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Wacker Chemie: Germany's Silicon Champion and the Chemistry of Transformation
I. Introduction & Episode Roadmap
In the spring of 2025, deep in the Bavarian chemical triangle, a €300 million production line hummed to life at the Burghausen plant. The plant recently went into operation and is already producing its first consignments. By virtue of the new production line, WACKER is increasing its production capacity for products that comply with the highest semiconductor-grade standards by more than 50 percent. For most observers, it was just another factory opening. For those who understood Wacker Chemie's 111-year journey, it represented something far more consequential: the culmination of a bet placed decades ago that hyperpure materials would become the foundation of the digital world.
Wacker Chemie AG is a German multinational chemical company which was founded in 1914 by Alexander Wacker. The company is controlled by the Wacker family holding more than 50 percent of the shares. The corporation operates more than 25 production sites in Europe, Asia, and the Americas. But those bare facts obscure a remarkable transformation story—from acetylene chemistry pioneer to the world's dominant supplier of semiconductor-grade polysilicon.
Here's the central question that drives this narrative: How did a 110-year-old German chemical company become the world's largest polysilicon producer and a critical supplier to both the semiconductor and solar industries?
"Ultra-pure polycrystalline silicon is the purest man-made material. Everything regarding the semiconductor industry and, consequently, digital transformation revolves around this key raw material," said Wacker CEO Christian Hartel. Today, Wacker supplies approximately 90% of the world's electronics-grade polysilicon—a stunning market position that makes the company invisible infrastructure for every smartphone, data center, and AI accelerator on the planet.
The company's story unfolds across four generations of family ownership and a series of critical inflection points: the solar boom and bust of 2006-2017, the $2.5 billion Tennessee gamble, the failed GlobalWafers acquisition that preserved European semiconductor sovereignty, and the ongoing pivot from solar-grade to semiconductor-grade polysilicon. Each chapter reveals something essential about industrial capitalism, family business governance, and the relentless demands of technological change.
With 27 production sites across three continents, including major facilities in Burghausen and Nünchritz, Germany, Wacker Chemie employs approximately 16,600 people and achieved sales of €5.7 billion in 2024. That revenue comes from four distinct divisions—Silicones, Polymers, Polysilicon, and Biosolutions—each with its own competitive dynamics and strategic importance.
What follows is not merely corporate history but a study in industrial evolution, strategic patience, and the art of transforming commodity businesses into specialized moats.
II. The Founder's Vision: Alexander Wacker & The Electrochemical Age (1846–1914)
The origins of Wacker Chemie may be traced to Alexander Wacker, who was born in 1846 in the German city of Heidelberg. As a young man Wacker hoped to attend a university but ended up apprenticing as a clerk in the textile industry. The business skills he learned there would prove an important asset when he met Sigmund Schuckert in 1877.
Picture Germany's Gründerzeit—the "founding years" following unification in 1871—when electrical engineering and chemical manufacturing were transforming society with the same speed and disorientation that digital technology would create a century later. The founding years during which Alexander Wacker became great and wealthy, were extraordinary, dynamic, breathtakingly fast-paced times, comparable to today. Between 1871 and 1914, a rapidly expanding industry radically changed the world – with dynamos and fertilizers, automobiles and telephones, synthetically produced pharmaceuticals and, sometime later, the first plastics.
Schuckert, a gifted mechanic, had invented a flat ring dynamo machine that transformed water power into electricity. Together, Wacker and Schuckert started a business partnership at Schuckert's Nuremberg workshop. While Schuckert ran the workshop, Alexander Wacker oversaw the business, which employed 12 assistants and three apprentices.
The partnership proved transformative. As a result of Wacker's successful marketing efforts, S. Schuckert & Co. grew rapidly. By 1885 the company employed 46 clerks and 228 workers. The company's dynamos powered Munich's first electric tram line which started service in 1886.
Under the commercial management of Alexander Wacker, Schuckert built the first electric tram line for the city of Munich in 1886, and the first electric power plant for the city of Lübeck in 1887. In 1892, Sigmund Schuckert retired from the company he had founded due to a nervous condition. The partners then transformed Schuckert-Werke into Elektrizitäts-AG, or EAG, also based in Nuremberg. The general director was Alexander Wacker. By the turn of the century, the company's workforce numbered 8,500. Earnings skyrocketed – from 56,000 German mark in 1880 to 46.5 million in 1898.
That 830-fold increase in earnings over 18 years represents one of the great entrepreneurial success stories of late 19th-century Germany. But Alexander Wacker wasn't satisfied running an electrical equipment company. The electrical and chemical industries initially went separate ways in the founding years. As time went on, they increasingly moved in tandem, and each benefited from the other's progress. Gifted with astute business acumen, Alexander Wacker foresaw this development.
In 1903, he established the "Consortium fĂĽr elektrochemische Industrie," which today is Wacker's corporate research department. His aim was to use electrochemical processes to manufacture useful chemical compounds based on carbide and its derivative, acetylene. This research consortium would become the seedbed for innovations that continue to define the company today.
The pivot to electrochemistry wasn't merely opportunistic—it represented a profound insight into where value creation was heading. Cheap hydroelectric power combined with chemical expertise could produce basic materials that Germany's burgeoning industrial economy desperately needed. In 1914, Wacker received approval for the construction of a hydroelectric power plant and of a canal that would join the Alz and Salzach rivers. In his search for a suitable location, he chose a site close to the town of Burghausen (Bavaria). This site featured a 63-meter gradient between the Alz and the Salzach, which could be used to generate electricity. That same year he also founded "Alexander Wacker Gesellschaft für elektrochemische Industrie": the origin of the Wacker Group.
When Alexander Wacker registered Wacker Chemie at the Traunstein Commercial Register on October 13, 1914, he was 68 years old – an age at which most people have already retired, not only today but back then, too. The timing could hardly have been worse. In addition, he had just suffered a great loss: his son Franz Alexander, a chemist he had wanted to establish as his successor, died. World War I had just broken out in Europe.
Alexander Wacker wasn't a chemist or an engineer. And yet he, who died 100 years ago, on April 6, 1922, became one of the pioneers of German industry.
For investors, Wacker's founding illuminates a pattern that recurs throughout the company's history: the willingness to make large, long-term bets on emerging technologies while competitors focus on shorter-term opportunities. That 1914 decision to build a chemical plant while Europe descended into war required either remarkable foresight or remarkable stubbornness—perhaps both.
III. Building the Chemical Foundation (1914–1945)
On 13 October 1914, Alexander Wacker established "Dr. Alexander Wacker, Gesellschaft fĂĽr elektrochemische Industrie KG". The production plant in Burghausen, Upper Bavaria was constructed in 1916 and in December that year the first acetylaldehyde and acetic acid products were manufactured.
The first products manufactured in December 1916 were acetylaldehyde and acetic acid, which WACKER chemists developed by reacting acetylene (made from calcium carbide) with water. This entered the annals of the chemical industry as the 1st WACKER process for producing acetylaldehyde. These products were in the WACKER portfolio until 2012.
The plant's early years were shaped by wartime necessity. With 450 employees, the factory began producing acetone from acetic acid in Burghausen in the middle of the First World War. Suddenly, acetone became important for the war effort: it was used to make synthetic rubber for sealing submarine batteries. This was the starting point on the trajectory to becoming an international chemical company.
On December 7, 1916, the first industrial production of synthetic acetone in the world went into operation. To mark this milestone, King Ludwig III of Bavaria conferred an aristocratic title on Alexander Wacker in 1918. A few months later, the war was lost, and the Kingdom of Bavaria was history, along with the German Empire.
The interwar period brought diversification into polymer chemistry—a pivot that would prove crucial for the company's long-term development. Following testing at the Consortium, the first polyvinyl acetate production plant in Burghausen starts operating. By 1928, Wacker had begun producing vinyl acetate and polyvinyl acetate, establishing early leadership in polymer chemistry.
The 1930s brought both expansion and moral compromise. By 1930, Wacker's Burghausen plant had grown into a significant chemical production complex. In 1933, Wacker-Chemie acquired Elektroschmelzwerk Kempten, a silicon carbide producer—a purchase that planted the seeds for the company's eventual silicon-focused future.
Patent application for a suspension polymerization process to manufacture PVC. Dr. Herbert Berg, who later became managing director, developed the process at the Burghausen plant's Lab X. The highlight for Wacker-Chemie research was the development of a suspension technology for the production of polyvinyl chloride (PVC) which opened a new chapter in the history of plastics. In 1938, Wacker-Chemie started PVC production in Burghausen.
The Nazi years remain an uncomfortable chapter that the company has confronted with varying degrees of transparency. In the final days of the war, three employees were sentenced to death and shot in the factory yard because they had attempted to prevent the National Socialists from destroying the plant. In 2000, WACKER became part of the "Foundation for Remembrance, Responsibility and the Future," which made compensation payments to victims of forced labor.
When Alexander Wacker died on April 6, 1922, he left behind a company that had grown from wartime necessity into a diversified chemical manufacturer. Company founder Alexander von Wacker, recently raised to the non-hereditary aristocracy, died at the age of 75. His greatest achievement—founding Wacker Chemie at age 68—demonstrates that entrepreneurial ambition knows no age limit.
The 16-kilometer Alz Canal that joins the Alz and Salzach rivers became WACKER's lifeline. The tamed hydropower of the Alz River generated cheap, sustainable electricity – and still does. The amount of electricity obtained per year is equivalent to the power consumed by a town with some 80,000 inhabitants.
For investors today, this early history matters because it established patterns that persist: the integration of energy supply with chemical manufacturing, the research consortium model that drives innovation, and the family governance structure that enables long-term thinking. These weren't accidents—they were deliberate choices that continue to shape Wacker's competitive position.
IV. Post-War Rebuild & The Silicon Breakthrough (1945–1970s)
World War II left German industry in ruins and under Allied occupation. Wacker's facilities survived largely intact, but the company faced years of uncertainty about its very existence. It was not until 1953 that the Allies relinquished control over WACKER as part of their decartelization program, returning the company to its original owners.
The post-war period brought two transformative developments that would define Wacker's future: silicones and semiconductors.
In 1947, WACKER became the first European company to start working on silicones. In 1947, when research started again in Burghausen, Wacker-Chemie opened the silicon chapter of its history. Three years later, the research had turned out to be so promising that an experimental production facility was established. That facility produced silanes—the first preliminary ingredient for silicones—as well as the first silicon products such as a silicone-insulated high-voltage motor. In 1951 the range of Wacker-Chemie silicon products was expanded to include impregnating agents for textiles, release and antifoam agents, pastes, and emulsions.
In 1947, we became Europe's first silicone manufacturer; today we are number 2 in the global silicones business. WACKER SILICONES offers customers our broadest range of products. Two raw materials – silicon metal and methanol – are the basis for making over 2,800 silicone products in seven product groups: silanes, siloxanes, silicone fluids, silicone emulsions, silicone elastomers, silicone resins and pyrogenic silica.
But the truly consequential bet came in semiconductors. In April 1953, Wacker became a limited liability private company and was renamed to Wacker-Chemie GmbH. Eduard Enk started the Wacker semiconductor business in 1953 and produced its first silicon rod two years later.
Semiconductor-grade hyperpure silicon produced for the first time under the direction of Dr. Eduard Enk at the Burghausen site. The production of silicone rubber starts here, too.
In 1953 Wacker Chemie produced the first hyperpure silicon for semiconductors as well as the first silicon rubber. In 1955, the year when the Federal Republic of Germany regained sovereignty and the last prisoners were returning from Russia, Wacker-Chemie started building its first facility for the mass production of silanes and silicones.
A pioneer in the industry, Wacker has been producing polysilicon on an industrial scale since 1959. Beginning in 1961, hyperpure silicon was produced regularly and semiconductor production was expanded in Burghausen. In 1960, Wacker's hyperpure silicon was sold to the United States for the first time—a remarkable achievement for a company in a country that had been at war with America just 15 years earlier.
In 1965, Wacker-Chemie acquired Monosilicon, a manufacturer of hyperpure silicon based in Los Angeles, establishing its first American production footprint.
On May 9, 1969, the carbide production in Burghausen, which had significantly contributed to the early success of Wacker-Chemie, was closed down. The symbolic end of one era marked the full transition to a silicon-focused future.
In 1953 a law was passed that gave 51 percent of Wacker-Chemie to Alexander Wacker's heirs. This legal framework cemented family control and enabled the patient, long-term capital allocation that would prove essential in the capital-intensive polysilicon business.
The significance of these post-war decisions cannot be overstated. By entering silicones and semiconductors in the early 1950s—when these were nascent technologies with uncertain commercial prospects—Wacker positioned itself for the materials revolution that would power the information age. The company's researchers understood something profound: silicon-based materials would become foundational to modern civilization.
V. Global Expansion & The Rise of Silicon (1970s–1990s)
The oil shocks of the 1970s and the personal computer revolution of the 1980s transformed silicon from a specialty material into a global commodity. Wacker rode this wave with aggressive international expansion.
In 1978, Wacker Siltronic Corporation was founded in Portland, Oregon and in 1983 expansion of the company began in Asia with the addition of facilities there. The Portland facility marked Wacker's commitment to serving the burgeoning American semiconductor industry close to its major customers in California's Silicon Valley.
With personal computers and other electronics products based on microchips flooding the world, silicon was Wacker's flagship product in the 1980s. By 1987, Wacker-Chemie was the third largest producer of silicone in the world.
During the 1980s Wacker's network of worldwide subsidiaries was expanded significantly into Italy, Portugal, Greece, Sweden, Finland, Singapore, and South Africa. In 1988 the company was reorganized into five business divisions: vinyl acetate, polymers and organic chemicals; silicones, silanes and silicas; PVC and chlorine derivatives; semiconductors; and materials. Each division was headed by a director with worldwide responsibility. Wacker's sales passed the DM 3 billion mark for the first time in 1988; 14,000 people worldwide were on the company's payroll.
The 1990s brought both expansion and crisis. In 1995 Peter-Alexander Wacker joined the company's management board. The great grandson of Wacker Chemie's founder was the first Wacker family member since the 1960s to join the top management team. In the late 1990s, Wacker Chemie's semiconductor division suffered during the Asian economic crisis; in 1998 Wacker's profits decreased by two-thirds.
Despite this setback, Wacker continued to pursue a vivid globalization strategy. In 1998 Wacker-Chemie entered a joint venture with India's largest silicone manufacturer, Metroark.
Peter-Alexander Wacker's return to management represented a critical moment in the company's governance evolution. After the presentation, he told C&EN that a big part of Wacker's strength is its ability to make long-term investments without worrying about the short-term concerns of outside investors. "Stability is one of the biggest advantages of a private or family-owned company," he said. "Stability means we are not looking at every quarterly result. We can go through cycles where the earnings are a little bit lower because of high investment costs. It is much easier if you are not on the radar screen every quarter."
Private ownership also allows Wacker to put more money into R&D—some 6% of annual sales—than most publicly traded chemical companies, without having to fend off investor complaints of high spending.
This philosophy would be tested severely in the coming decades as Wacker navigated the volatile polysilicon market. The company's willingness to invest through downturns—when competitors were pulling back—would prove a decisive competitive advantage.
The purchase of the NĂĽnchritz plant in Saxony after German reunification further expanded Wacker's silicones capacity. At Zhangjiagang, China, WACKER and Dow Corning opened China's largest integrated silicone site, with facilities covering roughly one square kilometer.
By the late 1990s, Wacker had established itself as a global leader in both silicones and polysilicon, with production facilities spanning three continents. But the company remained privately held, giving it flexibility that publicly traded competitors lacked—flexibility that would prove essential when the solar industry transformed from niche market to global phenomenon.
VI. INFLECTION POINT #1: The IPO & Solar Boom (2006–2011)
On 10 April 2006, Wacker shares were traded for the first time on the Frankfurt Stock Exchange.
The IPO marked a significant milestone, providing capital for further expansion while maintaining the Wacker family as the majority shareholder. Wacker Chemie AG's largest shareholder continues to be Dr. Alexander Wacker Familiengesellschaft mbH, Munich, which holds over 50 percent of the voting shares in Wacker Chemie AG.
Wacker Chemie AG's revenue has demonstrated sustained long-term expansion since its initial public offering on April 25, 2006, which facilitated investments representing 15% of annual sales through 2009, primarily in silicon-based products. Sales grew approximately 2.5-fold from 2006 levels of around €2.6 billion to €6.4 billion by 2023.
The timing proved fortuitous. From the early 2000s, Wacker had increasingly extended its expertise to photovoltaics, and the solar industry was about to explode. Government subsidies in Germany, Spain, and other European countries created seemingly insatiable demand for solar panels—and the polysilicon that went into them.
Since 2005, WACKER invested over €2 billion in the expansion of its sites in Nünchritz and Burghausen, Germany. As a leading manufacturer of polysilicon and a pioneer in silicones, WACKER became an important partner of the solar industry since its beginning.
Through expansion, WACKER aimed to meet the growing global demand for hyperpure polycrystalline silicon. Being the second largest global producer of polysilicon, WACKER was striving for market leadership in this segment.
Then came the Tennessee mega-bet. Groundbreaking occurred on April 8, 2011, and the plant became operational in April 2016, costing approximately US$2.5 billion and making it the largest-ever single private investment in the state of Tennessee.
With the launch of the Charleston production site in the US state of Tennessee in April 2016, WACKER achieved a historic milestone for a number of reasons. The plant is one of our most modern production facilities for hyperpure polysilicon in the world. At around US$2.5 billion, it is the biggest single investment in the company's history and clearly signals our commitment to North America as a key region alongside Europe and Asia.
Another novelty is that the plant is not an expansion of existing production buildings; it was built completely from scratch on a greenfield site. It has excellent infrastructure and makes use of cheap and reliable energy from nearby power plants.
The decision to build in Tennessee reflected several strategic considerations: proximity to North American customers, access to cheap natural gas-generated electricity, and diversification away from European energy costs. In the long term, we plan to develop Charleston into a fully integrated production site, enabling us to supply polysilicon and silicone directly to our customers in the USA, the world's second largest chemical market. With the creation of 650 new jobs we have also given an economic boost to the entire region.
But even as construction progressed in Tennessee, storm clouds were gathering over the solar industry. Chinese manufacturers were ramping up polysilicon production at unprecedented scale, supported by government subsidies and cheap coal-generated electricity. The solar gold rush was about to become a bloodbath.
Myth vs. Reality: The Solar Boom
The Myth: Wacker's Tennessee plant was a brilliant bet on the solar industry that positioned the company for decades of growth.
The Reality: The plant was commissioned at almost exactly the wrong moment in the solar cycle. Wacker Chemie is starting up a $2.5 billion plant in Charleston, Tenn., that will make polysilicon for the solar panel industry. The German firm is opening the facility in a market that has bottomed out but is still struggling to turn a profit.
VII. INFLECTION POINT #2: Solar Bust & China's Rise (2012–2017)
The polysilicon market that Wacker had bet billions on was undergoing a structural transformation that would permanently alter industry economics.
For years, the number one position in the polysilicon industry was the domain of US-based manufacturer Hemlock Semiconductor. Hemlock lost its place in 2012 when new management changed course. Above all, the prohibitive duties that China introduced on polysilicon imports from the USA in 2013 diminished the accessible market considerably.
The three companies, REC Silicon/HSC/Wacker Chemie, pointed out that US polysilicon exports to China have reduced by around 90% between 2011 and 2018 thanks to the Chinese tariffs. Germany's Wacker Chemie, which produces polysilicon at its $2.5 billion Tennessee plant, has had to bring down its 2019 sales guidance due to lower prices for polysilicon which it says is also due to the overcapacity created by Chinese competitors.
Through these tariffs, China is effectively trying to corner the world market on this important building block for the solar and electronics industries. REC Silicon has had to shut down its $1.7 billion polysilicon plant in Moses Lake, Washington, while HSC had to shutter its Tennessee plant in 2014 soon after the tariffs were imposed.
An additional burden is the high polysilicon overcapacity in China. The Chinese government is subsidizing this expansion not only with loans and incentives, but also by providing polysilicon producers there with coal-generated electricity at extremely favorable prices.
Despite these headwinds, Wacker pressed forward with the Tennessee ramp-up. WACKER began starting up individual plant sections in Charleston in December after a construction period of just under five years. In the coming months, we will gradually ramp up production and expect to reach Charleston's full capacity in the third quarter of 2016.
The Charleston plant became operational in April 2016, but the market conditions were brutal. The new site will increase the Munich-based chemical company's capacity for hyperpure polysilicon by more than 20,000 metric tons per year.
Then came disaster. On September 7, 2017, a massive explosion in the plant's hydrogen recovery unit resulted in the release of a steam cloud which could be seen for several miles, as well as the environmental release of low-concentration hydrochloric acid. Due to initial concerns about the composition of the cloud, local officials closed a section of I-75 between nearby Cleveland and Calhoun, as well as nearby State Route 308 in Charleston. During the event, seven local residents, and a plant worker were transported to a local hospital with unspecified injuries.
Despite these setbacks, Wacker achieved a milestone in 2017. Wacker Chemie AG became the world's largest manufacturer of polysilicon. With a production volume of more than 70,000 metric tons in 2016, Wacker superseded Jiangsu Zhongneng Polysilicon, a subsidiary of GCL-Poly in China. Wacker benefitted from the smooth ramp-up of its new polysilicon plant in Tennessee. Wacker's new plant had an annual capacity of 20,000 MT, bringing total capacity to 80,000 MT.
WACKER became a world market leader in polysilicon, with production sites in Burghausen, NĂĽnchritz and Charleston and an annual production capacity of up to 80,000 metric tons.
But market leadership in a commodity market experiencing massive overcapacity provided cold comfort. In November, polysilicon market analyst Johannes Bernreuter forecast that oversupply in the polysilicon market could reach 1.4 million tonnes in 2024, creating a market that Bernreuter called "cut throat". He said the result of this oversupply would likely be market consolidation, where the largest players – led by Chinese producer Tongwei – would force out "most, if not all" new, smaller Chinese entrants to the market.
The lesson for investors: even world-leading positions in commodity markets offer limited protection when structural oversupply combines with subsidized competition. Wacker's response—pivoting toward higher-value semiconductor-grade polysilicon—would define the company's strategy for the next decade.
VIII. INFLECTION POINT #3: The Siltronic Spinoff (2015–2021)
While Wacker was navigating the solar polysilicon storm, management made a parallel strategic decision: to separate the silicon wafer business that had been part of the company for over fifty years.
In May 2015, Siltronic AG prepared for an Initial Public Offering and subsequent listing on the Frankfurt Stock Exchange (Regulated Market, Prime Standard). Wacker Chemie AG's Executive and Supervisory Boards approved its subsidiary's IPO plans.
The Siltronic AG IPO occurred during the same year. Wacker celebrated its 100th anniversary in Munich 2014 and in 2015, Siltronic AG made its IPO.
The strategic rationale was straightforward: Siltronic, the silicon wafer business, was truly not a pearl in the group's portfolio. The last year in which Siltronic delivered a positive EBIT contribution was 2008. CEO Rudolf Staudigl said reshaping Siltronic's ownership structure could be beneficial for both companies. With the income from a flotation, the former parent company could free up funds to invest in its chemical and polysilicon operations. This also could reduce overall capital intensity while Siltronic "could harness additional growth opportunities by accessing the capital markets itself."
The semiconductor cycle turned, and Siltronic's fortunes improved dramatically. When Siltronic went public in 2015, its largest shareholder Wacker Chemie held a 57.8 percent stake in the company, but that fell in 2017 to 30.8 percent.
Since then, Wacker Chemie AG has held a minority stake in Siltronic AG of just under 31 percent. A strategic goal that was clearly communicated when the company went public was realized.
Then came the GlobalWafers saga—a transaction that would have profound implications for European semiconductor sovereignty.
Under this agreement, WACKER irrevocably undertakes to transfer its entire stake in Siltronic AG – accounting for some 30.8 percent – to GlobalWafers as part of a voluntary takeover bid that GlobalWafers will submit to Siltronic shareholders.
GlobalWafers' acquisition of Siltronic AG of Germany for 3.75 billion euros (NT$130 billion) will be the biggest-ever overseas tech takeover by a Taiwanese company. How did GlobalWafers Chairwoman Doris Hsu convince the venerable German enterprise to accept Taiwanese ownership?
"Since we became a minority shareholder in Siltronic in 2017, we have repeatedly expressed our intention to sell our remaining stake in the medium-to-long term," the Munich company's president and CEO, Rudolf Staudigl, noted. Explaining the rationale for the sale at this time, Staudigl said "Siltronic has performed extremely well over the last few years, it enjoys a strong position in the global semiconductor-wafer market, has an excellent technology base and is highly profitable."
The €4.4 billion ($4.9 billion) transaction already had been approved by regulatory authorities in Europe (including Germany), the US, South Korea and Japan, though China's green light was still outstanding. The market is led by Japan's Shin-Etsu. GlobalWafers is in third place, followed by Siltronic. The merger would create a global number two. To address supply concerns, Germany, whose automotive industry has been hit by the semiconductor shortage, last year tightened its information requirements for transactions involving sensitive technology.
But the deal collapsed in dramatic fashion. Germany's Ministry of Economic Affairs and Climate Action did not issue the foreign trade clearance required for the merger of Siltronic AG with GlobalWafers Co., Ltd. The Ministry did not provide the clearance required to close the transaction by the deadline of January 31, 2022. As a result, the planned merger will not materialize.
"We regret the decision by Germany's Ministry of Economic Affairs and Climate Action not to approve the merger before expiry of the contract closing period. We remain convinced that the merger of GlobalWafers and Siltronic would have been in the best interests not only of both companies, but also of the German and European semiconductor industries."
In a statement, Wacker CEO Christian Hartel said the company still intends to divest its remaining shareholding in the medium term and is "under no time pressure." The wafers manufacturer, he added, "has performed extremely well in recent years." Moreover, "it is excellently placed in terms of technology and is highly profitable, which makes the stake a financially accretive investment for us."
After the successful IPO of Siltronic AG in 2015, the disposal of our remaining 30.8 percent stake in the company now marks the end of an association spanning more than 50 years.
The failed GlobalWafers deal illustrates how strategic assets in the semiconductor supply chain have become geopolitically sensitive. Germany's decision to block the transaction reflected growing concerns about European technological sovereignty—concerns that would intensify with the passage of the European Chips Act.
IX. INFLECTION POINT #4: The Semiconductor Pivot (2020–Present)
In a world where global trade tensions and overcapacity in China's solar sector have upended markets, Wacker Chemie has emerged as a case study in strategic adaptation. The company's decisive pivot from solar-grade to semiconductor-grade polysilicon represents one of the most consequential strategic shifts in its 111-year history.
The total share of hyperpure polysilicon volumes for the semiconductor industry grew further in 2024.
"In POLYSILICON, on the other hand, our business was hit by the slump in demand for solar-grade polysilicon and by the sustained excess capacity in China," explained Hartel, adding that the debate surrounding US anti-dumping tariffs on solar imports from some Southeast Asian countries also unsettled the markets. "This confirms that we are on the right track strategically in this area," stressed Hartel. WACKER is aiming to increase the share of hyperpure polysilicon for the semiconductor industry going forward. According to the company's CEO, it is progressing well towards this goal.
The strategic rationale is compelling. The polysilicon market size tied to semiconductor applications is modest but highly lucrative; 11N-grade parcels fetch 300-400% premiums and often sell under multi-year, take-or-pay contracts. Advanced logic fabs ramping in Arizona, Dresden, and Kumamoto are already reserving allocations years ahead, shielding producers from solar price cycles. Technological crossover is limited: chlorosilane raw materials are common, yet downstream purification diverges sharply, necessitating dedicated reactors or post-distillation loops. As AI workloads expand, memory fabs are adopting polysilicon gate stacks with ever-tighter dopant windows, reinforcing high-purity demand.
One of the key innovations in 2023 was the development of a new ultra-pure polysilicon grade by Wacker Chemie, which meets the impurity thresholds required for sub-3nm chip production. This material features metallic contamination levels reduced to below 5 ppt, making it one of the purest commercially available polysilicon products.
To solidify its semiconductor leadership, Wacker committed to its largest investment in a decade. With a total expenditure of over €300 million, Etching Line Next is currently the Group's largest investment project. Construction work began in fall 2022. Commissioning took place in stages from fall 2024. The plant recently went into operation and is already producing its first consignments. By virtue of the new production line, WACKER is increasing its production capacity for products that comply with the highest semiconductor-grade standards by more than 50 percent. This expansion in capacity will also create around 150 new jobs.
"A strong signal for Bavaria and Germany as a business location: the opening of a state-of-the-art production line at Wacker Chemie in Burghausen worth €300 million. Hyperpure semiconductor-grade polysilicon is the basis for digitalization. Wacker Chemie is the global leader in this field. Together with the federal government, Bavaria is supporting the investment with around €50 million in innovation funding. This is a clear commitment to Burghausen, the Bavarian chemical triangle and the high-tech chemical industry."
WACKER POLYSILICON plans to double its sales with semiconductor-sector customers by 2030. It has earmarked investment of some €100 million for each of the next few years.
Semiconductor-grade polysilicon: purity of over 99.9999999999 percent—that's twelve nines of purity, representing the purest man-made material on Earth.
"As the only European producer of ultrapure polysilicon, we are proud to be making an important contribution to strengthening Europe's microelectronics supply chain with this project," explained WACKER CEO Christian Hartel. He went on to say that, at the same time, this investment project was an important part of WACKER's strategy to intensify its focus on polysilicon for applications that demand extremely high quality. "By expanding our surface-cleaning capacity, we are creating the necessary conditions for meeting the continued fast-growing demand of our semiconductor customers. Thanks to this investment, we are also able to take the quality of our material to the next level so as to support the semiconductor sector's latest technologies."
Meanwhile, the solar-grade business continues to struggle. Overcapacity in the Chinese polysilicon market pushed profits down for German polysilicon manufacturer Wacker last year. In its preliminary Q4 and full-year 2024 financial results, Wacker expects its polysilicon earnings to contract by 39% compared with 2023 to US$195 million. Its total sales over 2024 reached US$950 million, a 41% contraction compared with US$1.6 billion in 2023.
"The economic environment in 2024 was challenging," CEO Christian Hartel said: "Our business was hit by the slump in demand for solar-grade polysilicon and by the sustained excess capacity in China".
"The tariff increase will protect against China's policy-driven overcapacity that depresses prices and inhibits the development of solar capacity outside of China," the White House said in a statement. "China has used unfair practices to dominate upwards of 80 to 90% of certain parts of the global solar supply chain and is trying to maintain that status quo."
These announcements indicate a demand for non-Chinese polysilicon, but Crawford points to the silence from the largest incumbent producers outside of China: Wacker Chemie and Hemlock. Neither company has announced an expansion of its facilities, despite the increased interest in non-Chinese supply. "I think they understand how the poly industry works," Crawford says. "They got burned before in the ups and downs of the semiconductor industry, and so the question is, how can we make more poly to compete with the unlevel playing field [and overcapacity] in China?"
For investors, the semiconductor pivot represents both opportunity and risk. The opportunity lies in Wacker's dominant position in a high-value niche essential to digitalization. The risk lies in the cyclical nature of semiconductor demand and the possibility that Chinese competitors eventually achieve comparable purity levels.
X. Current State & Business Division Deep Dive
WACKER operates through four business divisions. The chemical divisions WACKER SILICONES and WACKER POLYMERS supply products (silicones, polymeric binders) for the automotive, construction, chemical, consumer goods and medical technology industries. WACKER BIOSOLUTIONS, the life sciences division, specializes in bioengineered products such as biopharmaceuticals and food additives. WACKER POLYSILICON produces hyperpure polysilicon for the semiconductor and photovoltaic industries.
Most of our products are based on inorganic raw materials. Silicon-based products account for about 65 percent of WACKER sales, and products primarily based on ethylene and acetic acid for 35 percent. Our main customers are in the automotive, construction, chemical, semiconductor, consumer goods, medical technology, pharmaceutical and photovoltaic sectors.
Silicones Division (~49% of sales)
According to preliminary figures, SILICONES generated annual sales of €2.81 billion, up 2 percent on the previous year (€2.74 billion). EBITDA is scheduled to come in at €345 million, marking a 46 percent increase year over year (€236 million). This positive development was driven by an improved product mix, with a significantly higher proportion of specialty products, and better plant utilization rates.
WACKER SILICONES is one of the largest silicone manufacturers worldwide with over 2,800 highly specialized and innovative products. The division's portfolio ranges from silicone fluids, emulsions, resins, elastomers and sealants to silanes, silane-terminated polymers and pyrogenic silica. These stand out due to their significant value-adding potential – enhancing both the benefits and performance of customers' end products. WACKER SILICONES' products find application in such sectors as automotive engineering, construction, chemicals, cosmetics, medical technology, energy and electronics, and paper and textiles.
The silicones business is expanding with new facilities. Wacker Chemie AG strengthens its focus on silicone specialties in Europe with the construction of a new production site. Today, the chemical company, together with project partners and officials representing the city and the region, broke ground symbolically in Karlovy Vary, Czech Republic. From the end of 2025, WACKER will produce room-temperature curing high-performance silicones and from 2028 high consistency silicone rubber in Karlovy Vary. These silicones are used in key technologies such as electromobility, health and medical care and in grid expansion. The investment volume is in the low triple-digit million-euro range. 200 new jobs will be created in the first expansion phase.
When fully operational, the site will be able to supply over 20,000 metric tons of custom-made silicones per year. First production quantities are expected by the end of 2025.
Polymers Division
The preliminary figures for POLYMERS point to sales of €1.46 billion (2023: €1.58 billion), down 8 percent. EBITDA is expected to total €195 million (2023: €253 million). This decrease of 23 percent was chiefly due to the year-over-year decline in selling prices. The division was able to increase sales volumes in a weak market environment.
Polymer chemistry also made great strides in the post-war years. In the early 1950s, Wacker chemists developed the principles for producing dispersible polymer powders for dry-mix mortars, which today are an integral part of many tile adhesives, plasters and building-insulation systems. In 1957, the first dispersible polymer powder production plant went on stream. Copolymers and terpolymers were additionally developed in quick succession. They considerably extended the range of properties and applications of dispersions. A milestone was achieved in 1960, when vinyl acetate-ethylene copolymer (VAE) was discovered.
Polysilicon Division
According to preliminary calculations, the POLYSILICON division closed the financial year with sales of €950 million. This was a decrease of 41% compared to the previous year (€1.60 billion). EBITDA is expected to have contracted 39 percent to €195 million (2023: €321 million) due to lower prices and volumes for solar-grade polysilicon. Ongoing high energy prices in Germany also had a negative impact. The total share of hyperpure polysilicon volumes for the semiconductor industry grew further in 2024.
The Polysilicon division expects to post sales of between €1.0 billion and €1.3 billion in 2025. Volumes of semiconductor-grade polysilicon are likely to increase considerably, while the solar-grade polysilicon business will remain challenging. EBITDA should range between €100 million and €250 million.
Biosolutions Division
Wacker began producing bioengineered products in 1990, which led to multiple acquisitions and the establishment of Wacker Biotech GmbH in 2005.
Biosolutions outperformed the prior-year figures for both sales and EBITDA in 2024. Sales increased by 11 percent and reached €375 million (2023: €337 million). At €35 million, EBITDA was significantly higher year over year (2023: €7 million). The positive trend was bolstered primarily by growth in its biopharmaceutical business.
Biotechnology is a strategic growth field for WACKER. By 2030, WACKER BIOSOLUTIONS plans to contribute around €1 billion to Group sales. The development of the Halle site into a competence center for mRNA will aid this strategy.
With 300 guests from politics and business, as well as employees in attendance, WACKER today celebrated the opening of its new mRNA competence center, a key project for the Group's future. During the Covid pandemic, mRNA-based actives saved millions of lives – an experience that has underlined the importance of being prepared for these kinds of future challenges. Expansion of WACKER's Halle site into an mRNA competence center enables the company to produce mRNA actives on a large scale going forward. Four new production lines have more than trebled the site's capacity, some of which will be available to the German government as part of its pandemic-preparedness program. The remaining production capacity is for other customers. The first contracts in this regard have already been signed. More than 100 highly qualified jobs have already been created for the mRNA competence center at WACKER's site in Halle.
The new facility enables the large-scale production of active ingredients based on messenger ribonucleic acid (mRNA), such as anti-Covid mRNA vaccines. WACKER invested more than 100 million euros in this construction project.
2025 Outlook
Overall, WACKER expects Group sales to range between €6.1 billion and €6.4 billion, increasing in all regions and business divisions. EBITDA is predicted to come to between €700 million and €900 million, with an EBITDA margin at the prior-year level. Capital expenditures will likely be considerably below the prior-year level, and will slightly exceed depreciation and amortization. Depreciation and amortization is expected to total just over €500 million. Net financial debt is expected to be at the prior-year level.
However, recent results have disappointed. Wacker Chemie AG's sales and earnings declined in the third quarter of 2025 amid a persistently weak market environment. The chemical company generated sales of €1.34 billion in the reporting quarter (Q3 2024: €1.43 billion), a decrease of 6 percent year over year. This decrease was prompted by lower prices and negative exchange-rate effects. Compared with Q2 2025 (€1.41 billion), sales declined 5 percent. The Group EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to €112 million (Q3 2024: €145 million), down 23 percent year over year. Compared with a quarter earlier (€114 million), EBITDA decreased 2 percent. The reasons for the year-over-year decline were the lower sales volumes, prices and plant capacity utilization rates in some cases as well as the unfavorable development of EUR/USD exchange rate.
In view of the ongoing weak business situation, the company has also further refined its full-year forecast. Sales are now forecast to be at the lower end of the expected range, with EBITDA in the lower half of the range. The net result for the year is expected to be negative.
"Even though we closed Q3 in line with market expectations, sales and earnings were again down year on year in almost all business divisions," explained WACKER CEO Christian Hartel. "We are actively taking actions here – with a clear focus on cash and costs. In October, we launched a comprehensive project to achieve significant cost savings in our production and administrative setup. Measures are currently being developed here. We want to start implementation in the first quarter of 2026."
XI. Bull Case vs. Bear Case
Bull Case
Semiconductor Polysilicon Dominance: Wacker supplies approximately 90% of the world's electronics-grade polysilicon—a stunning market position with multi-year take-or-pay contracts and 300-400% price premiums over solar-grade material. As AI accelerates demand for advanced semiconductors, Wacker's position becomes more valuable.
The new cleaning line is the group's largest single investment at the Burghausen site since the expansion of polysilicon production with the so-called expansion stage 8 in 2010. In the polysilicon business, WACKER wants to concentrate on expanding its capacities for semiconductor applications in addition to producing material for particularly high-efficiency solar cells. The WACKER POLYSILICON division plans to double sales with customers in the semiconductor industry by 2030 in line with the Group's strategic growth goals. Investments of around 100 million euros per year are planned for this in the next few years.
Diversified Chemical Portfolio: The Silicones division provides stable cash flows with exposure to megatrends including electromobility, renewable energy grid expansion, and medical technology. "Its proximity to Burghausen and Pilsen, the region's relatively low energy costs, and the availability of qualified staff made the decision very easy for us in the end."
Family Control and Long-Term Thinking: It holds over 50 percent of the voting shares in Wacker Chemie AG. Blue Elephant Holding GmbH (Bad Wiessee, Germany) also had no voting-share changes to report in 2024, with its holding in Wacker Chemie AG remaining at over 10 percent. This ownership structure enables patient capital allocation through cycles.
Biosolutions Optionality: During a Capital Market Day at the end of March, WACKER announced that it would significantly increase its investments in the further growth of its biotechnology business. WACKER wants to invest more than €80 million per year in this area in the next few years. By 2030, WACKER BIOSOLUTIONS plans to contribute around €1 billion to Group sales.
European Chip Act Tailwinds: As the only European producer of ultrapure polysilicon, Wacker benefits from political priorities around technological sovereignty and supply chain resilience.
Bear Case
Solar Polysilicon Structural Decline: Cost pressures remain intense as Chinese utilization rates hover below 40%, depressing spot prices even as long-term semiconductor contracts preserve margins for ultra-high-purity producers.
Energy Cost Competitiveness: German energy prices remain among the highest in the world, structurally disadvantaging Wacker's European operations relative to competitors with access to cheap coal or hydroelectric power.
Semiconductor Cyclicality: While semiconductor demand appears strong, the industry has historically exhibited severe boom-bust cycles that can devastate polysilicon producers who invest at the wrong moment.
China Technology Risk: Wacker cited several related reasons for the impairment charge, all focused on the Chinese governments well known strategy to become self-sufficient in both solar grade and semiconductor grade polysilicon production. If Chinese producers eventually achieve comparable purity levels for semiconductor-grade polysilicon, Wacker's premium position could erode.
Operational Risks: The Charleston facility has experienced multiple safety incidents. Today the U.S. Chemical Safety and Hazard Investigation Board (CSB) released its final report into the November 2020 hydrogen chloride (HCl) release that occurred during maintenance activities at the Wacker Polysilicon North American facility in Charleston, Tennessee. A worker was fatally injured in the incident.
Porter's Five Forces Analysis
Supplier Power (Moderate): Wacker partially controls its supply chain through silicon metal production in Norway and integrated operations in Burghausen. However, energy costs remain a significant input.
Buyer Power (Low-Moderate): For semiconductor-grade polysilicon, buyers have limited alternatives and sign multi-year contracts. For solar-grade polysilicon and commodity silicones, buyers have more options.
Threat of New Entry (Low for semiconductors, High for solar): The €300 million+ capital requirements and decades of process expertise create substantial barriers in semiconductor polysilicon. Solar-grade polysilicon faces lower barriers, as Chinese expansion demonstrates.
Threat of Substitutes (Low): There are no commercial substitutes for polysilicon in semiconductor manufacturing. Silicones face some competition from organic polymers in specific applications but offer unique property combinations.
Competitive Rivalry (Moderate-High): In semiconductor polysilicon, competition is limited among a handful of qualified producers. In solar polysilicon and silicones, competition is intense.
Hamilton Helmer's 7 Powers Analysis
Process Power (Strong): Semiconductor-grade polysilicon: purity of over 99.9999999999 percent represents process knowledge accumulated over 70 years that competitors cannot quickly replicate.
Scale Economies (Moderate): Wacker's integrated production sites benefit from scale in shared infrastructure and energy supply.
Network Effects (Weak): Limited network effects in chemical manufacturing.
Switching Costs (Strong for semiconductors): Semiconductor customers face significant qualification costs when changing polysilicon suppliers, creating sticky customer relationships.
Branding (Moderate): In specialty silicones, Wacker's brands like ELASTOSIL® carry reputation value.
Cornered Resource (Strong): As the only European producer of semiconductor-grade polysilicon, Wacker holds a strategic position in geopolitically sensitive supply chains.
Counter-positioning (Moderate): Chinese competitors subsidized for solar polysilicon would face different economics attempting to enter the semiconductor segment.
XII. Key Performance Indicators for Ongoing Monitoring
For long-term fundamental investors, three KPIs matter most in tracking Wacker Chemie's ongoing performance:
1. Semiconductor-Grade Polysilicon Volume Mix: Track the percentage of total polysilicon volumes destined for semiconductor versus solar applications. The total share of hyperpure polysilicon volumes for the semiconductor industry grew further in 2024. Management targets doubling semiconductor sales by 2030; progress toward this goal is the single most important indicator of strategic execution.
2. Silicones EBITDA Margin: The Silicones division provides ~50% of sales and represents Wacker's most stable business. In the reporting quarter, EBITDA at WACKER SILICONES amounted to €90 million, up 73 percent compared with the same quarter last year (€52 million) and up 11 percent as against the previous quarter (€81 million). The earnings trend benefited above all from positive volume and product mix effects. The year-on-year decline in raw material and energy prices and better plant utilization also had a positive impact here. The EBITDA margin in Q2 2024 was 12.6 percent, after 7.4 percent in Q2 2023 and 11.4 percent in the preceding quarter. Target margins above 12% indicate healthy specialty product pricing; margins below 10% suggest commodity pressure.
3. Net Financial Debt/EBITDA: As of December 31, 2024, WACKER reported net financial debt of around €691 million (December 31, 2023: €84 million). The significant increase in net debt reflects operating cash outflows during the downturn. Leverage above 2x EBITDA would signal balance sheet stress requiring attention.
XIII. Regulatory & Accounting Considerations
Material Legal/Regulatory Overhangs:
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U.S. Trade Policy: It must be noted that developments in international trade relations, particularly the current tariff conflicts, pose a considerable risk for economic growth. The repercussions of these conflicts on the global economy and on WACKER's business cannot be reliably determined at present.
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Chinese Market Access: Anti-dumping duties on U.S. polysilicon and potential retaliatory measures create market access uncertainty.
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Environmental Compliance: German energy transition policies continue to pressure industrial energy costs.
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Siltronic Stake: Hartel underscored that WACKER still intended to sell its remaining stake in Siltronic in the medium term and that WACKER was under no time pressure in this regard: "Siltronic has performed extremely well in recent years. It is excellently placed in terms of technology and is highly profitable. That makes our stake in Siltronic a financially accretive investment for us." The ~31% Siltronic stake represents a significant non-operating asset whose eventual disposition could provide substantial capital.
Accounting Judgments to Monitor:
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Polysilicon Asset Impairments: Historical impairments (€750 million in 2019) demonstrate sensitivity to market conditions. Asset valuations depend on long-term polysilicon price assumptions.
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Long-Term Contract Revenue Recognition: Take-or-pay contracts with semiconductor customers create revenue visibility but require judgment about counterparty performance.
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Pension Obligations: As a large German employer, Wacker carries significant defined benefit pension obligations sensitive to discount rate assumptions.
XIV. Conclusion: The Chemistry of Transformation
Alexander Wacker registered his chemical company in October 1914, at age 68, amid personal tragedy and the outbreak of world war. His creation survived two world wars, Allied occupation, multiple technological transformations, and the relentless pressure of global competition.
Today, his great-great-grandchildren's family holding controls a company that supplies the purest man-made material on Earth—the hyperpure polysilicon that enables everything from smartphone processors to AI accelerators. Today, 100 years after his death on April 6, 1922, his creation, Wacker Chemie, is among the leading suppliers on the world market for all its main areas of business. When Alexander Wacker registered Wacker Chemie at the Traunstein Commercial Register on October 13, 1914, he was 68 years old – an age at which most people have already retired, not only today but back then, too.
The CEO remains optimistic about the company's long-term prospects: "Despite the weak economic environment, WACKER is well positioned for the future in both financial and strategic terms. In the medium and long term, we will continue to benefit from global megatrends. Digitalization, renewable energies, electromobility and energy conservation are among the key drivers of our business," he emphasized. "Our strategy is intact, which is why we confirmed our 2030 growth and sustainability targets at our Capital Markets Day in September."
The company's current challenges—Chinese solar overcapacity, high German energy costs, semiconductor cyclicality—are real and substantial. The net result for the year is expected to be negative.
But Wacker has transformed itself before. From acetylene chemistry to silicones. From silicones to semiconductors. From solar polysilicon to semiconductor-grade ultra-purity. Each transformation required patient capital, accumulated expertise, and the willingness to invest through downturns.
Wacker Chemie continues to transition from a cyclical materials company into a specialty and biotech-driven chemical leader. The group invests heavily in: High-margin silicone specialties for e-mobility, semiconductors, and healthcare; Biosolutions, focusing on pharmaceutical proteins, cell-culture media, and biopharmaceutical contract manufacturing; Sustainable production, including COâ‚‚ reduction, circular materials, and renewable energy integration.
The question for investors is whether Wacker can execute another transformation—from a company caught between Chinese solar dominance and European energy costs into a specialized materials supplier essential to the digital and biotech economies. The €300 million Burghausen expansion, the mRNA competence center in Halle, and the Karlovy Vary silicones facility represent the company's answer.
In 2024, this path was validated by the independent Science Based Targets initiative (SBTi). This makes us one of the first chemical companies worldwide with a validated net zero target.
For 111 years, through wars and peace, boom and bust, the Wacker family has maintained control and the company has persevered. The chemistry of transformation continues.
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