German chipmakers report lower third quarter sales as downturn bites

FILE PHOTO: The headquarters of German chip equipment maker Aixtron SE is pictured through a security fence in Herzogenrath near the western German city of Aachen, October 25, 2016. REUTERS/Wolfgang Rattay

BERLIN (Reuters) - German chipmakers Aixtron and Siltronic on Thursday reported a fall in third quarter sales, hurt by weaker demand due to a global economic downturn that has weighed on the microchip industry.

Chip equipment maker Aixtron AIXGn.DE posted a 17% quarterly drop in sales in the third quarter while profit fell 15%, sending shares down more than 10%. But the company said it expected order intake and revenue to grow in the fourth quarter and confirmed its full-year outlook.

Silicon wafer maker Siltronic WAFGn.DE said third-quarter sales were 12 million euros lower than in previous quarter and fell by more than 20% from a year earlier, citing reduced demand and price declines.

It confirmed its 2019 forecast but said fourth quarter wafer sales would be significantly below those in the third quarter. Its shares fell after market open but then recovered, up 0.4% at 0953 GMT.

The global microchip industry is being squeezed by a slump in demand and a prolonged U.S.-China trade dispute and U.S.-competitor Texas Instruments TXN.O has forecast current-quarter revenue well below estimates.

One company bucking the trend was Anglo-German chip designer Dialog Semiconductor DLGS.DE, which on Wednesday raised its forecast for the third quarter, benefiting from its position as a designer rather than maker of the chips.

It said third-quarter revenue would be slightly higher than its previous forecast to hit $409 million while operating profit would reach $85 million.

Dialog, which is UK-based but listed in Frankfurt, has been reducing its reliance on its main client Apple as its Internet of Things segment grows.

Reporting by Riham Alkousaa, editing by Tassilo Hummel and Deepa Babington