Rubicon Technology, Inc. (NASDAQ:RBCN), a leading provider of sapphire substrates and products to the LED, RFIC, semiconductor, and optical industries, today reported financial results for its fourth quarter ended December 31, 2012.
The Company reported fourth quarter revenue of $20.0 million as compared with $19.9 million in the prior quarter. Revenue from six-inch wafer sales showed another sequential increase to $17.5 million from $16.4 million in the prior quarter, a 7 percent increase. Due to low industry pricing for two through four inch core products, the Company decided to sell a limited quantity of those products in the quarter. Raja Parvez, President and CEO of Rubicon Technology, commented, “We saw strong demand for our six-inch polished wafers in the quarter, particularly from the LED market. We continue to be the largest provider of six-inch polished wafers in the market due to our strength in both large diameter crystal growth and large diameter polishing, evidenced by the fact that we have now shipped over 400,000 polished six-inch wafers to date into the LED and SoS markets.”
While the pricing environment has not improved for two through four inch core products, the Company has started taking orders for those products for delivery in the first and second quarters in order to begin reducing inventory levels and maintain customer relationships. With Rubicon’s resumption of sales into this market, pricing has decreased further. William Weissman, CFO of Rubicon Technology, said, “Current pricing of two through four inch core products is now below our carrying cost in finished goods and WIP inventory for those products. As a result, we recorded a $1.6 million adjustment in the period to reflect the value of those products in inventory at the current market price. We believe that our competitors are now selling smaller diameter cores at cash cost in order to reduce inventory or to keep utilization rates high. However, excess capacity in the market is gradually being absorbed and we believe the pricing environment should eventually improve. Exactly when and how quickly pricing will improve is difficult to predict.”