News: Suppliers
12 August 2026
Veeco’s Q2 results exceed guidance
For second-quarter 2026, epitaxial deposition and process equipment maker Veeco Instruments Inc of Plainview, NY, USA has reported revenue of $193.5m, up 22% on $158.3m last quarter and 16.5% on $166.1m a year ago, and exceeding the $170–190m guidance.
- The Semiconductor segment (Front-End and Back-End, as well as EUV Mask Blank systems and Advanced Packaging) grew by 20% from $109m last quarter to $131m (68% of revenue), exceeding the $124m a year ago. This was driven largely by laser annealing systems for leading-edge foundry logic and memory customers, and wet processing systems for advanced packaging.
- The Compound Semiconductor segment (Power Electronics, RF Filter & Device applications, and Photonics including specialty, mini- and micro-LEDs, VCSELs, laser diodes) has grown further, by 50% from $14m a year ago and by 9% from $19m last quarter to $21m (11% of revenue).
- The Data Storage segment (equipment for thin-film magnetic head manufacturing) more than doubled, from $10m last quarter to $22m (11% of revenue), up on $12m a year ago.
- The Scientific & Other segment (research institutions and other applications) was level with last quarter at $20m (10% of revenue), up 25% on $16m a year ago.
By region, the USA has grown further, from $22m (13% of revenue) a year ago and $32m (20% of revenue) last quarter to $59m (31% of revenue), due primarily to advanced semiconductor customers. China has rebounded by more than doubling from just $20m last quarter to $48m (25% of revenue), up on $27m a year ago. In contrast, The Asia-Pacific region (excluding China) has fallen further, from $98m (59% of revenue) a year ago and $90m (57% of revenue) last quarter to $70m (just 36% of revenue). Europe, Middle-East & Africa (EMEA) & the Rest of the World was $16m (10% of revenue), level with last quarter, after falling from $18m a year ago.
On a non-GAAP basis, gross margin was 39.5%, down on 42.6% a year ago but rebounding from 36.2% last quarter, and towards the top end of the 38–40% guidance range.
Operating expenses have risen further, from $47.6m a year ago and $48.8m last quarter to $53.3m.
Despite that, operating income was $23.1m, recovering from $8.6m last quarter and back level with a year ago, and exceeding the $13–22m guidance.
Net income was $21.8m ($0.33 per diluted share), recovering from $8.9m ($0.14 per diluted share) last quarter and up on $21.5m ($0.36 per diluted share) a year ago, and beating the guidance of $12–21m ($0.20–0.32 per diluted share).
Cash flow from operations was $51m (up from just $8m last quarter). Capital expenditure was $4m. During the quarter, cash and short-term investments hence rose by $46m, from $383m to $429m. Long-term debt remains about $227m.
“Veeco delivered strong quarterly results, exceeding market expectations while continuing to build momentum across our business,” says CEO Bill Miller Ph.D. “The rapid expansion of AI is driving increased demand across our broad portfolio of advanced technologies, resulting in robust order activity and deeper customer engagement throughout our markets,” he adds.
Full-year 2026 guidance raised
For third-quarter 2026, Veeco expects revenue to grow to $200–220m. Gross margin should rise to 41–42%. Despite operating expenses rising to $57–58m, the firm expects increases in operating income to $25–35m and net income to $23–33m ($0.35–0.49 per diluted share).
“Given the strength of our order momentum, improved customer visibility, and actions we are taking to support future growth, we are updating our full year 2026 non-GAAP outlook,” says Miller.
For full-year 2026, Veeco has now raised its revenue guidance by $25m at the mid-point, from $740–800m to $780–810m.
In particular, Semiconductor revenue is expected to grow by more than 10% year-on-year, driven primarily by additional sales to leading memory, foundry logic, and EUV customers serving AI and high-performance computing applications.
Compound semiconductor revenue is expected to approximately double on full-year 2025, driven primarily by Lumina MOCVD and Spector IBD systems for silicon photonics. “Looking ahead in 2027, we expect revenue growth to accelerate, driven by backlog for these tools,” says chief financial officer John Kiernan.
Data storage revenue is expected to double year-on-year in 2026.
“Demand across our key markets remains exceptionally strong, with many customers providing forecasts that extend well into the future,” says chief financial officer John Kiernan. “This increasing visibility is translating into robust order momentum, and today a significant portion of our anticipated 2027 revenue is already represented in backlog,” he adds. For example, in Q2/2026 Veeco secured $200m in advanced packaging orders for wet processing and lithography systems, principally for delivery in 2027.
“To capitalize on these opportunities, we remain intensely focused on executing our manufacturing ramp and investing ahead of expected revenue. During 2027, we plan to more than double capacity in advanced packaging and silicon photonics. These investments include expanding manufacturing capacity through a combination of internal production and strategic outsourcing partnerships [with contract manufacturers in Southeast Asia], adding and training personnel, and expanding our supply chain to support customer demand,” says Kiernan.
“While we view these investments as critical to capturing significant long-term growth opportunity, they will have a near-term impact. On a full-year 2026 basis, we expect approximately $10m of incremental operating expenses [in second-half 2026] and a gross margin impact of roughly 75 basis points associated with these growth initiatives.”
The expectation for gross margin has therefore been cut from 41–43% to 40–42%. With the forecast for operating expenses being increased from $205–220m to $215–225m, guidance has now been reduced for operating income from $101–126m to $97–115m, and for net income from $94–115m ($1.50–1.85 per diluted share) to $91–107m ($1.36–1.61 per diluted share).
“The combination of increasing customer visibility, strong order momentum, and expanding opportunities tied to AI infrastructure gives us confidence in our long-term outlook,” says Kiernan. “Veeco is uniquely positioned to capitalize on these opportunities, deliver sustainable, profitable growth, and create a substantial value for shareholders.”
Regarding the compound semiconductor market in particular and the projected served available market (SAM) opportunity through 2030: “Our outlook remains supported by the secular growth of AI infrastructure in silicon photonics, optical connectivity, and power efficiency. We believe these trends are driving a significant inflection in compound semiconductors, where adoption is accelerating across both optical networking and power applications, which continues to create an increasingly attractive opportunity for Veeco,” says Miller.
“In silicon photonics, we project a $700m SAM by 2030 for our role in the manufacturing of indium phosphide lasers. The rapidly evolving landscape of AI data centers is driving demand across our Spector IBD system, WaferStorm and WaferEtch for wet processing solutions, and Lumina MOCVD platform. We continue to see engagement with these customers as they move toward large-scale deployments.
“In the other photonics category, we project $550m in SAM by 2030. This includes opportunities for red micro-LEDs, low-Earth-orbit satellites, and AR/VR applications.
“In GaN power, we project $250m in SAM by 2030, supported by long-term trends tied to AI data-center power efficiency, electrification, and high-power-density applications. We remain encouraged by our progress with a leading power IDM customer, where our Propel 300 platform continues to advance towards production. Following the previously announced pilot-line order, we believe we are well positioned to participate in future capacity expansions. Veeco is also a critical member in the imec 300mm GaN power consortium program to advance power electronics manufacturing alongside other industry leaders.”
Veeco receives LUMINA+ MOCVD system order for manufacturing InP lasers
Veeco’s new LUMINA+ MOCVD system qualified by Ennostar
Veeco receives $250m+ in equipment orders for manufacturing InP lasers
Veeco’s revenue down 9.4% year-on-year for Q42025 and 7% for full-year
Veeco’s Q2 revenue, operating income and EPS exceed guidance, but constrained by tariffs
