08 Aug 2008
Current softness in semiconductor markets and flat growth in materials processing will not prevent expansion into other markets
“Machine tooling will not be one of our growth areas – but we have others.”
Despite growing economic uncertainty, Rofin-Sinar posted third-quarter results that exceeded the predictions of financial analysts. Sales for Q3 increased by 23% compared with the same period last year, reaching $149.7 million. The result reflected increased demand in Asia, improved sales to certain of the company's key markets, and was boosted by the weakness of the US dollar.
"Under the circumstances, we delivered good numbers," CEO Gunther Braun told investors. "But the environment has changed from a year ago. Laser companies are fighting harder for orders, so it's not as easy as it was."
A breakdown in figures for the year to date showed that the machine tool sector accounted for 35% of sales, slipping slightly from 37% in 2007. Sales to semiconductor markets rose to 26 from 21%, although like other laser suppliers, Rofin recognises that the segment would be soft in the future. The automotive sector also increased, from 7 to 11%.
Even though sales to the company's macro and machine tool customers still make up about a third of Rofin's business, the lack of substantial growth since the previous year was a symptom of the wider economic situation, according to Braun. "The worldwide climate for machine tools is slower," said Braun. "We knew this was the case for North America, and now European customers are seeing slower business too. We have to face the situation, although we don't fear it. Machine tooling will not be one of our growth areas – but we have others."
Executive chairman Peter Wirth agreed. "The softening of demand for our macro products from the machine tool industry should be offset by higher demand for our micro and marking laser products, together with increased contribution from the components business," he commented.
“I am convinced that solar will be a growth driver for our business.”
Braun indicated that the weakness of the semiconductor market would not prevent the company's micro and marking sector being a significant growth driver. The photovoltaic segment would also continue to develop, he said. "We expect softening of the semiconductor market to continue, although we nonetheless set a new record in this area in the last quarter. In photovoltaics, our strategy is to concentrate on being the laser supplier, either direct to solar cell manufacturers or to systems manufacturers for production lines. I am convinced that solar will be a growth driver for our business."
Although Braun would not divulge the exact scale of Rofin's current solar business in financial terms, he did indicate the significance of the company's majority shareholding in m2k Laser, the Freiburg-based laser diode developer. "m2k is capable of growing wafers, and they have an agreement to use equipment at the Fraunhofer Institute, having originated as a spin-off from the Fraunhofer Institute for Applied Solid State Physics. So we don't need to invest millions in order to get a wafer fab."