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15 February 2008


Rubicon grows 58% and opens manufacturing facility

For fourth-quarter 2007, Rubicon Technology Inc of Franklin Park, IL, USA, a vertically integrated manufacturer of sapphire material, wafers, and components, has reported revenue of $9.5m. This is up 58% on $6m a year ago and up 5% sequentially - despite being capacity constrained – due to a shift in mix to larger-diameter products, i.e. 3-inch and 4-inch wafers for LED manufacturing and particularly 6-inch wafers for silicon-on-sapphire (SOS) RFIC applications. SOS sales rose 15% sequentially to 20% of total revenue (up from 18% in Q3). Revenues for LED applications grew 2% sequentially (going from 72% to 70% of total revenue).

Gross margin grew for the eighth consecutive quarter, from 18% to 39%, due to improved efficiencies, higher factory utilization and the continued shift in revenue to larger-diameter products (with 55% of substrate revenue coming from 3” or greater diameter products, compared to 47% in Q3 and just 23% a year ago). Net income on a non-GAAP basis was $1.8m, compared to a net loss of $200,000 a year ago. However, net loss (including non-recurring charges, mainly related to November’s initial public offering on Nasdaq) was $16.6m (albeit down on $21m a year ago).   

For full-year 2007, revenue was a record $34.1m, up 64% on 2006’s $20.8m. Gross margin rose from 9% to 35%. Gross margin has increased every quarter over the last two years through increased operating efficiencies. The non-GAAP net profit was $5m, compared to a net loss of $4.5m in 2006. GAAP net loss has been cut from $7.6m to $2.8m.

Rubicon has also announced the opening of its new crystal growth manufacturing facility three miles away in Bensenville, IL (after identifying its location only last July). Once it is completely built out, it will more than double the firm’s existing crystal growth capacity and has the infrastructure to handle the firm’s expansion plans at least through 2009. With the infrastructure in place, the installation of crystal growth equipment has now begun. The first set of furnaces has already started producing high-quality material, according to CEO Raja Parvez.

“Rubicon is ideally positioned in 2008 to meet customer demand in the dynamic and high-growth LED, semiconductor and optical markets we serve,” says Parvez. “Demand remains strong in both the LED and silicon-on-sapphire (SoS) markets,” he adds.

In Q4/2007, orders worth $13m for 2008 boosted the backlog to $45m. “Based on our projected production ramp for 2008, we are very close to being sold out for the year,” Parvez says, adding that the sales team has already begun focusing on sales for 2009 . “We anticipate revenue in the first quarter of 2008 of $10m.” The proportion of sales from 6” wafers should rise due to increased sales to the SOS market and sales for wafer carriers. Demand for 3” and 4” wafers is a bit weaker for Q1, but Rubicon expects to see stronger demand in second-half 2008.

For full-year 2008, Rubicon expects revenue of $46-49m. Gross margins should be lower by three to four percentage points due to the factory expansion and consequent lower utilization.

Also this year, Rubicon should begin production of 8-inch sapphire wafers for RF applications (for qualification by silicon-on-sapphire customers in 2009).

See related items:

Rubicon appoints business expert to board

Rubicon announces pricing of IPO to raise over $100m

Rubicon files for $100m IPO

LED market drives Rubicon to expand sapphire substrate capacity

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