By Melinda Rose, Senior Editor
Strong sales in the microelectronics market, particularly those of excimer laser annealing systems for flat panel displays, contributed almost half of Coherent's third-quarter revenue of $196.4 million, the laser maker reported last week.
Profit for the quarter, which ended June 30, was $17.2 million, or 72 cents a share, down slightly from the record-setting $19 million, or 74 cents a share, for the same quarter a year ago.
Bookings received during the quarter were $218.9 million, a decrease of 4.2 percent year over year but an increase of nearly 20 percent over the previous quarter. The book-to-bill ratio was 1.11, resulting in a backlog of $369.4 million, which is a record, CEO John Ambroseo told investors.
The microelectronics and materials processing markets performed solidly, while there were declines in the scientific and instrumentation markets, which are subject to funding cuts and uncertainties, Chief Financial Officer Helene Simonet said in an earnings call with investors on Thursday.
Coherent's microelectronics market includes flat panel display manufacturing, advanced packaging and interconnects, semiconductors and solar cell production. Included in flat panel displays are mobile phones, ultrabooks and laptops, digital cameras, car navigation systems and TVs.
Excimer laser annealing allows high-volume production of polycrystalline silicon on conventional glass substrates, instead of requiring such polysilicon layers to be produced on expensive special glass at high temperatures. Low-temperature polysilicon (LTPS) greatly enhances the performance of silicon thin-film transistors in certain types of displays.
Coherent's excimer lasers are the only industrial-grade ones with the high pulse energy optimized for that application, the company says. Its 1000-W Vyper laser enables scaling to current Generation 5 and 5.5. substrates, and, in the near future, to Generation 8.
"We received significant orders for flat panel display (FPD) annealing laser systems from multiple end users in Japan, Korea and China. We also shipped our first FPD products from our new Korean facility and our expanded German site," Ambroseo said. The company also shipped its first Gen 8 annealing system.
Coherent's third-quarter sales revenue from other markets is as follows: scientific ($35.1 million), materials processing ($28.4 million) and OEM components and instrumentation ($35.7 million).
"We continue to see weakness in the advanced packaging market, but our remarkable successes in the flat panel display market more than offset this shortfall," Simonet said.
Ambroseo said the company will formally release its kilowatt fiber laser, the Highlight 1000FL, in the current quarter and expects first volume orders in fiscal 2013.
The research market in the US is reverting to prestimulus levels. "While Germany continues to invest in R&D, the balance of Europe is flat to slightly down," Ambroseo said, adding that Japan's redirecting of funds to the rebuilding efforts after the 2011 tsunami and earthquake could trim up to 5 percent from its R&D initiatives. China and India, however, remain poised for double-digit growth.
"The instrumentation market has seen the same pressures as the scientific market from lower government spending on life sciences," Ambroseo said. "This has led customers to tightly manage inventory, rely on smaller batch orders rather than semiannual or annual orders. We believe we are maintaining market share based on the strength of our product portfolio, particularly the OBIS platform, which has become the industry standard for instrumentation lasers."
In terms of competition in the fiber laser market, Ambroseo said the company is differentiating itself by taking an OEM module approach, rather than a one-box design.
"We're trying to give the customers flexibility to buy the components that they need, and not duplicate what they already have," he said, adding that the product is designed to be field-servicable, which is also seen as an advantage by customers.
Looking ahead to the fourth quarter, Simonet said total revenue between $193 million and $196 million is expected.
For more information, visit: www.coherent.com