icon
icon
icon
icon
Upgrade
upgrade
Germany's Merck (MMKGY.US) expects a rebound in its semiconductor business, boosted by AI momentum, and raises its profit guidance.
AInvestThursday, Aug 1, 2024 3:10 am ET
1min read
CTNT --
MRK --

According to CTT Finance, Merck KGaA (MCKGY.US) said that its semiconductor business has reached a turning point amid the surge of AI, and provided more details on how the company improved its earnings forecast. The German company said on Friday evening that its adjusted earnings per share for 2024 will be between €8.20 and €9.30, up from the previous forecast of €8.05 to €9.10. The German company said in a statement on Thursday that the upward revision was "based on the continued strong performance of the healthcare business and the early turn of the advanced node semiconductor material market in the AI and electronics fields."

Merck currently has three major growth engines: the Process Solutions business in the life sciences, the Innovative Medicines business in the healthcare, and the semiconductor business in the electronics. Since the end of the pandemic, the demand for testing, treatment and vaccine supplies has declined, and Merck's life sciences division has been struggling to regain its footing. The increase in demand for its semiconductor materials, which help its performance, has helped its performance to a new level. The sale of multiple sclerosis drug Mavenclad and cancer drug Bavencio has helped its performance.

Among them, the Advanced Materials business unit, which includes the semiconductor business, provides semiconductor solutions, including semiconductor materials and transport systems and services, serving the global electronics market. For example, in the advanced materials business, as a technology and market leader, Merck has more than 2,500 patents for glass materials, providing the most advanced innovative high-tech materials and solutions for the display industry; in the semiconductor field, Merck's semiconductor materials make most of the advanced mobile phones' microprocessors smaller and faster.

And in order to strengthen its supply capacity in the AI field, Merck announced in July that it planned to acquire semiconductor equipment supplier Unity-SC. Merck will first pay €155 million (US$168 million) and then pay the remaining amount after the business goal is achieved.

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.