Germany’s big industrial names hog the headlines, but a clutch of lesser-known small and mid-caps are doing the unglamorous work that makes modern tech—and the next leg of AI-driven automation—actually function. They live in long qualification cycles, sell mission-critical components, and win by compounding know-how rather than marketing budgets. Here are five that deserve a closer look:

PVA TePla — Crystal growth and metrology at the materials frontier

PVA TePla makes systems that grow and test advanced materials—think silicon carbide boules and ultrasonic/optical inspection that decide whether a wafer is good enough to ship. 2025 hasn’t been linear: first-half revenue fell 11.6% to €119.6 million as project timing shifted, but order intake jumped to €103.6 million, with metrology now a co-engine of growth and a book-to-bill of 0.87 hinting at improving momentum into the back half. Management quietly strengthened the portfolio with two metrology-adjacent deals (automation partner desconpro and optical-inspection outfit PVA Vision) and kept gross margin rising to 33.3% despite lower volumes—evidence of mix and process leverage. For investors, PVA is a classic “earn the right to grow” story: small base, rising metrology content, and exposure to SiC and heterogeneous integration without taking foundry-level risk.

SÜSS MicroTec — The backstage pass to advanced packaging

If chiplets and HBM are the headliners of this cycle, SÜSS supplies parts of the backstage: coaters/developers, mask aligners and, crucially, wafer and hybrid bonders that make 3D stacking possible. The numbers tell a nuanced tale. In H1 2025, sales rose 38% to €266.4 million and EBIT margin reached 15.7%, but order intake softened 13% as customers worked through 2024’s buying spree and scrutinized new capacity. That push-pull is typical for back-end tools: installed base and recipes create stickiness, yet orders ebb with capex windows. The medium-term logic remains intact—more packaging intensity per transistor—and SÜSS sits where that value accrues, particularly as hybrid bonding shifts from pilot to scaled adoption. Near term, watch gross margin execution and the mix between bonders and legacy front-end paraphernalia; over time, the company’s deep process IP and service footprint are what keep rivals at bay.

Jenoptik — Photonics plumbing for chipmaking and beyond

Jenoptik isn’t a pure semiconductor name, but its photonics subsystems—precision optics, modules and metrology—are increasingly welded into EUV/DUV supply chains and high-end life-science gear. 2025 has been a reset year: first-half revenue slipped 7.8% to €498.4 million and EBITDA landed below the prior year, prompting management to steer investors to the lower half of its margin and growth ranges amid tariff jitters and pockets of weaker utilization. Yet beneath the near-term caution sits a sturdier structural story: cleanroom execution in Jena and Dresden, rising optics content in complex equipment, and long OEM integration cycles that make Jenoptik hard to dislodge once designed in. If trade frictions ease and semiconductor mix normalizes, operating leverage should return; in the meantime, a diversified portfolio helps cushion the blows that single-segment specialists have to take on the chin.

Elmos Semiconductor — Fabless, focused, and built for auto cycles

Elmos designs mixed-signal ASICs that quietly proliferate through cars: sensor interfaces, LED drivers, motor control and power housekeeping that must work for a decade in heat and vibration. After selling its Dortmund fab at the end of 2024, Elmos is effectively fabless, sharpening capital intensity and flexibility just as the content per vehicle continues to rise. For 2025, management guides to ~€580 million in sales (±€30m) and a 23% EBIT margin (±3pp), even after adjusting for FX headwinds. The edge isn’t a single blockbuster chip; it’s years of functional-safety know-how, automotive qualification, and customer-specific designs that lock in relationships across model cycles. Risks are real—EV indigestion, tariff noise, a softer global build—but design-win visibility and a cleaner asset model should help the company compound through the bumps, with upside optionality in ADAS and efficient power electronics.

Basler — Vision at the edge of automation

Basler sells machine-vision cameras, software and modules that let robots, logistics systems and inspection lines “see” and act—precisely the grunt work AI needs to escape the data center. The first half of 2025 showed a turn: sales rose 20% to €111.7 million, EBT margin swung positive to 7%, free cash flow flipped to plus, and management raised full-year guidance to €202–215 million in revenue with a 2–6% pre-tax margin. Under the hood, orders grew 22%, Europe stayed late-cycle, and big projects in China and the U.S. did the lifting. Currency and U.S. tariff noise are drags, but execution is improving and the product roadmap is widening—from cameras to full-range vision solutions and digital-twin workflows built on NVIDIA’s Omniverse to speed customer design. In a market that fragments across niches, Basler’s channel reach and developer tooling are moats as real as any patent portfolio.

The thread that ties them together

None of these companies will ever be household names. But they share the hard moats that define Germany’s best Mittelstand franchises: process IP that compounds, certification walls that deter fast followers, service networks that turn hardware into relationships, and balance sheets conservative enough to bridge capex lulls. The near-term macro is fidgety—tariffs, fitful auto builds, choppy semi cycles—but the direction of travel is clear: more optics, more packaging, more sensing, more vision. For investors willing to live with quarterly noise, that’s often where the durable returns hide.