Wacker Chemie shares plummet over wafer worries

21 January 2008 12:30  [Source: ICIS news]

LONDON (ICIS news)--Wacker Chemie’s share price has plummeted over 30% this year over concerns about semiconductor wafer demand, citigroup analysts said in a report released to the media on Monday.

 

Lower gross domestic profit and increased methanol prices will be a challenge for silicones, the analysts added.

 

But Citigroup believes fears about silicon wafer business Siltronic are overdone.

 

“A downturn, if there is one, will hit 200mm demand, where Wacker has a relatively lower exposure and can sell spare ingots into the solar market,” analysts said.

 

Citigroup has given the company a “buy” rating and set its target price for shares at €220.

 

“We are confident of 40% EBITDA (earnings before interest tax depreciation and amortization) growth in Wacker’s Polysilicon operations. Demand of solar energy is booming, with polysilicon availability the key constraint on growth,” it said.

 

Citigroup has adjusted Wacker Chemie’s earnings per share to €9.12 ($13.41) from €9.01.

 

"Structural growth in the polysilicon and polyers division more than offset Euro and methanol price challenges," it added.

 

Wacker Chemie’s price was down 7.46% to €131.01.

 

($1 = €0.68)

By: Lucy Craymer
+44 20 8652 3214

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