Rubicon Technology Inc of Bensenville, IL, USA (which makes monocrystalline sapphire substrates and products for the LED, semiconductor and optical industries) has announced plans to cease all production activities at its plant in Penang, Malaysia by the end of November and complete shutdown of the facility by the end of the year.
The Malaysia facility has been engaged primarily in producing polished substrates and patterned sapphire substrates (PSS) for the LED market, and the decision was made in order to focus on the optical and industrial sapphire market for the foreseeable future.
"The sapphire industry continues to be very challenging, with pricing for LED sapphire products continuing to decline throughout this year," says CEO Bill Weissman. "Given the market conditions, our strategy has been to build a business more focused on the optical and industrial sapphire market, where we have greater differentiation from our competitors and have interesting new technologies in development," he adds.
"We had also been trying to stay in the LED substrate market by limiting our product offering to 6-inch diameter wafers, where there is less competition, and working hard to reduce cost to make that product profitable. While we made significant progress on that front, the continual decline of prices has made the prospects of becoming profitable in the LED substrate market unlikely for the foreseeable future."
Rubicon cites its high-quality crystal, strong and developing US customer base, and optical finishing capability as strong differentiators in the optical and industrial sapphire market and believes that there are emerging applications in that market that will drive revenue and margin growth in coming years.
