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13 March 2008


Aixtron’s revenues grow 25% in 2007

For fourth-quarter 2007, deposition equipment maker Aixtron AG of Aachen, Germany has reported revenue of € 54.1m, up on Q3’s € 51.7m.

This took full-year 2007 revenue to € 214.8m, up 25% on 2006’s € 171.7m (and up 7.5% on initial guidance). This is also the first year above € 200m since 2001. The rise was due mainly to equipment revenue for compound semiconductor (including organics) rising 50% to € 145.2m (to 68% of total revenue, compared to just 56% in 2006). This was driven by demand for platform-based systems (with ‘Integrated Concept’ Crius and G4 systems accounting for 48% of sales, and 72% of orders) as well as LED applicationss (61% of total revenue), particularly for back-light units (BLUs) for LCD displays in laptops, monitors and TVs. Correspondingly, 81% of total revenue came from Asia (versus 10% from the USA and 9% from Europe). In contrast, silicon equipment revenue fell 9% to € 41.7m (19% of total revenue, down from 27% in 2006), due to volatility in the memory chip market.

Reflecting the increasing percentage of new common platform system revenues, paired with a favorable product mix, gross margin improved from 37% to 40%. “Despite the continuing weakness and volatility of the US dollar, we were able to hold the gross margin improvements made earlier in the year and finish the year with a gross margin performance close to our target of 40%,” says president & CEO Paul Hyland.

Net profit almost tripled from 2006’s € 5.9m to € 17.3m in 2007. Cash reserves rose 34% from € 53.7m at the end of Q3 to € 71.9m at the end of 2007.

In Q4/2007, equipment order intake rose again, by 24%, from Q3’s record of €70m to a new record of € 86.9m (almost double on a year ago). This boosted full-year 2007 order intake to € 247.7m (up 39% on 2006’s € 178m): with compounds up 52% to € 208.6m (84% of order intake, compared to 77% in 2006) and silicon down 5% to € 39.1m (just 16% of intake).

Consequently, order backlog is € 132m (up 55% from just € 85.1m at the end of 2006, and the highest level since 2002). Demand for deposition equipment for compounds is particularly strong: 96% of backlog versus just 4% for silicon (compared to 87%:13% in 2006).

However, Hyland cautions that quotation levels are dropping slightly, so the current high level of orders may slow within the next two quarters during a second phase of customers digesting recent purchases (following the last phase in 2006). However, Hyland does not doubt that there will be a further investment cycle, starting “some point between Q4/2008 to Q2/2009”.

“When considering our 2008 full-year guidance, we have taken into account the potential risks in the current economic environment,” says Hyland. “Despite these climatic considerations, I remain very confident that 2008 will be another year of growth.”

On this basis, for full-year 2008 Aixtron forecasts revenue of € 270-300m (up 26-40%). The target gross margin is 42% (continuing the figure achieved in Q4/2007).

“When viewed over the next five years, the outlook looks very positive for the market applications we serve and the technology we deliver with our equipment,” concludes Hyland.

*Aixtron lists short-term market opportunities as: LED backlighting for next-generation LCD screens; increased adoption of LEDs in automotive applications; and emerging LED-based external/street-lighting applications.

Mid-term opportunities include: emerging solid-state lighting device applications; silicon carbide (SiC) hybrid automotive and solar applications; III-V-based concentrator photovoltaic (CPV) solar cells; CVD/ALD for next-generation NAND/DRAM memory; and the development of plastic electronics/flexible TFT back-planes.

Long-term opportunities include: longer-term development of technologies for organic LEDs; the convergence of III-Vs and silicon materials; and the development of new applications using carbon nanotubes.

Correspondingly, although Aixtron’s total staffing has risen only 8% year-on-year (from 566 to 609), R&D staffing rose 15% (from 181 to 210), with R&D expenditure rising from €23.9m to €26.5m. In particular, despite the current downturn in silicon-related sales, Aixtron is continuing its investment not only in next-generation memory systems but also in its joint development programs for atomic layer deposition (ALD) and atomic vapor deposition (AVD) technologies. “We remain confident we will create additional revenue opportunities in 2009 and beyond,” Hyland asserts.

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Aixtron’s Q3 order intake rises 39% on Q2, raising full-year expectations

Search: Aixtron MOCVD ALD LEDs LED backlighting Automotive LEDs Solid-state lighting SiC Solar cells Carbon nanotubes

See: Aixtron Company Profile