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FRANKFURT, Aug 3 Reuters Germany39;s Merck KGaA on Thursday warned of a steeper earnings decline due to a slump in demand for materials used to produce pharmaceuticals and semiconductors, as its hightech niche markets get drawn into a wider downturn.

In a statement, it cited persistently high inventory levels of our Life Science customers, the further delayed recovery of the market for semiconductor materials, an increased cost level due to inflation and an even stronger negative foreign exchange impact.

Earnings before interest, taxes, depreciation and amortisation EBITDA, before oneoffs, would fall between 3 and 9 this year, when adjusted for currency swings, the diversified company said.

The foreign exchange effects would be an additional drag of between 3 and 6, it added.

It had previously forecast 2023 adjusted EBITDA would be flat to down 5, with a negative foreign exchange effect of 2 to 5.

The company also reported a 12.8 decline in secondquarter adjusted EBITDA to 1.55 billion euros 1.69 billion but the stock was up 2.7 at a sevenweek high at 0845 GMT as analysts said the market had braced for a worse outcome.

Merck39;s business that makes speciality chemicals for microchip production, which had previously been expected to recover during the second half, is now projected to…