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GaAs epiwafer foundry Kopin is investing an additional $6.3m in its Asian foundry venture, Kopin Taiwan Corporation (KTC).
The move, which increases the US company's equity stake in the foundry to 87%, came on the back of rapidly improving financial results for its III-V business.
In the second quarter of the year, Kopin posted III-V revenues of $10.4m – up 51% on its first-quarter performance as demand for its transistor epiwafers rebounded strongly.
Overall, the Taunton, Massachusetts, firm recorded sales of $28.2m and a net income of $3.7m, as sales of its display products remained robust amid the global recession.
Kopin CEO John Fan declared himself “very pleased” with the performance of the III-V business. “We expect that demand will continue to improve in the second half of this year,” he added, as well as suggesting that the turnaround “perhaps” indicated that the recession was beginning to ease.
Fan estimates that Kopin's transistor epiwafers ultimately show up inside power amplifier (PA) components in approximately one-third of all mobile phones currently.
And with sales of smartphones growing quickly, along with the migration to 3G connectivity around the world, more and more of those amplifiers are going to be required.
Fan also said that Kopin was growing its customer base in the wireless communications market, although its largest customer remains the PA giant Skyworks Solutions. Skyworks was recently identified by market research company Strategy Analytics as the largest supplier of cellular PA devices by market share.
With the anticipated need for more GaAs-based amplifiers, Kopin has sensed an opportunity to capitalize on demand for what it described as “Taiwan's fast-growing foundry services”.
In two transactions, Kopin has purchased 19.7m additional shares in KTC, and says that the investment will aid a transition from 4-inch to 6-inch GaAs epiwafer production.
In his outlook for the remainder of 2009, Fan predicted that Kopin would post full-year sales somewhere between $90m and $110m, depending on the pace of any economic recovery.
“We continue to believe that the most challenging portion of 2009 is behind us,” noted the CEO. “The cellphone market is strengthening, as many of our III-V customers have reported over the past couple of weeks, which should result in continued growth of our III-V revenue in the second half of 2009.”
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The author Michael Hatcher is a freelance journalist based in Bristol, UK.