LED equipment factory AIXTRON shares fell sharply this year's orders are uncertain

German organic metal chemical vapor deposition system (MOCVD/LED crystal growth equipment) Daiichi AIXTRON SE reported in its financial report on March 1 that the annual sales of Q4 (2011) decreased by 38% (quarter increase of 56%) to 140.1 million yuan. Euro; pre-tax pre-tax income (EBIT/benefits) changed from 86 million euros in the same period of the previous year to -16.9 million euros (previous quarter was 600,000 euros); profit-earnings ratio was reduced by 50 percentage points year-on-year to -12 % (1% in the previous quarter); gross margin decreased 44% to 8% (43% in the previous quarter). The annual revenue contracted by 22% to 611 million euros, with the business benefit plummeted by 59% to 112.9 million euros, and gross profit margin dropped by 15 percentage points to 38%.

Looking ahead this year, AIXTRON stated that the current order visibility is extremely limited, and that the market's gloomy situation may continue into the first half of the year. Therefore, setting the fiscal target is much more difficult than in previous years, but it is expected that the profit can still be positive. AIXTRON believes that this year is a transitional period of LED investment cycle, and revenue may be reduced. 

AIXTRON said that due to the substantial reduction of orders in the second half of the year, total annual orders received reached 513.4 million euros, a decline of 31%; at the end of the year, backlog orders amounted to 141 million euros, a decrease of 49%.

On the 1st of March, AIXTRON's US listed shares plunged 7.02%, while its main rival Veeco Instruments Inc. rose 4.77%, and Rubicon Technology Inc., a supplier of upstream sapphire substrates for LED materials. Declined by 2.68%, Philadelphia Semiconductor Index constituent stocks upstream chip maker Cree, Inc. Rose 0.03%.

Brian Lee, an analyst at Goldman Sachs Securities, commented on the US LED industry on November 18 last year and stated that LED lighting output value will reach 11 billion U.S. dollars in 2015; LED lighting product shipments are expected to average a composite year in the period from 2020. The increase rate (CAGR) will exceed 30%, and the penetration rate will jump from less than 5% to more than 50%. 

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