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Newport bounces on semiconductor optimism

31 Oct 2013

Stock rises as the photonics company recovers from early-2013 woes.

Growing orders from customers in the semiconductor industry and optimism for the year ahead saw shares in the photonics company Newport jump in value by 11 per cent in early trading on October 31.

That followed the Irvine, California, company’s financial update for the third quarter of its fiscal year 2013, in which sales of $139 million were down compared with the prior year but up nearly 4 per cent sequentially and in line with expectations.

While total orders were down 2.2 per cent sequentially, investors appeared to take heart from a sharp upturn in sales for microelectronics applications and CEO Robert Phillippy’s expectations of strong sales and profit growth in 2014.

For the latest quarter, the company delivered a pre-tax profit of $1.8 million. That was down sharply on the figure of $11.5 million posted a year ago, but the CEO remains upbeat:

“Our sales and orders have increased significantly from the low levels we recorded at the beginning of this year,” said Phillippy. “These increases have been driven primarily by the success of our new products and recent design wins for new programs, rather than by improvement in market conditions.”

Suggesting that Newport had been able to make market share gains in recent months, the CEO told investors about three recent design wins in the semiconductor market, including one in the emerging extreme ultraviolet (EUV) lithography space.

“All three of these programs included orders for design and prototype unit delivery and will be completed during 2014,” he said, adding, “All of our major semiconductor equipment OEM customers have communicated that they expect increased orders and sales in 2014.”

Brain activity
While the precise timing of that upswing remains something of an unknown quantity, Phillippy again highlighted a high level of interest in Newport’s “Quasar” ultraviolet laser, which was launched at the SPIE Photonics West trade show in February.

Capable of producing high-energy UV pulses at a high repetition rate, the laser is expected to find a wide range of applications, including wafer dicing, PCB drilling, ceramics scribing and glass cutting.

Sales of Newport’s ultrafast “DeepSee” laser also continue to climb. Offering a very broad tuning range and capable of three-dimensional imaging of live tissue, Phillippy highlighted its potential application in the hot-topic area of human brain research.

Newport’s Ophir subsidiary – one of a series of acquisitions completed by the company in the past two years - has also recovered from a tough start to the year and weak spending by the defense sector.

Following significant cost-cutting measures over recent months, it is now said to be delivering its best-ever operating margins, while the division has also just launched a laser monitor capable of measuring the optical characteristics of hugely powerful beams.

The first such “BeamWatch” unit has now been shipped to Japan, where it is being used to measure the output of a 100 kilowatt laser under development for heavy industrial applications.

Newport subsidiary Ophir's Gary Wagner on the "BeamWatch" beam monitor for high-power lasers:

More streamlining
In a further move designed to streamline its operations, Newport has also moved its manufacturing operations in Stratford, Connecticut, to Wuxi in China and Bozeman, Montana, while retaining engineering and sales functions in Stratford. The switch is expected to save the company around $1 million per year.

In addition, Newport has agreed the sale of its “micro robotics systems” die-bonding business unit based in Billerica, Massachusetts. Although the unit delivered $12 million in sales over the past year, and had identified further growth opportunities, Newport decided to sell the business as it no longer fits into the company’s strategic focus on lasers, optics and photonics technology.

SPIE has recognized Newport with an award for its grants that allow students to travel to photonics industry events. The company provides some $15,000 annually to help pay for researchers to attend and present their work at the Photonics West and Optics + Photonics symposia.

Applications for the next round of Newport's Research Excellence Travel Awards Program are due November 25. For more details, visit the dedicated SPIE web page.

SPECTROGON ABPhotonTec Berlin GmbHAVANTES BVFISBASACHER LASERTECHNIK GMBHPhoton Engineering, LLCSynopsys, Optical Solutions Group
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