Construction boom in the chip industry drives sales of plant manufacturers

Stuttgart Hardly any other company in the world is benefiting as much from the construction boom in the chip industry as the system manufacturer Exyte. The year 2022 was extremely successful for the turnkey specialist for clean rooms, CEO Wolfgang Büchele told the Handelsblatt: “According to preliminary figures, we have clearly exceeded our forecast of seven billion euros in sales with growth of around 50 percent.”

Corona, Ukraine war, supply chain problems – the Swabian medium-sized company, which operated under the name M+W Group until 2018, seems to be able to cope with all crises. Exyte has also become more profitable, explained Büchele: “The result has grown slightly faster than sales.”

In 2021, earnings before interest and taxes (EBIT) were 263 million euros. Last year’s operating result is likely to have far exceeded the 400 million euro mark. The company intends to present exact figures in a few weeks.

Exyte is thus decoupling itself from its most important customers: According to market researchers at Gartner, the chip industry grew by one percent last year. Experts expect that the industry will even shrink this year.

Exyte is quite different: Büchele assumes that things will continue to improve rapidly. Because incoming orders also exceeded sales in 2022. The fact that the world’s leading chip companies such as Intel and Samsung are currently struggling with overcapacity leaves the 63-year-old CEO cold: “Our customers plan their investments in systems for the long term.”

Just last week, regular customer Infineon announced that it would start construction work on a new plant in Dresden in the fall. The Dax group wants to invest five billion in the factory, it is the largest project of all time by the leading German semiconductor manufacturer.

Exyte is a pioneer in clean room technology

The former Linde boss Büchele has been running the Stuttgart company for six years now. And with increasing success. To this end, the doctor of chemistry has consistently eliminated low-margin projects and said goodbye to regions where business was no longer worthwhile. Even before the attack on Ukraine, Exyte withdrew from Russia.

Büchele sees Exyte as a leading provider for the planning, development and construction of high-tech systems, especially chip factories. The company achieves around 80 percent of its sales with the semiconductor industry. The group earns the rest with data centers and the pharmaceutical industry.

>> Read also: This is how a medium-sized Bavarian company became a sleuth of the chip industry

The name is hardly known to the public, but Exyte has a long tradition: the company, founded in 1912 by Karl Meissner and Paul Wurst, is one of the pioneers of clean room technology. In the past 30 years, however, the owners have changed frequently, and the bosses even more frequently. The company has belonged to the Austrian Georg Stumpf since 2009.

In 2018, Stumpf wanted to take Exyte public, but the growth story didn’t catch on with investors, and so the plan failed. Last November, the US investor BDT Capital Partners announced that it would take over around a third of the shares. Büchele believes that this could benefit the group: “I expect that our future minority shareholder will open one or the other door for us in the USA.”

Intel factory in Ireland

In Leixlip, Ireland, Exyte works for the US group Intel.

(Photo: NurPhoto/Getty Images)

The USA is the most important future market for Exyte. Nowhere are there currently so many chip factories. “The USA is clearly ahead, Europe is lagging behind,” Gunther Kegel, President of the German industry association ZVEI, recently told the Handelsblatt.

The preference of the chip industry for the USA has tangible reasons. The Washington government provided $52.7 billion in state aid to corporations last summer. Europe, on the other hand, is still debating possible support. The EU Commission has set the goal of doubling Europe’s share of global chip production to 20 percent by 2030.

“Politicians in the USA are more willing to make decisions and implement them faster than Europe,” says Exyte boss Büchele. “While the strategy is still being discussed here, the money is already flowing in the USA.”

Industry observers are alarmed: “We have to be careful in Europe that we don’t become an industrial museum,” warns Jan-Hinnerk Mohr, semiconductor expert at the Boston Consulting Group. Because America will probably increase its share of world chip production in view of the high investments in the middle of the decade.

From Intel to Micron and Samsung to the Taiwanese contract manufacturer TSMC, the leading chip companies are currently investing billions in America. Exyte is benefiting from this – and is increasing its workforce in the USA: “We will be doubling the number of employees there to around 1,500 this year,” said Büchele.

>>Read here: Dependence on Asia worries German companies

However, it is not only due to the subsidies that Exyte currently has a lot to do in America. According to the manager, the major US chip manufacturers have the advantage in their home market that they can build on existing infrastructure at existing locations. This makes the decision to build a new factory easier.

A robotic dog controls the construction site at Exyte

Intel, on the other hand, has to start from scratch in Magdeburg. The second largest chip manufacturer in the world announced last spring that it would invest 17 billion euros in Saxony-Anhalt. Since then, however, the Americans have been wrestling with the federal government over the amount of the subsidies. Should Intel actually build on the Elbe, it would finally be a home game for Exyte.

It seems likely that the Swabians will get the order – even if Büchele doesn’t say a word about his major customer. Exyte recently built a new plant for the US group at an existing location in Leixlip, Ireland, and also works for Intel in Arizona. Exyte usually books between 20 and 25 percent of the total investment sum for itself.

The biggest problem for the company is finding enough qualified staff. “We’ve had to turn down orders because we didn’t have the right teams available at the time,” Büchele admits. Around 9,000 people work at Exyte, and 1,500 are expected to join this year.

The shortage of staff leads to unconventional approaches. In Halle, Exyte is building a new mRNA competence center for the chemical company Wacker. “We will soon have a robotic dog monitor the construction progress,” reported Büchele.

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