Earnings Season — Canaccord Genuity says sapphire market shows signs of stabilizing

It is earnings season and LED and sapphire related companies continue to struggle due to the slow economic recovery and oversupply of sapphire. One financial analyst sees light at the end of the tunnel.  In observation of Rubicon Technology (Nasdaq: RBCN) earnings last week, Canaccord Genuity’s Jed Dorsheimer found some positive signs for Rubicon and the sapphire industry.

According to Dorsheimer, “the sapphire industry is actually showing signs of stabilizing. While we do not expect much in the way of price increases again, we note that Rubicon is one of the low-cost providers in the industry. With this in mind, we feel that when the industry turns and inventory is worked down the increasing utilization should return a good amount of leverage and income to the model.”

Rubicon is already showing signs of recovery of the sapphire market with orders for two through four inch cores increasing in the first quarter.  “We have continued to maintain high utilization of our crystal growth facilities throughout this slowdown because we are confident that demand will be strong in the second half of 2012,” commented Raja Parvez, Rubicon CEO and president, in the company’s earnings news release.

For Further Reading:  Large Diameter Sapphire Supports LED Market Growth

 

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About Beth

It seems like LEDs are in everything these days – backlighting everything from your mobile phone, Apple iPad and flat screen HDTV to traffic lights, light bulbs and even the kitchen sink. But, making LEDs is a complex process that begins with the creation of sapphire. Not the pretty blue gemstone, but large commercial crystals that can weigh as much as 400 lbs. Once these large sapphire crystals are grown into boules and cooled, they’re cut into cores, cut further into flat circular wafers, polished and then used to grow LEDs. About 85 percent of HB-LEDs (high brightness) are grown on sapphire. There’s not that much information out there about the process. This blog is meant to shed some light (excuse the pun) on sapphire, LEDs and the industry that is devoted to making our lives just a little brighter. In the months ahead, we’ll tackle some topics that will help you understand a little more about sapphire and LED industry. Here’s a sample of what we’ll cover in the coming months: • Growing sapphire • For a wafer, size matters • Quality - When sapphire wafers go bad • LED light bulbs • Market & myths • Interviews with industry shining stars • Reports from industry events • Current events in perspective Please join us each week to learn more about sapphire and the LED market. We look forward to seeing you.

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