Irrespective of where oil prices or bond yields are heading. Irrespective of the safety concerns and the supposed sage advice from the industry leaders to slow down. Artificial intelligence remains the “it” thing on Wall Street, and mere mention of any connection with the revolutionary tech is enough to send a company's stock on a searing rally.
That is what happened with SCHMID (SHMD), the German industrial tech company. Shares popped more than 20% last week on Friday after reports emerged that chip giants, such as Nvidia (NVDA), AMD (AMD), and Intel (INTC), are considering the use of glass substrates.
In the company's Q2 earnings call, Roland Rettenmaier, the company's Chief Sales Officer, said, "A lot of players in the Intel supply chain, in the Nvidia supply chain, AMD supply chain, you name them, are putting an eye on glass core substrates, in terms of its flatness, its smoothness, in terms of diverse constants like dielectric constants and signal integrity. So we are engaged with most of the major of the supply chain players, and we are supporting them with our technology and equipment to make glass core substrates real."
About SCHMID
Founded in 1864, SCHMID develops and manufactures specialized equipment, software, and process solutions used in producing printed circuit boards (PCBs), semiconductor substrates, advanced packaging components, photovoltaic products, glass, and energy-storage systems. The company primarily sells the specialized machinery and process technologies that manufacturers use to produce complex electronic components.
Valued at a market cap of $252.6 million, SHMD stock is down 29.4% YTD.
So, can SCHMID's faltering stock stage a turnaround on this development? Let's find out.
Feeding Glass Substrates
To set the record straight, SCHMID does not manufacture glass substrates itself. It develops and supplies the process technology and specialized equipment that substrate manufacturers use to produce them. Moreover, the company itself describes its glass-substrate activity as being focused on R&D, pilot lines, and early engagement with original-equipment manufacturers, with volume adoption expected over the medium to long term.
In fact, one of its potential customers is a notable glass substrate manufacturer. Intel is one of the most prominent technology developers in glass-core substrates, having publicly demonstrated test substrates and outlined potential advantages over conventional organic materials. Its research highlights include better dimensional stability, reduced warpage, improved signal integrity, and the possibility of fitting more dies into a given substrate area.
So, how can SCHMID take advantage of the potential rise in demand for glass substrates? Here, SCHMID's expertise in wet chemical processing, plasma etching, chemical-mechanical polishing (CMP), automation, and large-panel handling can serve it well. Then, one of SCHMID’s key offerings is its InfinityLine L+ full-panel CMP system, which is designed to polish and planarize large substrate panels. CMP is important because advanced packaging requires highly uniform surfaces for subsequent layer formation and bonding.
Further, its proprietary Embedded Trace (ET) process is another part of its differentiation. It forms copper traces within dielectric material rather than simply placing patterned copper on the surface. SCHMID says this approach can enable finer structures, improved planarity, and more flexible 3D interconnect designs.
SCHMID's Finances Sigh
The excitement around SCHMID may turn into something concrete in the future. However, for now, the company's finances do not evoke much excitement.
Although revenues for the first six months of 2026 surged to 46 million euros from 16.9 million euros in the same period last year, net losses widened to 47.8 million euros from 10.2 million euros in the year-ago period. Yet, the widening of losses cannot be fully attributed to operating issues, as a conversion of liability into company shares contributed to the losses.
Having said that, order momentum is gaining, as sharp sequential growth was witnessed in the same period this year. While order intake was just 13.6 million euros in the first quarter, it accelerated to 30.7 million euros and 52.3 million euros in Q2 and Q3 (through August 21), respectively. The company also raised its order intake guidance for 2026 to 125 million to 150 million euros from 114 million euros earlier.
Cash flow from operating activities continued to remain negative at 29.3 million euros for H1 2026, as SCHMID ended the period with a cash balance of 2.3 million euros. This was much lower than its short-term debt levels of about 40 million euros.
Concluding Take
SCHMID has talked about how glass substrates can be a potential game-changer for the company, and murmurs from the top players of its usage for their chips have sent SCHMID shares soaring. Moreover, SCHMID has some technological advantages and expertise in building the manufacturing prowess that is required for glass substrate production. Yet, that is all mere speculation now. One should at least wait for the next earnings call, where the management should provide more color regarding capacity, the proportion of orders attributed to glass substrate, and any key customer wins on this front.
Finally, all this has to be built in a manner that is financially viable, as the company's finances are already under strain. Navigating through all of these issues will be a difficult task, and only when the company can signal strongly that it is able to do that can an investment in the stock be considered. However, for now, I would give SCHMID a pass.
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.