Most Optical Companies Struggle to Increase Revenue and Income, Says Report

Rapidly declining pricing, softening demand and a still uncertain global economy are creating challenges for manufacturers at all stages of the optical industry supply chain. Most of the companies that manufacture equipment, material and devices for LEDs, optoelectronic devices and photovoltaic devices are seeing declining revenue and income, or outright losses.

The Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs) viewpoint, “Compound Semiconductor Industry Review July – September 2012: Optoelectronics, Materials and Equipment” captures financial announcements from companies such as Soitec, AIXTRON, AXT, Hitachi Cable, JDSU, Finisar, Oclaro, EMCORE, GigOptix, IQE, Kopin, Cree, OpNext, First Solar and Spire. Despite declining financials at many of these companies, the report concludes that product development activities remain strong with the announcement of several new LED and higher data rate optical components.

“With a few notable exceptions like Dowa, First Solar and Cree, most of the other companies in this report struggled to increase revenue and income,” observed Eric Higham, Director of the Strategy Analytics GaAs and Compound Semiconductor Technologies Service (GaAs). “Companies in the LED and equipment market are trying to address rapidly declining prices in conjunction with declining demand and they are finding it difficult to increase revenue and income in this environment.”

Asif Anwar, Director, Strategy Analytics Strategic Technologies Practice (STP) added, “Companies in the optical component segment of the supply chain are developing products for higher data rate networks, but most of the equipment orders at the front-end of the optical supply chain are going to research institutions rather than production expansions.”

The Strategy Analytics viewpoint summarizes financial, product, contract and employment announcements from major optoelectronic material, device and equipment suppliers in the July – September 2012 quarter. It categorizes these announcements by material and equipment, laser, LED and compound photovoltaic activity.