Silitronic AG (WAFGn.DE): Wafer Recovery Gaining Traction in Q2, but Pricing Remains the Key Debate; Neutral

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31 Jul 2026 10:29:50 ET │ 15 pages

Siltronic AG (WAFGn.DE)

Wafer Recovery Gaining Traction in Q2, but Pricing Remains the Key

Debate; Neutral

CITI'S TAKE

Neutral

Price (31 Jul 26 14:53)

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from €105.00

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Siltronic’s 2Q26 results reinforce our view that the wafer market recovery

is gaining traction, supported by improving 300mm AI-related demand

and a strengthening volume outlook. However, the recovery remains

volume-led, with mgmt. continuing to highlight that wafer pricing remains

below reinvestment levels despite improving utilisation and customer

demand. While the ongoing FabNext ramp should support margin

improvement, we expect a broader earnings re-rating to require clearer

evidence of sustainable wafer ASP recovery. Retain Neutral.

Demand recovery improving, but end-market trends remain mixed — Siltronic's

Q2 update pointed to a steadily improving demand environment, with wafer

shipments increasing sequentially and management modestly raising its FY26

revenue outlook to a low-to-mid-single-digit decline from a mid-single-digit

decline. The recovery continues to be led by 300mm wafers, supported by AI-related

demand in servers, advanced logic and memory, while customer engagement around

incremental volumes and future supply agreements has increased. At the endmarket level, the overall wafer area consumption growth assumption remains

unchanged at around 7%, but the mix has become more AI-centric versus the Q1

outlook. Server wafer area growth was raised to +46% (from +44%), while industrial

growth was also increased to +13%, reflecting stronger data-centre and

infrastructure-related demand. Offsetting this, smartphone and PC expectations

were lowered further (to -11 and -10% respectively), as memory capacity continues

to be prioritised towards AI applications.

Pavan Daswani, CFAAC

Volume momentum positive, while pricing remains uncertain — Management

flagged positive pricing developments in selected 300mm spot transactions and a

stronger demand outlook for 200mm wafers in H2, but emphasised that current

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