Economic and Legal Factors

WACKER sells its products and services to virtually every industry. Although our individual business divisions are not immune to economic fluctuations, their impact and onset may vary. We are able to mitigate the impact of these fluctuations, thanks to our product portfolio and broad customer base.


The terms for orders placed with WACKER vary from division to division. Most orders received by WACKER SILICONES are short term, though a small number are long term. Goods are usually shipped within three months of receipt of order. At WACKER POLYMERS, business is based on contracts and framework agreements with terms of up to one year. Around 30 percent of incoming orders are short term. WACKER POLYSILICON concludes short- and medium-term contracts. As a rule, we aim for fixed contracts with negotiated prices and quantities. Due to varying order-placement procedures at the Group and its divisions, order-level reporting is not very meaningful and hence does not serve as an indicator in our monthly reports.

Operational Metrics as Leading Indicators of Future Developments

By referring to specific leading indicators based on operational metrics, we try to factor potential developments into our business plans and to allocate capacities accordingly. Since our operations are based on diverse businesses and markets, we use a number of leading indicators to gain insights into potential developments at each of our business divisions.

Leading Operational Indicators


Business Divisions


Leading Operational Indicator


Indicator of








Raw-material and energy price trends


Our cost trends



Orders received per month


Our capacity utilization



Short-, medium- and long-term contracts


Our capacity utilization, further market trends


Market research, talks with customers


Increase in solar capacity by country, our capacity utilization

All business divisions


Talks with customers


Our sales trend, our product quality


Market research


Market trends, product innovations





Economic Factors Impacting Our Business

The main economic factors influencing WACKER’s business remained unchanged in many areas. Accounting for around 44.1 percent of production costs, energy and raw-material costs had the largest impact in 2017.

Energy and Raw-Material Costs

As a chemical company, we belong to an energy-intensive industry and require diverse raw materials to manufacture our products. Consequently, higher energy and raw-material costs affect our cost structure. WACKER constantly strives to keep costs at a competitive level. By generating our own power at Burghausen and Nünchritz, we reduce our energy-procurement needs and, consequently, the cost risk. Amendments to the regulatory framework, such as grid charges, energy or electricity taxes or levies relating to the German Renewable Energy Act (EEG), can negatively affect WACKER’s energy costs both directly and indirectly – e. g. through higher grid charges or fees. We continually focus on improving our energy efficiency. The goal is to reduce specific energy consumption by half between 2007 and 2022. When procuring raw materials, we ensure favorable pricing and achieve price flexibility by sometimes concluding contracts with varying terms, with more scope regarding volumes, or with regular price adjustments that reflect wholesale market prices.

Exchange-Rate Fluctuations

As a rule, WACKER hedges against exchange-rate fluctuations. We hedge about half of our dollar exposure for each subsequent year with a mix of derivative currency-hedging transactions. In determining sensitivity, we simulate a 10-percent devaluation of the US dollar against the euro. Without hedging, an increase in the euro against the US dollar would have negatively impacted by around €50 million.

State-Regulated Incentive and Feed-In Tariff Programs for Renewable Energy Sources

As one of the world’s leading suppliers of hyperpure polycrystalline , we are affected by regulatory changes to incentive and feed-in tariff programs for renewable energy sources. Substantially lower prices for solar modules and cells have greatly increased the competitive advantage of solar energy over fossil fuels and other methods of generating energy. The cost of manufacturing photovoltaic products is expected to continue decreasing, which will further reduce dependence on state-regulated incentive and feed-in tariff programs over the next few years. Our assumption is that, in a few years, solar energy will get along even without special incentives, particularly in combination with cost-efficient storage possibilities. Our strong cost position, high product quality, international orientation, broad customer base and fixed supply contracts give us a competitive edge over other manufacturers. WACKER will maintain its focus on improving its specific production costs to secure its competitive position.

Legal Factors Impacting Our Business

China imposed anti-dumping and anti-subsidy tariffs on manufacturers in the USA. As things stand now, polysilicon produced at our site in Charleston, Tennessee (USA) is also affected by these tariffs. Negotiations are being conducted between China and the USA with the aim of resolving the trade dispute regarding solar products, which would also benefit WACKER. WACKER also has the option of taking up direct contact with China to discuss an exemption from tariffs. In May 2014, WACKER and the Chinese Ministry of Commerce (MOFCOM) signed a minimum price agreement for exports of polysilicon produced in Europe. MOFCOM, in turn, refrained from imposing anti-dumping and anti-subsidy tariffs on this material. In March 2017, the EU Commission extended the anti-dumping and anti-subsidy tariffs imposed on Chinese producers of solar cells and modules for a further 18 months to September 2018. In response, MOFCOM likewise extended the measures outlined in the minimum price agreement by 18 months. At the end of this period, the European Commission plans to phase out its anti-dumping and anti-subsidy tariffs.

Earnings before interest, taxes, depreciation and amortization.
After oxygen, silicon is the most common element in the earth’s crust. In nature, it occurs without exception in the form of compounds, chiefly silicon dioxide and silicates. Silicon is obtained through energy-intensive reaction of quartz sand with carbon and is the most important raw material in the electronics industry.
Hyperpure polycrystalline silicon from WACKER POLYSILICON is used for manufacturing wafers for the electronics and solar industries. To produce it, metallurgical-grade silicon is converted into liquid trichlorosilane, highly distilled and deposited in hyperpure form at 1,000 ° C.