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2 August 2007


Aixtron’s Q2 order growth driven by demand for LED production equipment

For first-half 2007, deposition equipment maker Aixtron AG of Aachen, Germany has reported revenues of €109.0m (up 61% year-on-year). Quarterly revenue dropped from Q1’s record €63.8m to €45.2m in Q2, reflecting lower order intake in previous quarters and customer delivery requirements.

In H1/2007, revenue for Compound Semiconductor equipment rose 131% to €71.8m (66% of total revenues) from just €31.1m (46% of total revenues) in H1/2006, driven mainly by high LED production equipment demand from Asia. Of total revenues, 86% came from Asia, 4% from Europe and 10% from the USA (compared to 83%, 8% and 9%, respectively, in H1/2006).

Specifically, production qualification of next-generation LED devices (e.g. for automotive applications, LED backlighting etc) is continuing, with some early end-products appearing on the market. In first-half 2007, over 30% of revenues and nearly 70% of orders for compound systems were for Aixtron’s high-capacity/common-platform systems, launched in December 2005, for the production of gallium nitride LEDs, which have by now been qualified by many key customers (as evidenced by the receipt of repeat and multiple orders).

Also, in first-half 2007 there was additional demand from Asia for systems for the production of blue and red lasers, as well as small-scale demand for systems for telecom/datacom applications.

The continuation of customer qualification and repeat orders for high capacity/platform systems, as well as the favorable product mix, have boosted gross margin from 37% a year ago to 39%, despite negative currency exchange effects. Net profit was €11.5m in first-half 2007 (compared to a loss of €4.3m a year ago), although this included a drop from €7.6m in Q1 to €3.8m in Q2. Cash and cash equivalents rose to €53.9m at the end of June (up from €37.7m a year ago and €43.7m at the end of Q1).

Equipment order intake in H1/2007 was €90.8m (up 12% on €81.2m a year ago). More specifically, after two consecutive quarters of decline, in Q2 order intake was €50.3m, up 24% from Q1’s €40.5m (driving backlog up 15% from €70.0m to €80.3m).

According to CEO Paul Hyland, this pick-up in orders was fuelled by ‘healthy’ ongoing demand of compound semiconductor equipment (rising to 75% of total orders in H1/2007) for the production of LEDs, as well as ‘relatively stable’ demand for silicon semiconductor systems for the
production of memory products.

Compared to first-half 2007, Aixtron expects second-half 2007 to be weaker. However, “The current positive market development gives us the confidence to confirm the upper end of our prior guidance [for full-year 2007]; namely
€200m revenues and €16m EBIT [earnings before interest and taxes],” adds Hyland. “Equally encouraging is that the healthy demand for our products, and most especially our latest compound systems, is beginning to give us a solid foundation for 2008.”

*The NASDAQ Stock Market has approved the start of trading of Aixtron’s ADSs (American Depositary Shares) from 1 August on the NASDAQ Global Market. Aixtron’s shares previously traded on the Capital Market tier of the NASDAQ
Stock Market.

See related items:

Asian LED makers drive doubling of Aixtron revenues, but slowing orders flag weak second-half 2007

Aixtron quashes takeover bid speculation

Aixtron’s 23% revenue growth in 2006 drives return to profitability