Veeco hoping for first solar profits in 2010

NEW YORK (Reuters) - Veeco Instruments Inc hopes its nascent solar equipment business will begin to generate profits this year as it makes its first shipments into the fast-growing Asian market.

"I think we'll make money this year. That's our goal," Chief Executive John Peeler told Reuters in an interview.

Veeco's biggest business is through the sale of equipment to make LEDs, or light-emitting diodes, but it hopes to grow in the market that produces photovoltaic solar systems.

Veeco has orders worth about $30 million for solar making equipment from customers in China and South Korea, and it expects to ship them in the first half of the year and receive revenues in the second half, he said.

The company has focused on thin-film photovoltaics using copper indium gallium diselenide (CIGS) technology.

Sales of solar CIGS systems are tiny compared to polysilicon-based panels, but costs to build the CIGS cells are expected to fall to 50 cents per watt in the coming years, less than half the level of current silicon cells.

For now, Asia is the main demand market for that equipment, Peeler said, and Veeco has customers "in the funnel" in other countries there beside China and South Korea.

"We haven't seen a lot of activity in the U.S., and it's been a tough capital year in Europe," where reductions in government support for the industry has sapped spending, he said.

On Monday, Veeco posted earnings of 41 cents a share excluding one-time items, topping analysts' average forecast of 34 cents a share.

The company is also ramping up its capacity to manufacture the MOCVD equipment, or metalorganic chemical vapor deposition equipment, to meet growing demand for LEDs that are taking increasing share of the television market as well as the lighting market.

Veeco shares rose 8.6 percent to $33.73 on Nasdaq on Tuesday.

(Reporting by Matt Daily; Editing by Richard Chang)