31 Jul 2013
Laser firm reports higher sales but a slowdown in orders.
Higher sales into the materials processing and microelectronics sectors have helped the diversified laser giant Coherent to register a solid revenue increase in its latest financial quarter.
For the three months ended June 29, the Californian company posted total sales of $213.7 million, up nearly 7% sequentially and 9% compared with the same period last year.
However, CFO Helene Simonet told investors to expect a slight dip in revenues in the current quarter, after total bookings fell to $189.2 million – down 14% compared with the equivalent period last year, when the figures were skewed by a sharp spike in demand from customers in the flat-panel display (FPD) business.
The detailed picture presents a mixed bag of trends, with CEO John Ambroseo highlighting strong performance in the materials processing sector, where the company posted increased sales and also received record bookings of $40.4 million.
“We shipped a prototype of a three kilowatt fiber laser [for metal cutting],” the CEO told investors. “We secured design wins in the instrumentation and medical OEM space. There was further progress in glass cutting, and we’re poised for a meaningful new LPTS [low-temperature polysilicon FPD backplane] order.”
Boosting sales in materials processing were customers buying kilowatt-class carbon dioxide lasers for packaging and ultraviolet sources for marking applications, while Ambroseo said that the high-profile field of additive manufacturing was another area providing market traction – this time for the firm’s direct-diode lasers.
Fiber laser customer
Fiber lasers still represent only a tiny fraction of Coherent’s overall sales, with the company choosing to focus on a select set of customers rather than take on IPG Photonics across the full range of applications.
But Ambroseo said that those customers it was engaged with were sending “strong feedback” and that the firm had stepped up its expectations for 2014 as a result. “We are making good progress,” said the CEO. “We are shipping one kilowatt lasers as planned and field deployment is going as expected.”
The 3 kW prototype laser, which was previewed at the Laser World of Photonics event in May (pictured), is undergoing tests at a customer facility, with Ambroseo saying that it had delivered the required cutting speed and quality in a package said to be considerably smaller than rival sources of a comparable output power.
“In an OEM configuration, the laser might even fit inside the customer’s tool,” mused the CEO. “The next step is to ship beta units to end users for device and process validation. If all goes according to plan, we would expect to receive an OEM volume order in 2014.”
In flat-panel displays, the application area that represents the largest single chunk of revenues for Coherent, the company is currently negotiating its next round of orders from key customers in Asia making LTPS, who need the lasers for a key annealing step in production.
The new systems will need to be compatible with so-called “WQXGA” displays, which feature a very high resolution in excess of 500 pixels per inch.
They will appear in future high-end smart phones and tablets, with Ambroseo saying that the market for active-matrix OLED (AMOLED) displays will grow from 195 million units this year to 450 million units in 2017 – suggesting that lots more lasers will be required as manufacturing capacities are ramped by the likes of Samsung and LG Display.
The typical size of those displays is also likely to increase, particularly if AMOLED televisions penetrate the market in a meaningful way. At the moment, Samsung’s 55-inch, curved AMOLED TV comes with a price tag in the $15,000 region, but in Ambroseo’s own words the devices look “pretty stunning”.
He thinks that if Samsung and others can reduce that early-adopter price as they ramp production, the upshot could mean a strong uptick in demand for annealing lasers for the TVs based on LTPS backplanes.
• Coherent's stock price appeared relatively unmoved by the latest quarterly results, which were largely in line with prior expectations. In early trading following the firm's investor call, the stock was trading at around $58 - close to recent long-term highs and valuing Coherent at a market capitalization of $1.4 billion.
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