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 second quarter ended June 30, 2013.
The Company reported second quarter revenue of $10.6 million as compared with $8.3 million in the prior quarter. Revenue was higher sequentially due to the stronger demand for two- and four-inch core products driven by the strengthening LED market. Raja Parvez, President and CEO of Rubicon Technology, commented, “We saw stronger demand for two- and four-inch core from the LED market in the second quarter. Orders were up significantly and pricing for these products increased by approximately 10 percent. This is the first time in two years that sapphire pricing has increased.” Changes in market pricing are usually reflected in the Company’s financial results in the following quarter due to the lead time on customer orders, therefore, changes in market pricing in the second quarter will be reflected in third quarter financial performance. The Company reported that demand for two- and four-inch core remains robust and that pricing has continued to rise in the third quarter.
Overall demand from the LED market has been improving, driven by increasing adoption of LEDs for general lighting applications. The Company expects LED demand to continue to strengthen given the momentum in the LED general lighting segment. Also, non-LED applications for mobile devices such as camera lens covers, portions of the face plate to allow for biometrics like fingerprint recognition and smart watches have the potential to add considerable demand for sapphire next year.
Much of the pressure on the Company’s earnings is coming from a lull in six-inch wafer orders and idle plant costs due to low utilization of the Company’s manufacturing facilities. Mr. Parvez commented, “We expect improvement in six-inch wafer orders later this year, and we are on schedule to begin offering four-inch and six-inch pattered sapphire substrates (“PSS”) by the end of the year. The PSS product will allow us to capture more revenue and margin on the same surface area of sapphire. It could also help facilitate six-inch adoption among chip manufacturers as there will be one less process to scale up before migrating to a larger platform.”