According to micro-network news, on August 2, MOCVD equipment manufacturer Veeco disclosed its second-quarter results in 2018. 2Q18 achieved revenue of $157.8 million (equivalent to RMB 1.079 billion), a slight decrease from the previous quarter's $158.6 million. However, it increased by 40.6% from US$112.2 million in the same period last year.
Geographically, US revenues rose from 15% to 21%, EMEA (Europe, Middle East and Africa) rose from 10% to 16%, while China fell from 47% to 45%. Blu-ray LED MOCVD sales fell from 39% to 31%, while in other regions it fell from 28% to 18%.
In terms of revenue structure, in the company's total revenue, lighting, display and composite semiconductor division revenue fell slightly from 90 million US dollars to 88 million US dollars, the department's business accounted for 57 to 55% of its total revenue, It includes the Blu-ray MOCVD system sold in China.
Advanced packaging and MEMS & RF filter divisions, including lithography and precision surface treatment (PSP) revenues fell slightly from $27 million to $25 million, accounting for a 16% drop in revenue
Scientific and industrial sectors (including shipments of data storage and optical coding applications) revenues fell from $32 million to $27 million, and revenues fell from 20% to 17%.
Front-end semiconductor division (in May 2017, the company acquired US lithography, laser processing and inspection system manufacturer Ultratech, part of the science and industry sector) revenue doubled from $9 million to $18 million, revenue share from 6% jumped to 12%, including the ion beam etching system for the STT-MRAM process and the revenue from the Laser Peak Annealing (LSA) system.
The Ultratech product line's revenue is lower than the acquisition forecast, because some customers' smartphone shipments are lower than expected, these smartphones use fan-out WLP, while other electronics manufacturers The adoption of the packaging technology was postponed. In addition, the construction progress of China's 28nm fabs was postponed, which also led them to purchase the LSA system later than expected. 'We are growing this business in the front-end semiconductor and advanced packaging markets in the future. Full of confidence. ' Chief Financial Officer Sam Maheshwari said.
Although the gross profit margin has dropped from 39.1% a year ago to 36.5% in the previous quarter and then to 35.8% in the current quarter, this figure still exceeds the better cost structure due to better product mix and warranty and manufacturing. Prior to the 33~35% forecast, the overall gross profit margin of the first half of the year was also higher than expected.
Operating expenses were slightly revised down from $46.5 million in the previous quarter to $45.7 million, better than the expected $46-48 million.
Veeco Chairman and CEO John R. Peeler commented: 'Veeco's second quarter performance was solid, non-GAAP gross margin, operating income, net income and earnings per share were in line with company expectations. We continue to achieve synergies through the integration of Ultratech Progress has been made and production capacity has been rationalized by closing one of Singapore's production sites. We expect to complete the program by the end of the first quarter of 2019 and expect to save approximately $2 million annually.'
In addition, Veeco is preparing to launch new products in the second half of 2018, and its inventory has increased from US$131 million to US$146 million (from 61 days to 76 days). Finally, due to the decrease in orders from Chinese MOCVD customers, customer deposits have declined.
Orders for the second quarter were $132 million, a decrease of 14.8% from the previous quarter of $155 million. This was mainly due to LED manufacturers delaying orders in absorbing recent increases in capacity, leading to LED lighting, display and composite semiconductors. The weakness of the sector. Specifically, orders for blue LED MOCVD from general lighting and backlight applications in China have declined. 'From 2017 to the first half of 2018, hundreds of MOCVD systems for blue LEDs were sold to the market, we expect There will be a period of absorption,' Peeler pointed out. In contrast, in the scientific and industrial markets, Veeco saw a sharp increase in orders for data storage customers, especially ion beam deposition tools.
Backlogs in the second quarter fell from $331 million to $305 million, two-thirds of which are scheduled to ship in 2018, and the remaining orders include longer-haul ion beam systems, scheduled for shipment in the first half of 2019.
Peeler said that there are two trends that can be seen in the market. First, the competition in China's MOCVD market has intensified, the general lighting and backlight market has gradually become commercialized, and prices are also falling. We noticed this trend at the end of 2017, and the gross profit margin of orders also It has become very low. Second, new applications have emerged, such as optical devices for 3D sensing, GaN power devices for electronic systems and electric vehicles, and GaN RF devices and micro LED displays for 5G RF. It is pointed out that Veeco's strategy in this market has been to focus on providing value through differentiated technologies. R&D has been with this strategy for a while, resulting in a broad MOCVD portfolio to meet the needs of these emerging applications. He said the company is in optoelectronics. The field has achieved exciting growth, and growth in markets such as displays, memory and electronic power packaging has also highlighted customer success.
In the field of 3D sensing, Peeler said that he is pleased to see other mobile phone manufacturers adopt VCSEL-based facial recognition technology in their devices. He pointed out that Veeco has cooperated with several VCSEL manufacturers to carry out the epi process and is ready to invest. Mass production. 'We have also recently used wet etching and cleaning products for the metal stripping and photoresist stripping process of VCSELs. It is believed that 3D induction growth has just begun. 'He said, 'In the GaN RF and GaN power supply market We are working with several of our large IDM customers on the single-wafer propulsion platform Propel, our Propel installation base is being expanded, and we are ready to capitalize on mass production. ' He added that the company recently A number of wet etching and cleaning products have been shipped to Taiwanese foundries for the production of RF amplifiers and other compound semiconductor applications. It is hoped that optical and RF devices will continue to contribute to the company's growth.
He explained that although the orders in the science and industrial sectors are very strong, the booking distribution across the market is more balanced. Advanced packaging, MEMS and RF filters account for 19% of total bookings, lighting, display and composite semiconductors are 14%, front end Semiconductors are 21%, and scientific and industrial orders are 46%. In the third and fourth quarters, diversification should be more pronounced.
Looking forward to the third quarter of this year, Veeco expects to achieve revenues of 130 million to 140 million US dollars. According to GAAP, 2Q18 expects a net loss of 7-12 million US dollars, and the gross profit margin will remain at 35-37%. According to Non-GAAP, 2Q18 net Revenue is expected to reach $1 million to $6 million, and gross margin will remain at 36-38%.
Fourth-quarter revenue is expected to be flat with the third quarter, but gross margin has increased. Although Veeco expects revenue growth in all four segments in 2018, sales of low-margin blue LED MOCVD in China are expected to be Peeler stressed that the company will focus on raising the gross profit margin in the second half of the year to boost its gross margin to 40% this year. As for 2019, Peeler expects that due to sustainable, better product mix and cost reduction measures, Mao will be The interest rate has increased to over 40%.