Commoditized LED MOCVD Market in China Leads to Veeco’s Revenue Drop in 4Q18

U.S.-based equipment manufacturer Veeco announced its financial results for the fourth quarter and fiscal 2018.

For 4Q18, the company registered a revenue of US$99 million, which dropped by 29.1% YoY. Veeco also reported a GAAP net loss of US$144.7 million, in comparison with US$8.5 loss in 4Q17. The non-GAAP loss was US$7.5 million. According to the company, the declined revenue and profit in the fourth quarter of 2018 was due to "Commoditization of the MOCVD market for LEDs in China.”

In 2Q18, the revenue from China accounted for 45% and the share of LED end market was 55%. By 3Q18, the China market slashed to 5% and the LED also shrank to 13% of its total revenue. In the fourth quarter, the China revenue accounted 9% while LED end market took 14%.

(Image: Veeco)

The revenue for the full year of fiscal 2018 came to US$ 542.1 million, with an on-year increase of 14%. But the total operation expenses have increased so the company reported a net loss of US$ 407.1 million.

Nevertheless, William J. Miller, CEO of Veeco, reacted positively towards 2019. He said, “We are excited about our future as we see order activity in leading edge, Front-End Semiconductor and exciting growth opportunities in Compound Semiconductor and Advanced Packaging.”

Veeco expects that in 2019, its blue LED business will reduce significantly with its China revenue continues to decline. On the other hand, growth initiatives will come from advanced front-end semiconductor and 3D Sensing technology development.

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