SAN FRANCISCO— Veeco Instruments Inc. CEO John Peeler said Monday (Feb. 6) his firm sees no signs of near-term improvement in the light-emitting diode (LED) market and that overcapacity among LED makers could mean order for Veeco's metalorganic chemical vapor deposition (MOCVD) tools will remain at depressed levels for multiple quarters.
"While consumer electronics has been the dominant end market for LED technology over the past decade, and for which most MOCVD capacity was installed, these applications are expected to reach saturation in the next few years," Peeler said through a statement Monday following Veeco's quarterly report for the fourth quarter of 2011.
"Conversely, the LED general lighting market is in its infancy," Peeler said. "We believe that after a transition year in 2012, demand for MOCVD tools will reaccelerate, driving demand for thousands of additional next-generation reactors to make lower-cost, higher efficiency, brighter LEDs for lighting applications."
LEDinside, a unit of market research firm TrendForce, is currently forecasting that the global market for high-brightness LEDs will be worth a little over $10 billion in 2012, up from about $9 billion in 2011.
Peeler noted that, while estimates vary, LEDs are expected to represent more than 25 percent of the global market by 2015 and the majority of the market by 2020, compared to current market penetration of less than 5 percent.
Veeco (Plainview, N.Y.) reported fourth quarter sales of $191.7 million, down 36 percent from the fourth quarter of 2010. The company reported a net income for the quarter of $23.6 million, down from more than $103 million in the fourth quarter of 2010.
On a pro forma basis, excluding charges, Veeco reported a net income of $28.1 million, or 72 cents per share, down from a pro forma net income of $73.5 million, or $1.75 per share in the fourth quarter of 2010.
Veeco's fourth quarter results beat consensus analysts' expectations, which called for sales of $193.4 million and a pro forma net income of 68 cents per share, according to Yahoo Finance.
Veeco said its fourth quarter bookings totaled $143 million, up 8 percent from the third quarter of 2011. Bookings to LED and solar customers declined 40 percent sequentially to $67 million in the fourth quarter, the company said. Meanwhile, bookings for data storage customers totaled a record $76 million, a 258 percent sequential increase, as hard disk drive vendors scrambled to replace equipment damaged in last year's flooding in Thailand.
Veeco said it expects sales to fall to between $115 million and $140 million in the first quarter of this year. The company expects to report earnings for the quarter of between 4 cents and 25 cents per share.
Veeco's guidance for the current quarter came in well below consensus analysts' expectations, which called for sales of about $153.9 million, according to Yahoo Finance.