(Reuters) -German semiconductor materials supplier Siltronic upgraded full-year guidance on Thursday despite reporting first-half sales down 14% owing to weak demand for its products.

The company, which makes silicon wafers used in semiconductor chips, now expects 2024 sales to decline by a high single-digit percentage, against its previous forecast of a 10% fall.

Its margin on earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to be between 23% and 25%, compared with the previous target of 21-25%.

"On a positive note, the end markets, partially driven by artificial intelligence (AI), will grow this year," CEO Michael Heckmeier said in a statement.

A German trader said the full-year guidance upgrade was not expected but quarterly results exceeded expectations.

"We see the risk/reward of the shares positively as the downturn is well advanced and the upturn should materialise going into 2025," Stifel analyst Juergen Wagner said in a note, adding that second-quarter results were better than feared.

Second-quarter sales rose 2.3% to 351.3 million euros ($380.81 million).

Shares in the company were seen up 4.4% in early Frankfurt trade.

Siltronic had lowered its 2024 guidance this year, saying its clients were reducing inventory levels more slowly than anticipated as demand for consumer electronics wanes.

($1 = 0.9225 euros)

(Reporting by Ozan ErgenayEditing by Subhranshu Sahu and David Goodman)