Siltronic posts profit amid polysilicon boom

SAN JOSE, Calif. — Amid strong demand for its polysilicon products in the solar market, Wacker-Chemie AG’s silicon wafer unit on Friday (March 17) said that it returned to profitability on growing sales for 2005.

The silicon wafer unit, Siltronic AG (Munich, Germany), reported an EBIT of 5.8 million euros ($7.1 million) in 2005, compared to a loss of 100.7 million euros ($122.8 million) in 2004.

Silitronic generated sales of 925 million euros ($1.1 billion) in 2005, up 13.7 percent from 813.7 million euros ($992.5 million) in 2004.

In the 300-mm wafer segment, the unit’s volume growth was far above the overall average at 69 percent. And it benefited from a series of cost-cutting measures over the years.

For example, the closure of two 200-mm production sites in 2003 and 2004 boosted capacity utilization rates at lines in Singapore, Hikari, Japan, and Portland, Ore., in 2005, according to the company. Another turnaround factor was the expansion of 300-mm capacity at its factory in Freiberg, Germany.

It’s been a topsy-turvy time for Siltronic, which shelved its initial public offering in Germany in 2004. Despite the growth, the company has been losing ground to other silicon wafer makers, including MEMC, SEH and SUMCO.

Wacker Chemie is also said to be in talks to sell its wafer making subsidiary, Siltronic, with U.S. investment firm Francisco Partners being among interested parties, according to a recent report.

The Wacker family recently sold a portion of its stake in Wacker Chemie to investment bank Morgan Stanley, according to another report. To confuse matters, Wacker-Chemie on Friday said it plans to sell shares to the public next month to fund faster growth.

Meanwhile, in 2005, Wacker’s polysilicon unit, which is reported as a separate group, increased its sales by 11.3 percent to 288.1 million euros ($351.4 million), up from 258.8 million euros ($315.7 million) in 2004. EBIT reached 66.2 million euros ($80.7 million) in 2005, up 41.8 percent from 2004.

Growth was fueled by photovoltaic demand. With its production plants running at full capacity, the unit continued expanding its production capacity to meet the huge rise in polysilicon demand.

Completion of “expansion stage 6” is scheduled for the end of 2007 and should increase its nominal capacity by a further 3,500 metric tons annually. Together with other ongoing expansion measures, the company’s nominal capacity is expected to exceed 9,500 tons of polysilicon per year from 2008 on.