7 May 2012

Rubicon’s revenue halves to $10m in Q1, but rebound expected in Q2

In preliminary results for first-quarter 2012, 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 about $10m. This is within its guidance of $8-12m but only just over half of the $19.4m last quarter and quarter of the $38m a year ago.

During the quarter, Rubicon recorded an expense of $1.8m associated with scrap and re-work of wafers. In February, the firm signed a new contract (worth $20m) with its major 6-inch wafer customer [which accounts for 60% of total revenue], and this expense is associated with bringing wafers produced prior to the signing of the new contract to the revised specifications defined in the new agreement.

Other factors included a product mix reflecting a greater-than-expected proportion of lower-margin 2-4 inch cores and an additional tax benefit.

Compared with net income of just $861,000 ($0.04 per diluted share) last quarter, Rubicon had in February given guidance of a loss of $0.10-0.14 per share. However, it now expects a loss of $0.15 per share.

“We anticipated that we would need to rework some of the wafers already produced to meet the new specifications. During the re-work process, some wafers became dimensionally non-compliant and needed to be scrapped,” says president & CEO Raja M. Parvez. “The scrap charge is related only to wafers produced prior to the signing of the new agreement. This is not a problem with new production as these new specifications are well within our standard process capabilities,” he adds.

“We are seeing the market begin to rebound in the second quarter, with an increase in orders for 2- through 4-inch sapphire cores and an increase in 6-inch wafer sales for both the LED and SoS [silicon-on-sapphire] markets,” says Parvez. “However, pricing remains low.”

For second-quarter 2012, Rubicon expects revenue to rebound to $15-18m and loss per share to improve slightly to $0.10-0.14.

See related items:

Rubicon’s revenue falls 42% in Q4 after LED makers delay 6” transition

Rubicon’s revenue falls less-than-expected 22% in Q3

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

Tags: Rubicon Sapphire substrates

Visit: www.rubicon-es2.com