8 August 2011

Rubicon’s Q2 revenue driven by 62% growth for 6" sapphire

For its second-quarter 2011, Rubicon Technology Inc of Bensenville, IL, USA, which makes monocrystalline sapphire substrates and products for the LED, RFIC, semiconductor and optical industries, has reported revenue of $43m, up 13% on Q1’s $38m and 173% on just $15.8m a year ago. In particular, sales of 6-inch wafers were $13.9m, up 62% sequentially and 216% year-on-year.

“We delivered strong financial and operational results driven by increased demand for our 6-inch polished wafer product,” says president & CEO Raja Parvez. “Our capacity expansion and increased efficiencies at our new factories helped meet the strong customer demand and drove growth in revenue and operating income,” he adds.

“We remain uniquely positioned to take advantage of the growth in the large-diameter sapphire wafer market, as we made solid progress in adding large-diameter polishing capacity and increased our output of large-diameter crystal from our new crystal growth facility,” says Parvez. "These actions, coupled with on-going efficiency improvements, have led to further wafer and core cost savings.”

Gross margin was 63%, level with last quarter and up from 46% a year ago. After more than doubling from 25% a year ago to 53% last quarter, operating margin has grown further to 54%. However, although up from $3.9m a year ago, net income has fallen from $19.1m last quarter to $9.9m.

“As larger-diameter substrates offer chip manufacturers the potential to realize significant savings through both the increased usable area of the wafer and the efficiencies gained in the manufacturing processes, we are forecasting continued strong demand for our 6-inch polished wafers in the third quarter as our customers continue to ramp their 6-inch production capacity,” says Parvez.

“Prolonged weakness in the LED backlighting market is now having an impact on demand for 2- through 4-inch diameter cores,” Parvez continues. “We have limited visibility at the moment for new core sales and, given our polishing customers have ample core inventory at the moment, current pricing for 2- through 4-inch diameter cores is down as much as 60% sequentially,” he adds. “While we believe this situation will improve by the end of the quarter, it will have an impact on our third quarter results.”

For third-quarter 2011, Rubicon expects revenue to fall to $28–34m. Nevertheless, despite the decline in 2–4”-diameter core pricing, due to a favorable product mix and low cost structure the firm expects gross margin of 40–45%. 

* Rubicon also says that its board of directors has recently authorized a stock repurchase program to purchase up to $25m of common stock over a period of two years. The program authorizes the firm to repurchase shares of its common stock in the open market at times and prices considered appropriate by the firm, depending on prevailing market conditions and other corporate considerations. Rubicon currently has 23,039,548 common shares outstanding. “The stock repurchase program is a reflection of the company’s strong financial position and ongoing commitment to increasing shareholder value,” states Parvez.  

See related items:

Rubicon forecasts Q2/2011 revenue at high end of $40–43m guidance

Rubicon’s Malaysian polishing plant starts volume production of large-diameter sapphire

Tags: Rubicon Sapphire substrates

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