Safe Harbor Statement

Transcription

1 May June 2013

2 Safe Harbor Statement Certain statements in this presentation relate to future results that are forward-looking statements as defined in the Private Securities Litigation Reform Act of During the course of this presentation we may make forward-looking statements that involve risks and uncertainties, including without limitation statements concerning our financial prospects and projections, gross margin and income, the competitive factors affecting our business, market acceptance of our products, customer concentration, market size, growth opportunities, product performance, and the success and timing of new product introductions. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management s beliefs, and certain assumptions made by us and speak only as of the date hereof. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. The risk factors are discussed in our most recent Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. We caution you not to place undue reliance on our forward-looking information and statements. We do not undertake any obligation to revise or update publicly any forward-looking information and statements for any reason. All forward-looking statements attributable to us are expressly qualified by our cautionary statements. 2

3 About Rubicon Technology Rubicon is the undisputed technology leader in sapphire for LED substrates and emerging applications 12 years in commercial sapphire industry Sapphire is the substrate of choice in LEDs and SoS RFICs Leader in large diameter sapphire production (6 & 8 ) and innovation (12 production) Fully integrated: powder to polish, with strong IP at each step of the process Low cost structure History of strong financial performance The First Choice for Commercial Sapphire 3

4 Investment Highlights RBCN is the world s leading supplier of sapphire products serving several high growth markets including LED lighting, SoS RFIC and Optical Market Growth Sapphire substrates support growth markets such as LED and SoS RFIC Potential new markets in sensor and power devices High Value IP RBCN s proprietary ES2 crystal growth methodology produces premium quality sapphire with high yields and favorable cost position IP throughout vertically integrated process from raw material through wafer polishing Enabling Efficiencies Migration to larger diameter wafers where Rubicon has a strong leadership position Larger diameter wafers will be the fastest growing sub-segment because of customer opportunity for cost efficiencies At the Forefront Long standing relationships with industry leaders Recognized technology and quality leader Most experienced producer of large diameter wafers 4

5 Rubicon Enables Multiple High Growth End Markets Platform Technology High Growth End Markets Technology leader with higher quality and largest diameter sapphire LEDs & Lighting Sapphire used in vast majority of LEDs Global leader in sapphire for LEDs Pioneered large-diameter wafers for SoS RFIC SoS RFIC Sapphire s physical properties make it interesting for a range of technologies Optical / Laser 5

6 LED Applications Rapidly Growing LED Application Examples LEDs for general lighting forecast to grow from $2.9 bn in 2012 to $5.8 bn in 2015 (IMS Research) Backlighting penetration is about 80% with continuing growth opportunity in large displays Interior and exterior LED lighting now used in midmarket as well as high-end automobiles Displays General Lighting Automotive 6

7 LED Industry Shifting to Larger Diameter Substrates LED chip manufacturers transitioning to larger diameter substrates to reduce cost One large customer is using production volumes of 6 wafers, and others have purchased R&D quantities We have also provided 8 wafers for customer R&D Rubicon s capabilities in producing large volumes of high quality, large diameter polished wafers from raw material are unmatched in the marketplace Sale of 6 polished wafers generates the majority of Rubicon s revenue today 7

8 Silicon on Sapphire (SoS) SoS RFIC chips are disruptive technology Replaces GaAs chips Reduces crosstalk Uses less power Smaller form factor SoS antenna chips have captured >40% market share in LTE smart phones SoS DTCs and power amplifiers are in the sales pipeline Our sapphire revenue for SoS RFIC adds significant diversification 6 wafers 8

9 Industry s Most Vertically Integrated Supplier 1) Raw Material Production 3) Core Fabrication 5) Polishing Greater control of cost and quality / Most reliable supplier 2) Crystal Growth 4) Slicing 6) Cleaning / Metrology 9

10 Proprietary Crystal Growth Equipment and Process Raw Material Production Convert raw aluminum oxide into highly purified/densified pellets using large in-house developed process and custom equipment High purity raw material at a lower cost and eliminates potential bottleneck in the supply chain Crystal Growth Unique, proprietary furnace designed and built in-house replicates organic sapphire creation process Ultra technical process requiring management of extreme temperatures (3800 C) Many years spent refining its process yielding the highest quality, largest diameter sapphire with improved performance and economics for us and our customers 10

11 High Precision, Flexible Fabrication Core Fabrication Patented in-situ orientation technology used throughout fabrication provides greater accuracy and eliminates process steps All diameters and crystal orientations from the same bulk crystal allowing for rapid response to changes in market demand and minimal inventory risk. Shift of fabrication to new Malaysia facility is resulting in significant savings. Slicing Custom made crystal orientation and metrology tools result in high precision slicing capability to address very demanding specifications for large diameter wafers. Significant investment top quality slicing equipment. Sapphire is the second hardest material in nature after diamond. 11

12 Pioneer in Larger Diameter Sapphire Polishing Polishing Production of large volumes of high quality, large diameter polished wafers from raw material is unmatched in the marketplace Patents pending on tools used in precise crystal orientation and measurement Contamination free wafer cleaning process Cleaning / Metrology Class 100 clean rooms and full suite of advanced metrology tools Quality measured repeatedly throughout the multi-step manufacturing process from quality of our raw material through cleanliness of polished wafers 12

13 Next Stage: Large Diameter PSS More Value Added Vertical Integration Patterned Sapphire Substrate (PSS) Benefit LED Customers Enhanced light extraction efficiency (higher Lumen/$) Benefit Rubicon Incremental revenue opportunity Deepen relationship with customers Extend vertical integration Better operational efficiencies across process steps Completely epi-ready Cost savings Better quality Full-customer service No PSS infrastructure and maintenance needed 13

14 Project LANCE Large Area Net-shape Crystal Extraction (LANCE) $4.7 million research contract with Air Force Research Laboratory, Manufacturing and Industrial Technology Division through 2015 Developing a completely new crystal growth platform Sapphire windows 36 x 18 x 0.8 Sapphire preferred for transparency in visible and IR spectrum and extreme durability Commercial and industrial applications 14

15 Unrivaled Focus on Being an Industry Cost Leader Internal raw material processing Crystal growth furnaces designed and built in-house Highly automated crystal growth process Low energy costs Very high crystal growth yields Offshore fabrication and polishing 15

16 Two Recent State-of-the-Art Facilities Chicago - 2 nd Generation Crystal Growth Facility Malaysia - Post Crystal Growth Processing Facility Focused on larger furnaces for large diameter wafers 135,000 sq ft facility Rubicon owns nearby land for a future facility Capture revenue opportunities and reduce postprocessing costs for large diameter wafers Proximity to Asia customers 65,000 sq ft facility Rubicon owns adjacent land for expansion Batavia Illinois Crystal Growth Facility Malaysia Polishing Facility 16

17 Revenue Mix 2012 Revenue by Product 2012 Revenue by Market Optical/ Other 10% Core 15% Optical/ Other 10% LED 49% 6 Wafer 75% SoS 41% Rubicon has sold more large-diameter sapphire than the rest of the industry combined. Note: Large Diameter defined as have a diameter of 6 and above 17

18 Financial Review Revenue EPS Diluted $160 $120 $134 $2.00 $1.50 $1.28 $1.61 $80 $40 $0 $77 $67 $ $1.00 $0.50 $0.00 -$0.50 -$1.00 -$0.48 -$ Strong demand from the LED industry resulted in significant price increases in 2010 and early 2011 Industry capacity expansion in depressed pricing for small-diameter cores 18

19 Current Results and Outlook 1Q2013 and Outlook 1Q2013 Revenue $8.3 million Loss per share $(0.15) 2Q2013 Outlook Revenue $10 - $12 million Loss per share $(0.19) to $(0.23) Comments Low utilization resulting in high idle plant cost Small-diameter pricing is improving for the first time in two years 20% LED wafer cost reduction achieved, with more to come Expect stronger 6 wafer demand in Q2 19

20 Rubicon's Competitive Advantages Strong IP throughout our process Cost leadership position Leadership in large diameter sapphire Longstanding relationships with industry heavyweights Vertically integrated across the sapphire value chain High-growth markets 20