By Ozan Ergenay

(Reuters) -German semiconductor materials supplier Siltronic expects no increase in sales this year after a 7% drop in 2024, citing high inventory levels, it said on Tuesday.

"For the year 2025, we anticipate that the growth in the end-markets, primarily driven by AI, will not yet be reflected in our wafer demand due to the persistently elevated inventory levels in the value chain," CEO Michael Heckmeier said in a statement.

Its shares, which lost around 47% last year, were down 8% in early Frankfurt trade as of 0713 GMT.

Siltronic, which makes silicon wafers used in semiconductor chips, anticipates that the first half of 2025 will be considerably weaker than the second half of 2024.

The German company also said its mid-term targets for 2028 were expected to be realised after the year 2028. It did not give a new timeframe.

"The weak guidance is another disappointment," Stifel analyst Juergen Wagner said in a note, adding it could lead to a more than 20% revision to 2025 earnings per share forecasts.

Last week, STMicroelectronics, one of Europe's largest chipmakers, flagged that it was too early to give forecasts for 2025 as a downturn seen in its key automotive and industrial markets drags on into the new year.

Siltronic also cut its dividend late on Monday and said it would propose a reduced payout of 0.20 euros for the financial year of 2024.

The company reported preliminary 2024 revenue of 1.41 billion euros ($1.45 billion), down from 1.51 billion euros a year earlier, versus expectations of 1.40 billion euros, based on a poll by Vara Research.

It said it will give a more detailed outlook at the release of its annual report on March 6.

($1 = 0.9713 euros)

(Reporting by Ozan Ergenay; Editing by Christopher Cushing, Sherry Jacob-Phillips and Louise Heavens)