Hello, everyone, and welcome to the presentation of Siltronic's Q3 2026 results. Please note that this call is being recorded and streamed on siltronic.com. The call will also be available as an on-demand version later today. Your participation in this call implies your consent to this. At this time, I would like to turn the conference over to Verena Stütze, Head of Investor Relations and Communications of Siltronic AG.
Thank you, Bettina, and welcome everybody to our Q3 2026 results presentation. This call will also be webcast live on siltronic.com. A replay of the call will be available on our website shortly after the end of the call. Our CEO, Michael Heckmeier, and our CFO, Claudia Schmitt, will give you an overview of our financials, the current market developments, and our guidance. After the presentation, we will be happy to take your questions. Please note that management comments during this call will include forward-looking statements that involve risks and uncertainties. For a discussion of risk factors, I encourage you to review the safe harbor statement contained in today's press release and presentation. All documents relating to our Q3 reporting are available on our website. I now turn the call over to Michael for his remarks.
Thank you, Verena, and a warm welcome also from my side. As announced several months ago, we rescheduled today's call because last week I had the privilege of joining the business delegation of Germany's Federal Chancellor Friedrich Merz on his visit to Singapore, Japan, and South Korea. The trip provided valuable opportunities to engage with political and business leaders in some of the world's most important semiconductor markets. It also allowed us to emphasize a simple but important message: there are no chips without wafers, and Siltronic plays an essential role in the value chain. Now let us turn to our third quarter results. Let me start by summarizing the key messages of today's call. Demand continued to gain momentum in the third quarter, with a clear quarter-on-quarter increase in wafer volumes across both 200 mm and 300 mm.
While this recovery is encouraging, pricing did not catch up meaningfully yet in Q3. The higher volumes are clearly reflected in our financial performance. All major financial KPIs improved sequentially in Q3 2026. Accordingly, we have slightly revised our sales guidance upwards for 2026, reflecting more favorable FX and stronger demand. We now expect our EBITDA margin to reach 22%-24%, which is at the upper end of our previous guidance. Let me briefly highlight our Q3 performance before Claudia takes you through the financials in more detail. Q3 showed further sequential progress. Sales rose by 11% from Q2 to EUR 355 million, mainly driven by higher wafer area sold across both diameters.
Profitability strengthened as well, with the EBITDA margin reaching 23%. EBIT improved by EUR 10 million to -EUR 42 million. Capex amounted to EUR 40 million, predominantly related to our 300 mm activities. Net cash flow turned positive for the first time this year at EUR 58 million, compared with negative EUR 27 million in Q2. Cash and securities increased to EUR 734 million at the end of September, primarily driven by the capital increase in June. With these positive developments in mind, I now hand over to Claudia for the details.
Thank you, Michael, and a warm welcome to everyone. Let's now turn to our financial performance. The stronger operating trend Michael just described is clearly visible in our third quarter results. Sales increased by 10.5% quarter-over-quarter to EUR 355 million, driven by higher wafer area sold. Pricing, product mix, and FX effects only played a minor role. The average euro-US dollar exchange rate was 1.15 in Q3 compared with 1.16 in Q2. Higher volumes resulted in improved utilization and fixed cost absorption. This was supported by the continued ramp-up of our new fab in Singapore. On an underlying basis, the fab was no longer dilutive to the group EBITDA margin in Q3. These positive effects were partly offset by a slight increase in depreciation, as well as higher costs for energy, freight, and supplies related to energy. In addition, Q2 had benefited from the targeted inventory buildup.
Despite these headwinds, gross profit improved by EUR 6 million quarter-over-quarter. At the EBITDA level, the sequential improvement was also supported by more favorable FX and hedging effects, mainly from energy hedging. These effects resulted in income of EUR 0.5 million in Q3 compared to an expense of EUR 3 million in Q2. As a result, EBITDA increased from EUR 69 million- EUR 81 million, while the EBITDA margin improved from 21.6%- 22.9%. Down the income statement, EBIT rose by EUR 10 million to -EUR 42 million. The net loss narrowed from EUR 63 million- EUR 55 million. Overall, the third quarter shows that stronger demand is translating into higher sales and improved operating leverage. Looking ahead to 2027, however, we expect headwinds from freight, energy, and some energy-related materials. Energy, in particular, remains a notable cost factor.
Prices are comparatively high, and our significantly lower hedging ratio will provide less protection. Turning to the balance sheet, our financial position strengthened further during the first nine months. Total assets stood at EUR 4.9 billion at the end of September, up from EUR 4.8 billion at year-end 2025. Fixed assets decreased by EUR 127 million. While depreciation of EUR 362 million clearly exceeded capex of EUR 126 million, the resulting decline was partly offset by Singapore dollar currency translation effects. Inventories and receivables increased with higher business volumes. Inventories also remained elevated due to pre-production, most of which took place in Q2, ahead of the anticipated increase in demand. Liabilities in prepayments were slightly below year-end levels following the settlement of capex-related trade payables.
The most notable development was the EUR 200 million rise in cash and securities to EUR 734 million, primarily driven by the capital increase in June. The transaction also strengthened equity, which amounted to EUR 2.2 billion at the end of September, corresponding to an equity ratio of 45%. Net financial debt declined by EUR 217 million to EUR 620 million. Overall, our strong balance sheet provides substantial financial flexibility to support the anticipated market growth. Let me now briefly turn to our debt structure and maturity profile. As of the end of September, our debt financing instruments had a total volume of approximately EUR 1.46 billion.
This includes EUR 127 million available under our undrawn syndicated loan facility. The maturity profile is shown on the right. Following loan repayments of around EUR 35 million in Q2, a further EUR 64 million is due in Q4. Maturities exceed EUR 200 million in both 2027 and 2028. Cash and securities, together with our fully undrawn syndicated credit line, provide a solid liquidity position of around EUR 860 million. For the full year 2026, we expect net interest expense of around EUR 30 million. With that, let me hand back to Michael.
Thank you, Claudia. Turning to our updated end market outlook for 2026, the headline remains clear. Before inventory effects, we expect wafer area consumption to grow by around 7%. Although the overall growth rate is unchanged, the underlying market dynamics have become more pronounced. We expect AI server-related wafer consumption to increase by 50% year-over-year. The expansion of data center power infrastructure is also supporting industrial applications, with growth projected at 13%. At the same time, this strength is reshaping demand across the market. With tight memory supply and high prices, capacity is increasingly being allocated to AI-related applications. This adds further pressure on the smartphone market, where wafer area consumption is expected to decline by around 14% in 2026. Meanwhile, the outlook for PCs remains unchanged, with an expected decline of around 10%. Some memory customers are restocking their inventories, providing additional support for wafer demand in 2026.
Given the current market volatility around AI, I would like to briefly share my view. AI is the main growth driver of today, with no signs of a slowdown visible. Hyperscaler CapEx roadmaps are firmly in place and continue to be upgraded. Even if AI growth in the server and industrial end markets were to moderate somewhat in the future, a recovery in smartphones and PCs could provide a natural hedge for overall wafer demand. A key point for us is that wafer demand is supported by several growth drivers, not just one. What does this market environment mean for Siltronic? Beginning with volume, the wafer area sold in 2026 will clearly increase year-over-year, overcompensating the closure of our small diameter business. Demand for 300 mm has strengthened sequentially from an already high level, reaching an all-time high in shipments in Q3.
Our new capacity allows us to capture this growth. Loading is now close to full, while the ongoing fab ramp is adding further capacity. However, pricing has not yet kept pace with this volume development. We are seeing more positive pricing developments in the non-LTA business. For few wafer specifications with very strong demand, prices have already exceeded LTA levels. On average, however, non-LTA prices remain below LTA levels. It is also important to keep in mind that the vast majority of our 300 mm volumes are covered by LTAs, leaving only a limited portion of volumes available for negotiation outside these agreements. The recovery extends to 200 mm, where demand has rebounded strongly since the second half of 2025, supported by AI power supply. Loading is high, and staffing is now a constraint. Hiring is underway, which should support further moderate volume growth over the coming quarters.
After substantial declines in recent years, and again the first half of 2026, prices are stabilizing with the first positive pricing developments emerging. However, an unfavorable product mix continues to limit the benefit of higher volumes. Overall, the operational recovery is evident in higher volumes and strong loading across both diameters, while a broader pricing recovery has yet to materialize. Beyond volumes and price, FX remains a year-on-year headwind, although the impact is easing sequentially. Together with stronger demand, the more favorable exchange rate development supports our updated full-year sales guidance. We now expect 2026 sales to be in the range of 2025, rather than showing the low to mid-single-digit decline previously communicated. The updated outlook assumes a euro-US dollar exchange rate of 1.14 for Q4, compared with the H2 assumption of 1.18 underlying our previous guidance.
On a like-for-like basis, excluding FX effects and the close of our small diameter business, we expect sales to exceed last year's level. We have narrowed our EBITDA margin guidance to 22%-24%, at the upper end of our previous range of 20%-24%. We've also precised our Capex guidance to EUR 180 million-EUR 200 million, compared to EUR 180 million-EUR 220 million previously. Depreciation is now expected at EUR 480 million to EUR 500 million, slightly below the previous range of EUR 490 million-EUR 520 million. Our guidance for EBIT and net cash flow remains unchanged. EBIT is expected to be significantly below the previous year, while net cash flow is expected to be around the previous year's level. As always, full-year net cash flow remains highly sensitive to the timing of customer and supplier payments around year-end.
Before closing today's presentation, I would like to highlight another strong endorsement of Siltronic's performance, the recognition we continue to receive from our customers. I first presented this slide during our full-year 2025 results call in March. Since then, we have received additional awards from Infineon, Micron, and SSMC. Just last night, Samsung presented us with the Best Partner Award. Together, these awards recognize our technological capability, quality, operational excellence, and reliability as a long-term partner. With this, we conclude our Q3 2026 results presentation. Claudia and I are happy to answer your questions. Thank you very much for your attention. Bettina, please open the Q&A session.
Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. Please state your name and company name before posing your question. Again, press star one to ask a question. We will pause for just a moment to allow everyone an opportunity to signal for questions. Our first question today comes from Harry Blaiklock of UBS.
Good morning. Thanks for taking my questions. The first one is just on pricing. I think some people might be a bit confused as to why pricing hasn't started increasing more, given where utilization rates are. I was just wondering, in a typical cycle, what is the usual relationship between high utilization rates and spot prices? Do you normally see a two, three-quarter time lag before you see spot prices start rising, or how should we think about that?
Thank you, Harry. With regards to pricing, I think I can more or less explain a bit in more detail how this works. Two-thirds of our business is in LTAs. In other words, there are no major pricing changes around those, and the majority of this is allocated in 300 mm. Outside those LTAs, we see the pattern emerging that pricing did bottom out quite some time ago. We have seen our first upwards-trends emerging. We have few examples in, let's say, segments where demand-supply is really in a kind of almost shortage situation, where those spot pricings are exceeding LTA levels.
But on average, the spot pricing situation is still below the LTA level. I think it is not an unusual, let's say, pattern in such an upcycle that volumes come first and then pricing is following. As we explain here in great detail, the volume basis that has the potential to change prices also going forward is limited. In total, it is around one-third of the business max. What we see today is we are not there yet, but we see first indications that pricing is going in the right direction. I would summarize it is not unusual in terms of a cycle behavior.
Got it. Thanks, Michael. My second question is just on capacity. If you're looking kind of based on the current demand backdrop and your view of demand over the next coming years, do you sense that your incremental capacity to come online at FabNext will be enough to satisfy that demand? I know you've been clear that you need to see significant price increases to justify new greenfields, but what's your current sense on when that might be needed based on your current view of demand?
Yeah. Thank you, Harry. In terms of capacity versus demand, I think for the time being, our concept is working very nicely. Of course, we're operating close to full in both 300 mm and 200 mm. However, in 300 mm, we can add incremental capacity, and we're adding incremental capacity as we speak here. We didn't take major investment decisions to add more capacity. It will really depend how this game of pricing and future volumes will continue in the next quarters. Currently, we can fulfill a demand, but if prices would not pick up meaningfully, of course, there could emerge the situation, and I think it's pretty consistent with statements of our competitors, that wafers or at least some segments could be even more short in demand eventually.
It's now up to the industry to understand this and to appreciate the efforts that capacity extensions would require on the wafer side and bring, let's say, a pricing into the game that would justify also, let's say, the next wave of investments. In 200 mm, it's a bit a different situation. Currently, also the lines are operating very close to full. However, there's more flexibility in the system, because a lot of companies, and I would include ourselves there, did work on efficiency measures during the recent times where demand was very low. We did also idle some capacity and did work on headcount reductions. So, we're about to refill that, so that is an ongoing process. So, we will also see, let's say, incremental capacity increase over the quarters to come by this hiring of, or rehiring of people. So, that's how I would summarize those two segments.
Great. Thanks, Michael.
Our next question comes from Amelia Banks of Bank of America.
Hi, good morning. Thank you for taking my question. My first question is just on the Q4 sales guide. Looking at the full year, it implies about a step-up of 2% sequentially from Q3. I'm just wondering what's driving that versus the step-up we saw in Q3 of about 10%. Is that because capacity is getting full, or is it maybe we're seeing a bit of a memory restocking in Q3 that you don't expect to be repeated? Thank you.
Yeah. So, thank you, Amelia, for the question. We would never overemphasize the quarterly sales numbers as we continue to emphasize there might be always some phasing and other topics. Overall, if we look at the full year guidance, it leaves, I think, enough room for some Q4 estimates, which should be pretty precise in the meantime. We will not. In particular, when you compare with previous year, you might remember that our Q4 was particularly strong to some quarterly phasing in the last year's business development. Therefore, maybe Q4 will not continue with the increasing speed we saw in Q3 versus Q2. I think it's fully included in our full year guidance.
Okay, thank you. Then just lastly on margins. Again, looking at full year guide and what that implies for Q4, and sorry if that's not maybe the right way to think about it, but it implies quite a step-up if we look at the midpoint at around maybe 26% versus 23% in Q3. With your commentary of pricing not improving overall and maybe energy and freight costs rising, what is it that you're seeing here that can help you get to that step-up of the EBITDA margin in Q4? Thank you.
Yeah. Thank you. Primarily the volume trend is really helping, and it can, to a certain amount, offset the negative effects we see on the cost side. I think we were pretty clear around energy-related and energy cost. We were pretty clear about logistics and shipment costs. Overall, volume is maybe the key driver also of this margin developments, but maybe, Claudia, you want to add?
No, that's really the driver of the margin for Q4.
It's primarily volume, which is in a situation to overcompensate some of the negative cost burdens we were talking about.
Perhaps I could add, perhaps a bit of an FX, positive FX effect in Q4.
Okay. Thank you very much.
Our next question comes from Robert Sanders of Deutsche Bank. Please go ahead.
Yeah, good morning. Thanks for taking my question. Claudia, you mentioned that there would be a significantly lower hedging ratio in 2027, which would provide much less protection on some of the costs like freight, energy, polysilicon. Is there any way you can quantify that for our modeling purposes? It sounds like it could be something we should start modeling straight away. I have a follow-up. Thanks.
Good morning, Rob. Right now we don't do guidance for next year. That was just a little heads-up because especially energy prices, electricity prices in both of our major regions, Singapore and Germany, are right now very elevated. We have a disciplined approach to hedging, so we have avoided taking on substantial additional hedging for those electricity prices and oil components. So, if the energy prices stay at that level, there will be a headwind next year. Of course, right now, I can't comment on the amount, but perhaps we will see how those energy prices will evolve over the next few quarters.
Got it. My follow-up, again for Claudia. On the depreciation, I see the depreciation has come in slightly below your prior expectations. Should we read anything into that in terms of the ramp speed of FabNext? Obviously, some tools weren't I assume some of the tools that are installed are not necessarily running depreciation right now because they're not active. Is that right? Is that the explanation?
No, no.
Or is that another reason? Thanks.
No, no, no, definitely not. FabNext is ramping as planned, and as such, it is really supporting our market or our volume growth to support the market growth. As we move towards year-end, we always have a better visibility on the timing of equipment deliveries, installation, and hookup. That is not only FabNext. We also have, let us say, a huge amount of steady-state CapEx. With this higher transparency or visibility, we now expect depreciation to be at the lower end of our previous guidance. No change in our FabNext ramp. Definitely not.
Got it. Thank you so much.
Our next question comes from an analyst at Jefferies. Please go ahead.
Hi. Constantin Hesse at Jefferies. Morning, guys. Three questions from my side. I am sorry, I had some issues at the start of the call, so I am not sure if you discussed this, but your peers were talking about having conversations with customers pointing towards stronger price inflection at some point earlier in 2027. Are you receiving similar feedback here? That would be my first question.
Thank you, Constantin. I think it's a difficult question to answer. If we have negotiations in the spot market, typically it happens spot-like, so it's a bit more difficult to what will happen in, for example, Q1 next year. As I explained in the call, which you seem to miss, we see those upwards trends in certain segments in pricing. We see some spot prices in 300 mm now being above LTA, particularly in segments where demand is now even more shorter than some time ago.
I would be careful to talk about a big effect in the beginning of the year or something like that. We have discussions with customers around future LTAs. Currently, it's nothing concluded, but we said also we feel that time is in our favor right now. We're talking to a couple of customers here in parallel to figure out really where could the best deal sit for us, and of course, pricing is on top of the agenda there.
Okay. Thanks, Michael. Maybe one question just on the remaining CapEx that you have for Singapore. I mean, there are lots of numbers being thrown around, but is it fair to assume that in order to even consider additional CapEx program in Singapore, prices would have to rise substantially still from the level that we are today?
There are two things, the capacity one is, yeah. Capacity is still growing in Singapore as we speak now, and will continue to grow for a while, yeah. So we feel kind of nicely set up to cover further demand coming in. At a certain point in time, of course, that will not work anymore, and for that, we have lead times to consider, so we would need to come to an investment decision.
And what we say is the current pricing, and I think this is pretty much in line what the industry says, is not supporting those additional investments. That's exactly in conjunction with what I just said. We have conversations with multiple customers also about future volume commitments in LTAs, including prepayments and let's say the usual sort of setups. Here, pricing needs to move further before we would say as a company we do a next wave of significant investments.
Just to understand, Michael, this next wave of significant investments, we are talking about brownfield still, right? Not greenfield.
Yes, brownfield, yeah.
Okay, understood. Then just another one. Q4 is pointing to a negative cash outflow, despite improved EBITDA. Is that just because of timing of payments, Claudia, or what is on the background here?
Yes, it really depends on, let's say, working capital development in Q4, especially regarding trade payables and receivables, so the payment customers and suppliers. That's really a bit of a question mark towards year-end regarding, let's say, payment discipline and so on. There might be some changes, but as we see it right now, that's our guidance.
Okay, understood. Just lastly, Section 232 in the U.S., polysilicon tariffs are coming, I think effective end of the year. You're generating about EUR 130 million, EUR 140 million revenue in the U.S. Last time I saw, if I assume 30% margins, I think it's a 15% tariff. Are we talking about a headwind of some EUR 5 million+ potentially next year of this?
Yeah, thanks, Constantin. To make it short, yes, you did a good job in estimation. It's the first wave of these tariffs that will unfortunately also hit us a little bit. It will not be a major effect. We also can say today it would be around single digit for the next year. Those tariffs you mentioned will become effective beginning of December this year, therefore we would not see a significant contribution in this year's closing or for the rest of this year. But you're right, and you're spot on, the estimate for next year will be a headwind of around single digit million for us.
Perfect. Thank you so much, guys.
Thank you.
Thank you.
Our next question comes from Florian Treisch of Kepler. Please go ahead.
Yes, good morning all. Thanks for taking my questions. My question is also a bit around the Singapore kind of build-out or ramp-up, continuing what you have kind of stated some quarters ago. The question for me is a bit, can you really accelerate it from here, or what needs to trigger you to accelerate the ramp-up of Singapore alone? I mean, I'm not talking about, let's say, greenfield and much higher prices for now, but really on, let's say, the coming quarters to really offer enough capacity to the market. And then related to that, around prices, if you ramp up more capacities in Singapore quicker, the related LTAs on those capacities, are they implying positive pricing compared to current average prices, or are they still dilutive? Thank you.
Thank you, Florian. The first question, how to accelerate. I think we already are in discussions with our suppliers who have the longest lead time. We didn't take major decisions, but we're warming up and we are ready to act quickly if we see the market, in particular the pricing, is going in the right direction, which we currently have early indications, but it doesn't materialize yet. We feel comfortable that if that situation turns, we can also act relatively quickly, of course, in the framework of the lead times we were describing earlier, 18 months, and in some areas even a bit more. I think here we would be ready to sprint if the market really supports it with pricing.
The existing LTAs typically are fixed prices, so the assumption would always be that you cover your margin with higher volumes, because typically, as you indicated, those LTAs increase in volume. There are also LTAs which have price corridor, which of course we would then try to direct in next year whenever there would be new opportunities to the upper range of that price corridor. These are the two cases. Some are fixed, so there would be a volume effect where we would benefit from efficiencies, and the ones we have price corridors, of course, we would try to bring this at the upper end.
Okay. Thank you.
We will now take a question from Gustav Froberg of Berenberg. Please go ahead.
Good morning, everyone. Thank you for taking mine also. Just one from me. Just looking back a couple of years to your last Capital Markets Day, when the environment was looking a bit better pre sort of the cyclical downturn we have seen. You were talking about EUR 2.2 billion positive revenue with high 30s EBITDA margins for 2028. I know that has not been on the cards for some time, but given the change in environment and the picture you are seeing right now, is that now back on the table again, or are there any reasons why, with Singapore not being dilutive, et cetera, and ramping nicely, that we cannot see those financials come through for you in the next, well, two years?
Yeah. I think we paused already the timing of this midterm ambition and said clearly it will not happen in 2028. I think I can reconfirm today. We are in a new environment. There was a certain FX assumption at that point in time. There were certain price and cost assumptions. Currently, we are in a different world, so I would not overemphasize currently, let us say, more historic midterm ambition. We need to make up our mind how to deal with this, but it will definitely not happen in 2028.
Okay, great. Thank you.
Our next question comes from Maissa Keskes of ODDO. Please go ahead.
Yes. Hello, everyone. One of your competitors recently mentioned early sign of precautionary inventory building among customer, driven by expectation of tighter wafer supply and higher prices in 2027. Are you observing similar behavior among your customer, and do you expect this trend to become more pronounced over the coming quarters?
Thank you, Maissa. Yes, we see also some of our customers building inventories. It's a very mixed picture. Some seem to grab some more wafers than they currently consume. Others seem to be more loose about this. So a mixed picture, yes, but I can confirm that some of our customers also do build up inventories right now, which is currently improving wafer demand in the current situation.
Okay. Giving the positive signal across the industry with demand expected to increase further, wafer prices are improving, why do you remain a little bit careful about 2027 compared to your peers?
I don't think we made any, let's say, precise or firm 2027 statement, and I also wouldn't say we are different to competition in any sense right now with, let's say, estimating the overall market environment and the growth. What I can say is our market share in this space is stable, so therefore, we do not see, let's say, a meaningful difference between our development and competitors' development. There is a singularity with the fire in the production plant of one of our competitors, which will maybe bias short term a little bit the numbers, as you might have seen in the Q3 reportings. But besides that, I wouldn't see a meaningful or specific difference we communicated compared to our competitors. And we didn't guide yet 2027, so in that sense, I don't think we are different than anybody else in statements around 2027.
Okay, thank you.
We will now take a question from Veysel Taze of Bankhaus Metzler. Please go ahead.
Good morning. Veysel Taze of Bankhaus Metzler. Few questions. One on the short term. Regarding your Q4 comments, I was wondering if you can add a little bit color why you think that Q4 incremental revenue addition would be not as strong compared to, yeah, the shift from Q2 into Q3, given that, yeah, some projects in semiconductor fab build-out and also in memory, et cetera, capacity expansions have been rather pushed forward and accelerated. Then, I know you don't comment on 2027 at this stage, but what would prevent an analyst from assuming that the Q4 run rate in revenues would be similar in Q1? Do you think there is some seasonality or other factors which would imply that Q1 2027 would be not at least as strong as exit from the Q4?
Yeah, thank you, Veysel, for these questions. With regards to quarterly phasing, I would maybe reiterate, don't overestimate. There are always certain phasing effects and year-end effects and so on and so forth. So, if you take our full-year guidance and subtract our Q3 year-to-date, you get a pretty good Q4 estimate. It's a bit lower maybe in terms of growth rate versus Q3 than what we see right now versus Q2, but that's more, let's say, the normal operating fluctuations, particularly in a situation where some of our lines are really fully booked, and we're adding continuously some new capacity, which is not coming in every day, but more at certain point in time.
So I think that's more the normal noise of a business ramp. Whether or not Q1 next year will be like Q4 and whether you can take that four times, I think it is all a bit speculative. As we, of course, do not talk about full year 2027. For sure, we cannot give any more color on Q1 2027. From that perspective, I am not really comfortable to answer this in more detail.
Got it. But for your Q4, you probably know the volumes. This price would be rather more on the 200 mm, but on the pricing side, for 200 mm and then 300 mm non-LTA part, right? That would be the, if there is some surprise, then from there. The volumes are, you have quite good visibility for Q4, right?
I think in a certain way, you could say Q4 is almost in the pocket. Those shipments are underway. Let us say all the deals are, pretty much all the deals are negotiated and concluded. So in that sense, we have pretty good visibility about Q4. There could be always, as I hinted, some year-end effects, where some shipment still happens in late December or falls into early January, but that is again the more normal phasing between quarters. So I think if you take the full year guidance, you get a pretty good estimate for Q4 already, and we do not expect any special surprises from the view we are having right now.
Got it. Then, I know this topic has been discussed in previous calls as well, your LTA structure looking into 2027 and 2028. When you signed the LTAs at the peak of last upcycle, 2021, 2022, I do not think that memory customers and foundry customers were planning into their LTA agreements such capacities what we are seeing now or demand what we are seeing in AI. Historically, memory customers were planning LTAs for probably one and a half year, foundries two to three years.
But now AI has been much stronger, right? I think a lot of LTAs are now coming to an end, in my view, because we are now four or five years into this. Then the volume part is much stronger. So can you give a little bit color what your LTA structure looks like? What are the customers discussing with you in terms of securing 2028 and beyond volumes? If you could share a little bit more insights, that would be really very helpful.
Yeah. Thank you. The LTAs we concluded around the new fab in Singapore, some of them run quite a long time, yeah, and we were pretty clear, yeah, 2030 is a good number for some of them. With the very soft demand in recent years, we have some of the LTAs, as you might recall, we had to take out some volumes, which some of that was added at the end of the LTA terms. So in fact, there's a whole bunch of LTAs that are really long term. You're also right, yes, some of the LTAs will expire in 2027 and 2028, and that, of course, are opportunities in the current environment to get better conditions in renewal or in different LTAs that could cover that volume.
We also have the situation that indeed some customers, and we are in active talks with a few of them, are approaching us to talk about their midterm demand and that it could be maybe higher than they historically anticipated. So that's exactly the situation where we now would look for, let's say, very positive environment to capture a better pricing in those future-directed LTAs. So it's a mixture, yes, we have a flow of existing LTAs that will continue. Some of them will expire, but also we are already in the process of looking for new volume commitments with a few customers. That is where the pricing still needs to materialize more in our favor before we really would conclude future-directed deals.
Got it. Final question. One of your main competitors came already with results, and they indicated really that they are not willing to invest in really greenfield capacities if prices don't move much higher than, I guess, the historical range in upcycles over two years, between 20% and 30%, and this time they will demand much higher prices for greenfield investments. I was wondering what is your strategic thinking about that? Is it only the pricing that it has to go much higher, or would you be willing to go for greenfields if the down payments are much higher? So what is your strategic thinking on this?
Yeah, currently we do not have an active greenfield discussion here in the company because we still have quite a bit of room to fill in Singapore, yeah. But strategically, I think it's a very valid question, and indeed, we would look at different packages in terms of pricing, prepayments, and volume and specifications and other parameters. As you know, the world changed quite a bit. We have significant inflationary effects. What we also see is, of course, the effort to make those leading-edge and advanced logic wafers is, on the cost side, did increase. Some of that is captured by efficiency via volumes. But looking into the future, yes, we would see maybe different frameworks to justify new greenfield investments as well. I think it's pretty consistent with what you quoted from one of our players in the field.
Thank you very much.
As a reminder, to ask a question, please press star one on your telephone keypad. We will now take a follow-up question from Constantin of Jefferies. Please go ahead.
Yeah, thanks. Sorry, it was just a very quick follow-up, but the previous question kind of hinted towards it already. I was just wondering then, given the amount of fab capacity that will come online by the end of 2028 at the chip level, is Singapore enough to satisfy that demand, or would we already have to potentially grow capacity beyond that? I mean, you must be looking at that in your internal models already, so I'm just wondering if you can give us a bit of color.
Yeah, currently, Constantin, we still feel good with Singapore. Singapore, we made it very clear, it's a huge fab, and we just in the middle of it. So there is quite some space in Singapore which we need to then decide to bring in the machines and the equipments and the tools, which we currently did not yet. So that would be the first consideration for us. Then going beyond is the next discussion, which we currently did not start.
As I hinted in the earlier question already, for such a over-next discussion, we would need a different framework. Otherwise, the investments could not be justified. So, that is the current view. I think it's pretty consistent around the industry, and we need to come to a situation where some of the chip makers now, of course, are earning very nice money, need to share some of that with the value chain to make the overall system work again.
Yeah, on the pricing, I completely understand. I just wanted to understand that from a volume perspective, is Singapore enough to cover all this? I mean, there's a huge amount of capacity that's hitting the market in 2028, so I'm just wondering if Singapore is enough for that.
We don't guide to 2028. We have some first numbers from SEMI and others, so we feel okay with that, but it could come tight afterwards. So I think.
Yeah.
It is now coming the time where those additional investments either are triggered and justified with also the better pricing environment, or it could lead to a certain tightness, at least in some specifications later on.
Perfect. Thank you so much.
This will conclude today's question and answer session. I would now like to turn the call back to Verena for any additional or closing remarks.
Thank you, Bettina. This concludes our Q&A session. Thank you for joining us today. We will publish our preliminary full-year figures on February 3, 2027. The full set of numbers will be published then on March 11, 2027. On this slide, you can also see our next IR events. Thank you and have a good day.