Deposition and process equipment maker Veeco Instruments Inc of Plainview, NY, USA has announced additional cost-reduction initiatives after deciding to significantly reduce future investments in its atomic layer deposition (ALD) technology development, reflecting its ongoing focus to balance technology investments with the potential for associated revenue realization.
ALD cost-reduction activities are expected to be completed by the end of 2016 and are in addition to the restructuring plans (announced on 1 August), which targeted $20m in annualized savings (starting in first-quarter 2017). In total, these initiatives are now expected to generate $30m in annualized savings.
"While we have continued to make progress with our ALD technology development for advanced semiconductor applications, the expected timing for revenue realization has been delayed," says chairman & CEO John R. Peeler. "Consequently, we have made the difficult decision to lower investments in our ALD program," he adds. "We plan to retain the intellectual property and technology capabilities and continue to assess future market opportunities."
In third-quarter 2016, Veeco expects to record total asset impairment and restructuring charges of $56-62m ($1.44-1.59 on a per-share basis). Of these charges, the vast majority are non-cash, relating to an intangible ALD asset impairment, while about $2m are cash restructuring charges.
Q3 revenue guidance update
Overall LED industry conditions and demand for Veeco's products have continued to improve, says the firm. As a result, revenue for third-quarter 2016 is expected to be at the high end of the guidance range of $70-85m (announced on 1 August). Veeco plans to issue third-quarter 2016 financial results on 1 November.
