting compounds, in highly specialized silicone rubber grades and silicone gels for automotive electronics, and in semiconductor-grade silanes. Transport and infrastructure projects in China continued to positively impact business in coatings for electric and traction motors. Pressure from Asian competitors remained, slowing down cable and insulator business in Europe. Our sales rose between 4 and 10 percent in all three key sales regions – Europe, the USA and Asia.