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Despite posting another quarterly net loss, equipment vendor Veeco Instruments has seen a dramatic recent surge in orders for its TurboDisc MOCVD systems.
Detailing the Plainview, New York, firm's latest financial results, CEO John Peeler said that booming demand for these tools from key LED manufacturers in Korea and Taiwan was the key reason behind a much healthier-looking order book at Veeco.
Orders for LED and solar applications, which includes MOCVD systems, doubled sequentially to $57m in the quarter that ended on June 30.
That order momentum has accelerated notably into July, too. During the investor call to discuss the latest results, Peeler said that Veeco had so far received more than $110m worth of orders for MOCVD kit in the month of July alone.
The order boom is a result of the increasing demand for LED backlights in notebook PCs and televisions, and an anticipated need to expand manufacturing capacity to support that ramp.
Peeler now estimates that during the current quarter, orders for LED and solar manufacturing equipment will reach somewhere between $125m and $175m. The majority of those orders are for K465 GaN systems, which may be configured in either 12x4-inch or 45x2-inch wafer fabrication formats.
And he expects that momentum to continue along with the increasing penetration of LED backlight technology. “Assuming that 40% of PC monitor and TV backlighting will be [based on] LEDs by 2012, we believe that the MOCVD tool market opportunity for this application alone could approach $1 billion over the next few years,” the CEO said.
Current demand is being driven by both vertically integrated makers of LED backlighting systems, and by merchant suppliers of LED wafers and chips, he added.
The demand surge also raises the question of whether Veeco is taking market share from its key competitor in the MOCVD equipment space – Germany-based Aixtron. The answer to that should become clearer when Aixtron reports its own financial results later this week.
The dramatic return to demand for MOCVD systems will now see Veeco hiring workers to support increased manufacturing. Company headcount is now expected to be in the region of 1100 by the end of 2009, rather than the figure of 1000 that had been previously indicated.
Overall, Veeco reported a net loss of $14.7m on total revenues of $72m for the second quarter of the year. Third-quarter revenues are expected to be in the region of $80m to $88m, and Veeco expects to break even on a non-GAAP basis.
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The author Michael Hatcher is a freelance journalist based in Bristol, UK.