Siltronic's Q2 Gains Are Real-but 200 mm and Price Pressure Still Trap the Stock

Siltronic's Q2 improved, but the 2026 earnings backdrop is still weak

Siltronic's second quarter was better than feared, but declining 200 mm volume and continued price pressure outside long term agreements still point to another earnings decline this year. The company is also clearly moving out of the most obvious distress. In 2025 it reported sales of EUR 1,346.7 million and a 23.5 percent EBITDA margin, while the EUR 273 million capital increase and MDAX readmission eased the nearest financing and sentiment risks.

That does not change the full-year math. Management still expects sales, based on an expected exchange rate of EUR/USD 1.18, in the mid single digit percent range below the previous year and a 20 to 24 percent EBITDA margin in 2026. For investors, that keeps the story focused on earnings compression rather than a clean turnaround.

The recovery so far is coming mainly from 300 mm

The positive trends are real. In Q2, 300-mm business drove a 5% sequential sales increase to EUR322 million. Group EBITDA also improved to EUR69 million and the margin rose to 21.6% from 21.2% in Q1, supported by higher wafer shipments and improved fixed cost absorption. That suggests the recent reset is starting to work where demand is actually recovering.

200 mm is still the part of the business holding the stock back

The full-year guidance makes the split clear. Siltronic still expects sales in the mid single-digit percent range below the previous year at assumed FX, with pressure from declining 200 mm volume, continued price pressure outside long term agreements, and the SD shutdown. Even adjusting for FX and the SD line, sales were only around the prior year's level, which suggests 300 mm improved while 200 mm remained a drag.

That matters because a stock can bounce on one stronger segment for a while, but a more durable rerating usually needs the weaker part of the business to stop pulling earnings down. So far, that has not happened.

Pricing is the main reason the recovery still feels incomplete

The constructive case is easy to see: management expects a clear volume improvement in the second half of 2026, with 200-millimeter demand recovery and potential upside from memory safety stock rebuilding. If that happens on schedule, sentiment could improve materially.

But the near-term risks are still specific. 300-millimeter spot prices still below reinvestment levels and 200-millimeter prices declining in H1 2026 mean better demand does not automatically translate into better pricing or better economics. That is reinforced by elevated customer inventories and negative product mix in 200 mm.

Capex already looks more disciplined. Siltronic now expects Capital expenditure significantly reduced to EUR 180 to 220 million, and management has tied further investment to a recovery in pricing. That is the posture of a company waiting for more confidence in the cycle, not one assuming a full upcycle is already here.

What would change the stock narrative from here

The relief story is largely in place. The EUR 273 million capital increase, MDAX readmission, and demand recovery gaining traction, particularly in the 300-millimeter business have removed the most immediate financing and optics risks.

What may not be fully priced in is the earnings reset that comes with treating 200 mm and pricing as cyclical pressures rather than permanent damage. That is the setup that matters over the next few quarters, especially with management already expecting a clear volume improvement in the second half of 2026.

What would support a rerating

• 200 mm demand starts improving as expected in the second half of 2026.
• Memory safety stock rebuilding helps absorb supply and improve utilization.
• Pricing stabilizes instead of staying below reinvestment levels.

What would break the recovery case

• 200-millimeter market conditions remain sluggish in H1 or stay weak into the second half.
• Pricing remains a challenge, especially outside long-term agreements.
• Elevated customer inventories delay the expected volume rebound.

For now, Siltronic looks like a conditional cyclical recovery trade rather than a clean turnaround. The next few quarters should show whether 300 mm strength can spread into 200 mm volumes, firmer pricing, and better overall economics.