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DALSA lifted by MEMS shipments boost

29 Oct 2010

DALSA reports continued strong demand in its digital imaging business and a return to profitability in its semiconductor division during Q3.

DALSA’s management team displayed optimism and realism in equal measure as it unveiled the company’s results for the third quarter of 2010. “Our recovery from the depths of 2009 has been spectacular but we know that these growth rates are not likely to continue and are stabilizing. At this time, we anticipate growth in 2011,” said Brian Doody, CEO of the Canadian imaging specialist.

Doody announced overall third quarter revenue of $55.3 million and a net income of $4.8 million. This compares with revenue of $41 million and a net income of just $100,000 in the third quarter of 2009.

Breaking this down further, the digital imaging side of the business delivered $38.4 million sales and a net income of $4.2 million in Q3 2010, compared with revenue of $21.5 million and a net income of $200,000 in Q3 2009. In the semiconductor business, a net loss of $100,000 in the third quarter of 2009 swung to a net income of $600,000 in the latest period.

“I am pleased to report a return to profitability in our semiconductor business and a positive outlook for the division,” said Doody. “I am particularly encouraged by our progress in MEMS. In the third quarter, MEMS shipments increased significantly, quarter over quarter, and we ended September with a record MEMS backlog, reflecting growth in both demand and diversity of customers.”

One example that Doody was keen to highlight was an undisclosed customer that ran first prototypes in Q2 of 2010 and moved into full production in Q3 -- one of the fastest ramps that DALSA has delivered. “We have diversified our customer and product mix in terms of volume at the fab, utilization of different types of equipment and a better mix of margins across product lines,” he said. “The indicators are positive for MEMS going forward.”

A highlight from the digital imaging business was the positive market response to DALSA’s BOA vision system, which was launched early in 2010. BOA is described as a highly integrated smart camera that comprises all of the elements of an industrial machine vision system. The camera is now available in monochrome and color versions, and has a form factor of just 44 x 44 x 44 mm.

“We expect to beat our internal targets by about 30 per cent for the year,” said Doody. “The number of seed locations where we have the BOA product is greater than we expected and puts us in a good position. Growth for next year looks significant. People have been spending time incorporating it into their production lines, and there are some OEM opportunities.”

A final piece of good news to top off an already strong quarter came in the form of a $23.4 million grant awarded to DALSA by the Ontario Government. The grant will help to fund eligible R&D expenses at DALSA’s Waterloo facility in Ontario, such that up to 15 per cent of R&D expenditures will be reimbursed to DALSA as part of the “Next Generation of Jobs Fund” program.

“The award will allow us to realize our R&D-driven plans for business growth in Waterloo, in particular in areas such as infrared and x-ray imaging,” said Doody. “These programs will create jobs in Ontario and are expected to provide access to a number of large attractive markets adjacent to those we already serve. We anticipate that our net R&D expenditures, company-wide, will remain within our business model goal of 8-10 per cent of revenue. It is a positive development for our shareholders, our R&D teams, our customers and future employees.”

About the Author

Jacqueline Hewett is a freelance science and technology journalist based in Bristol, UK.

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