Merck KGaA, Darmstadt, Germany, said in its third-quarter results on 12 November that net sales of its Semiconductor Solutions unit rose 18.7% organically to €752 million, driven by demand for advanced nodes for logic and memory chips used in AI applications. Group net sales rose 5.1% organically to €5.6 billion, and the company raised its full-year guidance.
By our arithmetic on the release’s table, the chip-materials unit added €121 million of the group’s €309 million increase in net sales, or 39%, while making up about 13% of group sales.
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The key insight: As we read the release, the AI demand reaches Merck KGaA through the materials in each wafer rather than through chips of its own: the company says AI chip architectures need more material content per wafer and tighter process control, and its chip-materials unit grew 18.7% organically while the group grew 5.1%.
The Electronics business sector’s net sales rose 13.3% organically to €948 million, the company said, “driven in particular by demand from data centers and AI-related applications”. The reported increase was 8.4%, after a 5.7% portfolio effect from selling the Surface Solutions unit.
Electronics EBITDA pre rose 18.4% to €279 million, and its EBITDA pre margin was 29.5%, up from 27.0%, according to the Quarterly Statement. Semiconductor Solutions made up 79% of Electronics sales, up from 72% a year earlier.
The release says AI applications “require increasingly complex chip architectures with higher material content per wafer and tighter process control”. The Quarterly Statement says the unit’s growth accelerated from the second quarter and came from advanced nodes in artificial intelligence as well as mature nodes.
Semiconductor Solutions, Merck KGaA’s chip-materials unit, had net sales of €752 million in the third quarter of 2026, 13% of the group’s €5,627 million, and added €121 million of the group’s €309 million increase over the year-earlier quarter, or 39%. Shares and differences are our arithmetic on the release’s tables; the increase is in reported net sales and includes currency and portfolio effects.Merck KGaA Electronics net sales by business unit in the third quarter, in euro millions, from the release table; prior-year figures as adjusted by the company for an internal realignment. Surface Solutions was divested.
Where the Group’s Growth Came From
Group net sales were €5,627 million, up from €5,318 million. Semiconductor Solutions grew from €631 million to €752 million, and Process Solutions, the life-science manufacturing unit, grew from €949 million to €1,069 million; by our arithmetic, the two units each added about €120 million.
Optronics, the display-materials unit, fell 0.9% organically. The company said “High prices for memory chips continued to weigh on end customer demand for consumer electronics”, which lowered demand for liquid crystals.
Group profit after income tax fell 49.9% to €450 million, and EBIT fell 46.5%. The Quarterly Statement attributes the EBIT decline mainly to impairment losses in connection with divesting the North American CDMO business of Life Science; EBITDA pre rose 0.8% to €1,682 million.
The Guidance and the Investments
For 2026, Merck KGaA now expects group net sales of €21.5 billion to €21.9 billion and EBITDA pre of €6.2 billion to €6.4 billion. For Electronics, it guides to about €3,600 million in sales, up 10% to 11% organically, and about €1,100 million in EBITDA pre, up 33% to 35% organically.
The Quarterly Statement says that Electronics growth rate includes a €43 million sale of OLED patents in the first quarter and a lower 2025 base after negative one-time effects. The company also opened a materials R&D facility in Sheboygan, Wisconsin, part of a US$200 million multi-year investment, and a molybdenum materials line in Eumseong, Korea, expected to begin commercial production after customer qualifications in 2027.
CNBC published a video interview with Group CEO Kai Beckmann on results day under the title “AI partnerships go beyond Nvidia: Merck KGaA CEO”. CNBC’s description says Beckmann reflects on investment in the AI sector and the company’s partnership with Nvidia. We did not have a transcript and quote none of his remarks from it.
In the release, Beckmann named “semiconductor manufacturing that supports AI and advanced nodes” among the company’s growth markets. On 21 October, Merck KGaA announced a collaboration with NVIDIA, Microsoft and Dawn Health on AI-facilitated patient support programs for people living with rare tumors.
The Structural Read
As we read the table, a unit with about 13% of group sales supplying 39% of the increase in net sales, by our arithmetic, means the AI-linked part of the business now moves the group total out of proportion to its size.
As we read the guidance, the 33% to 35% organic rise in Electronics EBITDA pre is not all AI demand: the Quarterly Statement also credits a €43 million OLED patent sale and a lower 2025 base.
“These applications require increasingly complex chip architectures with higher material content per wafer and tighter process control.”
Three Implications
FOR MERCK KGAA Semiconductor Solutions made up 79% of Electronics sales in the quarter, up from 72% a year earlier, according to the release table.
FOR CHIP-MATERIALS DEMAND The company tied the unit’s growth to advanced nodes for logic and memory chips used in AI applications, and the Quarterly Statement adds mature nodes.
FOR THE GROUP Profit after income tax fell 49.9% to €450 million, which the Quarterly Statement links mainly to impairments tied to the CDMO divestment, while full-year guidance rose.
The framework says that “the real strategic advantage lies buried in processing facilities most tech executives have never visited, handling materials most engineers never think about.”
As we read it, a materials supplier whose chip unit supplied 39% of its sales increase, by our arithmetic, is one quarter’s trace of that layer in a company’s accounts. The framework predates these results and does not discuss Merck KGaA.
What Is Not Established
The release does not give a figure for AI-related sales on their own; the AI link is the company’s description of what drove the unit’s demand, alongside mature nodes. Our 39% is a share of the reported increase in net sales, which includes currency and portfolio effects, not of organic growth.
We had no transcript of the CNBC interview and do not know which Nvidia partnership it refers to. We did not contact Merck KGaA or CNBC for this piece.
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Merck KGaA’s Semiconductor Solutions unit grew 18.7% organically to €752 million in the third quarter, on demand the company tied to AI chips, and by our arithmetic supplied 39% of the group’s increase in net sales. The company now guides Electronics EBITDA pre to about €1,100 million for 2026, up 33% to 35% organically.
A note on sourcing. We read Merck KGaA’s third-quarter 2026 results release of 12 November in full, together with the Electronics, impairment, EBIT and forecast sections of its Quarterly Statement as of September 30, 2026, and the company’s 21 October release on its collaboration with NVIDIA, Microsoft and Dawn Health. For the CNBC interview we read the video page and its description; we had no transcript. The shares and differences are our arithmetic. We did not contact Merck KGaA or CNBC.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
