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1 May 2007


Veeco’s boom in MOCVD orders driven by LED market

Veeco Instruments Inc of Woodbury, NY, USA has reported first-quarter 2007 revenue of $99.2m (59% process equipment; 41% metrology). This is up 6% on a year ago but down 19% sequentially. However, shipments were $110m, reflecting increased activity for new MOCVD products (with revenue recognition expected in subsequent quarters).

Of the total revenue: 36% were for data storage, 10% for semiconductors, 21% for high-brightness LEDs/wireless [MOCVD and MBE epitaxial deposition equipment], and 33% for scientific research.

Although down 16% on a year ago, bookings were $105.9m (with processing equipment rising to 65% and metrology falling to 35%). Of the total orders, 28% were for data storage (down 58% year-on-year), 11% for semiconductors (up 16%), 37% for high-brightness LEDs/wireless (up 60%), and 24% for scientific research (up 18%).

Comparing the orders to revenues reflects “significant growth in the HB-LED/wireless sector,” says chairman and CEO Edward H. Braun, as it overtakes data storage as Veeco’s biggest market sector. Veeco's HB-LED/wireless revenues were up 39% and orders were up 60% year-on-year (and up 37% sequentially).

“We continue to experience positive customer acceptance for our new K-Series MOCVD systems,” adds Braun. In Q1/2007, multi-system orders were received from six LED customers. LED market expansion for outdoor signage and lighting, small LCD panel backlighting and automotive applications have led to a positive bookings trend over the last nine quarters, with the large-area LCD market still to come (6-12 months away). New solar cell applications are also adding to MOCVD growth.

Also, Veeco’s total Q1/2007 gross margin was 44%, higher than forecast due to improved margins in MOCVD systems. On a generally accepted accounting principles (GAAP) basis, operating income has risen slightly from $1.6m a year ago to $1.7m and net income from $0.2m to $0.3m.

For second-quarter 2007, Veeco expects revenues to grow to $100-105m and bookings to grow to $110m +/ -5%. For full-year 2007, it expects total revenues to grow 5% to $450-465m, dominated by HB-LED/wireless sales growth of 30% to $115m (followed by growth of 30% again in 2008 to $150m, then 15% in 2009 to $175m).

* Veeco has also reduced long-term debt by $56m and exchanged a substantial portion of its convertible notes (worth $118.7m), “significantly improving the firm’s capital structure,” says Braun.

See related item:

Veeco’s HB-LED/wireless related revenues grew 42% in 2006

See Veeco Company Profile