Flagging Veeco buoyed by strong LED demand
Continued strength in demand for MOCVD reactors helped Veeco Instruments to post revenue of $98.8 million in the quarter ended June 30, offsetting a weaker showing from the firm s other business segments.
The Woodbury, New York, equipment vendor s total sales dropped by 11 percent compared with the equivalent period last year, and culminated in a net loss of $2.6 million.
Revenue from sales of equipment for HB-LED and wireless chip manufacturing applications in the latest quarter totalled $25.7 million, up from $21 million in the previous three months.
And at $34.5 million, orders for RFIC and LED chip making equipment booked in the latest quarter were down 11 percent sequentially, mostly because of a drop-off in demand for MBE tools used in research.
Orders for MOCVD equipment, which makes up the vast majority of Veeco s HB-LED/wireless business sector, actually increased 9 percent on the previous quarter to $32 million, said out-going CEO Ed Braun, who is moving into the chairman role.
John Peeler has just stepped into Braun s shoes as Veeco s new CEO. Formerly in charge of JDSU s test and measurement business, Peeler says that his key challenge is to improve the company s profits.
"2007 has been a difficult year," he said. "My number-one goal is to get Veeco back on the right track."
Peeler will be buoyed by the strong demand for MOCVD equipment including the new K-Series of reactors. According to Braun, five customers in the HB-LED sector each placed orders for two MOCVD tools in the recent quarter.
With revenue from sales to LED chip makers growing at around 40 percent annually, this part of the Veeco portfolio is rapidly becoming the company's largest, even though key future applications such as large-scale display backlights and solid-state lighting are yet to have a major impact.
Braun reckons that orders for tools driven by demand large-scale LED backlights remain about one year away, and anticipates that solid-state lighting will grow in stages over the next 2-5 years. Moves by some Asian and European countries to ban or limit the use of mercury, which is used in both incandescent and fluorescent lamps, could also begin to have a positive effect over that time span.
Orders for Veeco s MOCVD tools used in III-V solar cell fabrication "“ included in the company's LED/wireless business unit - are also picking up strongly, with Emcore making a substantial investment in capacity.
