News

27 July 2010

 

Veeco’s record Q2 driven by LED & Solar revenues growing 66% from Q1

For second-quarter 2010, epitaxial deposition, process, and metrology equipment maker Veeco Instruments Inc of Plainview, NY, USA has reported record revenue of $253m (up 55% on $163.2m last quarter and 250% on just $72m a year ago).

Of this, 73% came from LED & Solar revenues of $185.6m (up 66% on $111.5m last quarter and 482% on just $31.9m a year ago). About $175m was for MOCVD, after shipping 81 systems (exceeding the target of 75, and quadruple the shipments of Q3/2009).

Date Storage was 14% of total revenue ($35.7m, up 54% on $23.2m last quarter and 103% on $17.6m a year ago). Metrology revenue was 13% of total revenue ($31.7m, up 11% on $28.5m last quarter and 40% on $22.5m a year ago).

“All three of our businesses, LED & Solar, Data Storage and Metrology, continue to execute extremely well, with sequential improvements in revenue and EBITA [driven mainly by MOCVD],” comments CEO John R. Peeler.

Gross margin has risen from 33.9% a year ago and 43.1% last quarter to 45%. EBITA (earnings before interest, income taxes and amortization) was a record $68.4m (27% of sales) compared with $32.8m (less than half) last quarter and –$6.4m a year ago. Compared with a loss of $14.7m a year ago, net income has doubled from $26m last quarter to $52.4m.

During the quarter, Veeco generated about $67m in cash from operations (up from $42m last quarter). Capital expenditure was about $5m, mainly for R&D lab tools.

Bookings were a record $347m (up 30% on $267.8m last quarter and about 250% on just $98.7m a year ago). Of this, 75% came from record LED & Solar orders of $260.4m (up 23% on $211.7m last quarter and 362% on just $56.3m a year ago). Of this, MOCVD orders were a record $251m (from 17 customers), with wins in all regions, including the USA, Europe, Taiwan, Japan and Korea, as well as accelerating demand from LED firms expanding facilities in China. Veeco notes a continued customer focus on TV and PC backlighting, as well as general illumination.

At the end of the quarter, order backlog was a record $597m ($490m LED & Solar; $78m Data Storage; $29m Metrology).

“Business conditions in LED remain at a similar pace to what we have experienced the last several quarters, and we believe that Q3 will be another very strong bookings quarter for our MOCVD business,” Peeler comments. “In particular, China's initiative to subsidize the LED industry via seven national ‘industrial parks’ [in Jiangmen, Foshan, Changzhi, Wuhu, Yangzhou, Suzhou and Changzhou] is spurring strong order quoting patterns for Veeco, both from local companies as well as from Korean and Taiwanese customers that are partnering with Chinese entities,” he adds. With customers anticipating continued investment into 2012, Veeco estimates that there is the opportunity for several hundred MOCVD units and more than $500m in subsidies in 2010–2011. Veeco’s TurboDisc K465i MOCVD system (launched in January) is also enabling the firm to continue to win business. The firm reckons that it is capturing more than half of the market in China and Korea, and is gaining traction in Taiwan and Japan, as well as having a strong position in North America and Europe with lighting industry leaders. LED adoption for certain general lighting applications is happening now, driving MOCVD opportunity significantly larger than backlighting, says Veeco.

Veeco currently plans to increase shipments to about 100 MOCVD reactors in third-quarter 2010 and to reach a production capacity of 120 or more by the fourth quarter. “As a result of our variable-cost, outsourced manufacturing strategy, we have dramatically increased our production capacity, with the ability to flex our actual MOCVD shipments up or down each quarter depending upon specific customer demand and delivery requirements,” Peeler adds. In addition, next-generation product development in MOCVD is continuing on an accelerated timeline, he adds.

For third-quarter 2010, Veeco expects revenue to grow 15–25% to $290–315m and gross margin to rise to 46–47%.

“Based upon Veeco’s strong backlog and current order visibility, the company is currently forecasting that 2010 revenues will be over $1bn, with strong year-over-year growth from 2009 in revenue and profitability in all three business segments,” concludes Peeler.

See related items:

Veeco’s LED & Solar orders up seven-fold year-on-year as backlog reaches $0.5bn

Veeco’s MOCVD revenue more than doubles sequentially

LED backlighting drives Veeco’s return to profit

Veeco orders double on booming MOCVD system demand

See: Veeco Company Profile

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Visit: www.veeco.com