LED market predicted to grow above 20% pear year, says Rubicon

Recently, at Rubicon Technology’s 2Q08 earnings conference call with industry analysts, the company's president and CEO discussed the future of the LED market. 

At Rubicon Technology’s recent 2Q08 earnings conference call, Raja Parvez, Rubicon CEO, as part of an overall introduction, predicted that the LED market is expected to continue to grow 20+% per year over the next several years. Bill Weissman, Rubicon's CFO, and Parvez added that the company’s LED revenue grew 14% year-over-year and 8% sequentially in the second quarter as applications for LEDs continue to expand.

Rubicon, which raised about $80 million from its IPO in November 2007, is a manufacturer of monocrystalline sapphire substrates used in the growth of LEDs. Since sixty percent of the company's revenue comes from the LED market, Parvez presented insight into the state of the current market. In a transcript of the conference call, Parvez related High-performance LED applications, such as large area backlight units and solid state lighting, are growing rapidly. LED backlight units are penetrating into the notebook computer and LCD TV market faster than expected, these applications are being supported by major LED chip manufacturers in Japan, Europe, and the US, and as a result, our sales continue to increase in these regions. Parvez said they are also receiving orders for 6-inch sapphire products for the LED market to support next generation LED wafer development efforts by MOCVD equipment and LED chip manufacturers, and expect this large diameter development to ramp going forward as LED manufacturers continue to increase device performance and drive LED costs down to further penetrate lighting applications.

The market in Taiwan and Korea is expected to pick up in 2009. Taiwan and Korea are in early stage development for large-diameter LED chip production and therefore remain largely focused on small diameter wafers. The LED markets in Taiwan and Korea have been affected by worldwide macroeconomic conditions, as the demand for displays and general illumination increases and also as the largest display manufacturers such as AUO and Chi Mei enter the LED market and plan to install high volume production.

Consequently, the rate of growth for lower and LED applications that utilize 2-inch diameter substrates has slowed in the past quarter. Slower than expected growth in Taiwan has increased pressure on pricing for smaller diameter products as customers strive to increase their market share.

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