10 February 2010


Rubicon recovering as LED backlighting drives sapphire price up 7% in Q4

Rubicon Technology Inc of Franklin Park, IL, USA, which makes monocrystalline sapphire substrates and products for the LED, RFIC, semiconductor and optical industries, has reported full-year 2009 revenue of $19.8m, almost halving from 2008's $37.8m. However, fourth-quarter 2009 revenue was $8.5m, up 49% on Q3/2009's $5.7m and more than double the $4m a year ago, driven by strong demand from the LED market as Rubicon continues to recover from its low of $2.3m in Q1/2009.

“Demand from the LED market continues to strengthen, particularly the demand for LED backlighting,” says president & CEO Raja Parvez. “With LED backlighting becoming more cost competitive and with the enhanced performance, thin profile and energy efficiency they provide, we expect LED backlighting to continue to rapidly gain market share over traditional backlighting solutions,” he adds.

“With the increasing demand from the LED market, the pricing environment is rapidly improving,” comments chief financial officer William Weissman. Pricing rose about 7% sequentially in the fourth quarter, and Rubicon expects a rise of at least 15% in first-quarter 2010. “While pricing is not yet back to pre-recession levels, we are seeing considerable improvement.”

Revenue also rose for large-diameter substrates. “Certain LED chip manufacturers have been adding significant capacity using 4-inch wafers,” continues Parvez. “In addition, orders for 6-inch wafers from major LED chip manufacturers for use in R&D have nearly doubled in the quarter,” he adds.

Due to improved factory utilization, increased pricing and a shift in product mix, gross margin rose to 12% in Q4/2009. Compared with full-year 2008’s net profit of $4.4m, full-year 2009 yielded a net loss of $9.6m. However, quarterly loss has been cut from $1.79m a year ago and $2.1m last quarter to $755,000 in Q4/2009. Also, although cash and cash equivalents have fallen from $7.6m at the end of 2008 to $3.9m at the end of 2009, there was no further decline during Q4/2009.

For first-quarter 2010, Rubicon expects revenue of $10.5m (up 24% sequentially), as well as gross margin in the mid-20s and a return to profitability.

See related items:

Sapphire substrate maker Rubicon aims to double capacity

Rubicon banks on LED displays boom to push larger wafers

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