Sector-Specific Conditions

WACKER predicts that economic trends in the industries relevant to our business will remain dominated by the impact of geopolitical turbulence in 2025. Sustained high energy prices and weak demand are likely to translate into lower industrial output overall. Political uncertainty will also continue to curb consumption and investment.

Moderate momentum and regional differences in the chemical industry

After the economic challenges faced in 2023 and 2024, the German Chemical Industry Association (VCI) expects to see slight recovery trends emerge in a large number of countries in 2025. At the same time, economic policy uncertainty continues to grow, and we have to expect increased protectionism and additional tariffs on imports to the US. As far as Europe is concerned, the VCI expects to see slight growth for the chemical industry as a whole in 2025, although growth rates will vary considerably from EU member state to member state. The VCI expects to see a recovery for the USA in 2025 after a weak 2024. China looks set to once again report the strongest growth rates despite dwindling momentum in the Chinese industrial sector. The country is still grappling with the real estate crisis and consumer uncertainty.

As far as Germany is concerned, the VCI is forecasting stagnating orders and sales. The association expects production to rise by 0.5 percent in the chemical and pharmaceutical sectors, a figure that falls to 0.0 percent if the pharmaceutical sector is left out of the equation. According to the VCI, both prices and sales in the chemical industry will dip by one percentage point as against 2024. Following the closure of the first few production facilities in Germany, the VCI expects other companies to follow suit and increasingly shift their production capacity abroad.

The ongoing uncertainty entails risks for WACKER’s chemical divisions, too. Nevertheless, the strength associated with our broad-based product portfolio has proved its worth during the crises seen in recent years. In 2025, despite the current dip in demand in some areas, such as the construction industry, we expect WACKER to put in a stable performance in many markets thanks to its specialty chemical products. What is more, the long-term growth trends for our business have not changed and will accelerate in some cases. We see medium-term growth opportunities in all regions due to innovations arising from today’s megatrends, like the ongoing digital transformation. Rising affluence in emerging economies is likely to bolster our sales further in countries such as China and India, and across Southeast Asia. Mounting demand for sustainable products, too, opens up further growth opportunities for WACKER. WACKER’s portfolio has many high-value products that appeal to new customer groups, spurring stronger demand from our industrial customers. Moreover, part of our product portfolio is used in highly automated, industrial manufacturing processes. In these areas, WACKER is generating significant growth, including in advanced economies.

Global construction industry trends paint a mixed picture

According to forecasts by the market research institute B+L Marktdaten GmbH, the global construction volume will stagnate in 2025. Residential-building markets are likely to report a negative trend, with construction expected to dip by 1.6 percent year over year. Developments nevertheless vary from region to region. In Asia, the residential construction volume is tipped to fall considerably in 2025. B+L is forecasting a slight decline or stagnation in western and eastern Europe. By contrast, it expects to see positive impetus and growing construction volumes in North America, the Middle East, Africa and South America. While there is still weak demand for new construction in many areas, energy-efficient building renovation will gain further momentum in a large number of markets and become the dominant market for construction material.

Automotive industry expects subdued positive development

The Association of the German Automotive Industry (VDA) expects to see stable development on the global car markets in 2025 – with underlying conditions that are likely to be similar to the previous year – although they will continue to lag behind the 2019 pre-crisis volume overall. The VDA predicts that the markets in Europe (EU, EFTA zone and the United Kingdom) and the USA will grow by 2 percent each, whereas growth in China is only tipped to come in at 1 percent due to the sustained low market volume. As far as Germany is concerned, the VDA expects to see a marked increase in new electric vehicle registrations in response to the need to reduce the CO₂ emissions of vehicles. All in all, the German market is expected to grow by 1 percent. The VDA predicts an uptick in capital expenditures in the German automotive industry, both in research and development and in plants. These will, however, focus increasingly on sites abroad, as German sites will find it virtually impossible to remain competitive on the international stage.

Semiconductor industry remains a growth market

The World Semiconductor Trade Statistics Organization (WSTS) expects sales in the semiconductor industry to rise by 11 percent in 2025. The WSTS is predicting a global volume of around US$697 billion. Developments are likely to vary considerably from segment to segment. Particularly in the segment for storage and logic chips needed, among other things, for AI applications, growth is still predicted to be in the double-digit percentage range. The WSTS expects this segment to generate sales in excess of US$400 billion in 2025. Other conventional semiconductor segments are likely to report single-digit growth rates. The Semiconductor Equipment and Materials International (SEMI) industry association is predicting 10 percent growth in silicon wafer deliveries for 2025. This strong growth in silicon wafer deliveries is expected to continue beyond 2025 to meet the rising demand for chips to be used in AI applications. In addition, new advanced packaging and high-bandwidth-memory (HBM) applications will deliver a boost in demand for silicon wafers.

Further growth is expected in all regions in 2025. North and South America, as well as Asia-Pacific, will continue to report double-digit growth year over year.

Further increase in installed photovoltaic capacity likely in 2025

Economic conditions for photovoltaics (PV) will remain dynamic and challenging in 2025. On the one hand, intense competition is creating market uncertainty. On the other, levelized costs for solar power continue to drop, making PV more competitive relative to other energy sources. Solar energy is also an important component in achieving global climate-protection targets, since it significantly reduces specific carbon dioxide emissions compared with fossil fuels. Both the cost effectiveness of PV and the political goal of keeping global warming below 1.5 °C are opening up new markets. The PV market is expected to continue growing. China will remain the world’s largest and most important market in 2025. Other markets adding large amounts of capacity are the USA, Europe, Japan, India and Brazil. Highly promising growth regions include Central and South America, Southeast Asia, the Middle East and Africa. Based on its own market surveys and those of third parties, WACKER expects newly installed PV capacity to be between 570 and 670 gigawatts (GW) in 2025.