News

4 November 2009

 

Kopin’s III-V revenues rise 37%, driven by smartphones/3G

For third-quarter 2009, GaAs epiwafer foundry Kopin Corp of Taunton, MA, USA, which makes III-V heterojunction bipolar transistor (HBT) epiwafers and CyberDisplay LCDs, has reported record revenue of $32m, up 4% on $30.7m a year ago and 13% on $28.2m last quarter.

In contrast to CyberDisplay revenue of $17.7m (down 4% on $18.9m a year ago and roughly flat on last quarter), III-Vs revenue of $14.3m was up 21% on $11.8m a year ago and 37% on last quarter’s $10.4m.

“Smartphones and other 3G devices fueled robust demand for our III-V products,” says president & CEO Dr John C.C. Fan. “Many of these new products require complex circuitry and triple the number of power amplifiers as a standard wireless handset, a technology evolution that only strengthens our position as the world’s leading III-V merchant supplier,” he claims. “We have invested strategically to increase our 6-inch wafer capacity and capability, and we expect to further build our 6-inch infrastructure in the coming year.”

While still down on 33.8% a year ago, gross margin has recovered from to low of 26% last quarter to 32.6%, reflecting variations in sales mix between CyberDisplay and III-V products (for which fab utilization was high).

Net income has risen from $1.5m a year ago and $3.7m last quarter to $8.5m. “Despite this challenging economic period, we are delighted that we reported our fifth consecutive profitable quarter,” says Fan.

As of 26 September, Kopin had cash and marketable securities of $107.5m, up from $105.8m at the end of June and $100m at the end of 2008. Year-to-date capital expenditure was just $2.2m.

However, during the quarter, Kopin invested a further $6.3m in its Asian foundry subsidiary Kopin Taiwan Corp (KTC), raising its stake from 34% to 87%. The firm is hence now consolidating KTC (which contributed $500,000 of Kopin’s Q3/2009 revenue). The additional investment is designed to provide capacity to capitalize on the demand for Taiwan’s fast-growing foundry services, fueled by the expanding telecoms and wireless markets. Specifically, it enables KTC to meet customers’ demands as they transition from using 4-inch to using 6-inch GaAs wafers.

“While the fourth quarter historically has been our seasonally weak quarter, based on discussions with our customers and the expected continued strong momentum of our military display program and III-V products we expect to achieve the top end of the full-year 2009 revenue guidance of $90-110m that we issued in April [nearer to 2008's revenue of $114.8m],” says Fan.

“With our good financial and operational results through the first nine months of the year, we are poised to complete a strong 2009 performance despite the challenges created by the economic recession,” Fan continues. “Although visibility into 2010 is still somewhat limited by the economic climate, we plan to continue to aggressively leverage our Wafer Engineering and AMLCD technologies to develop transformative applications for high-growth markets,” he adds. “Kopin is anchored by a strong balance sheet, which has enabled us to invest strategically in advanced research and production equipment and processes in the past few years [CapEx is expected to increase to $6-10m for the next 12 months]. Exciting new products and technology platforms are coming on line, and we are continuing our active patent filing of new technologies and products.”

See related items:

Kopin invests in Taiwan foundry as GaAs demand returns

Kopin’s III-V revenues fall 37%, but margin boosted by military displays

Kopin grows profit in Q4 despite 8% drop in III-Vs revenues

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