4 November 2010


Sapphire maker Rubicon's revenue grows more-than-expected 30% in Q3

For third-quarter 2010, Rubicon Technology Inc of Bensenville, IL, USA, which makes monocrystalline sapphire substrates and products for the LED, RFIC, semiconductor and optical industries, has reported record revenue of $20.5m, up 30% on Q2’s $15.8m and up 260% on $5.7m a year ago (and above the expected $19.5m). Growth was due largely to increased pricing for sapphire substrates, driven by strong demand from the LED market.

“Overall demand from the LED market remained strong in the quarter as our customers continued to add capacity in response to the projected rapid growth in the LED industry,” says president & CEO Raja Parvez. Strong interest in polished 6-inch wafers also continued. “With the increased polishing capacity we are bringing on-line, we expect the 6-inch polished wafer product to become an increasingly large percentage of our total revenues,” says Parvez.

Gross margin has risen from 46% in Q2 to 54%. Operating margin reached 40%. Compared to a net loss of $2m a year ago, net income more than doubled from Q2’s $3.8m to $8.3m. Diluted earnings per share nearly doubled from Q2’s record of $0.18 to $0.35 (exceeding the expected $0.28).

After generating $4.4m in cash flow from operating activities, d uring the quarter cash and cash equivalents fell from $21m to $12m, due to spending $15.2m on property and equipment.

“While we have seen some softening in demand in certain geographies associated with higher TV panel inventories, overall demand remains strong and we expect prices for our sapphire products to increase in the fourth quarter by at least 15% on average sequentially,” says chief financial officer William Weissman. “We also anticipate beginning to add capacity in both crystal growth and polishing in the quarter.”

Rubicon recently opened both its new crystal growth facility in Batavia, IL and its new polishing facility in Penang, Malaysia. The new crystal growth facility will produce larger crystals, allowing the firm more flexibility in addressing the growing demand for larger-diameter sapphire substrates. The new polishing facility will be responsible for the more labor-intensive crystal fabrication processes and will also allow the firm to significantly expand its capacity for large-diameter wafer polishing.

“These two new facilities give us a significant advantage in the marketplace,” believes Parvez. “This combination of high-volume, high-quality, large-diameter crystal growth and polishing capability makes us unique in the marketplace today, and positions us very well to maintain our leadership position for years to come.”

For Q4/2010, Rubicon hence expects revenue to grow 27% sequentially to $25–27m. Gross margin should rise to the high 50% range, and operating margin to the mid 40% range. Diluted earnings per share should increase further to $0.47–0.49.

See related items:

Rubicon’s sales grow 37% in Q2 to record $15.8m

Search: Rubicon Sapphire substrates


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