Veeco books rush purchase orders for LED-making equipment
April 22 (Reuters) - Veeco Instruments Inc said it was booking rush orders from some of its LED customers that would help reduce excess supply, sending the company's shares up 9 percent after the bell.
"We are now booking some rush purchase orders - the first we have seen in two years," Chief Executive John Peeler said.
Veeco, which makes equipment critical for LED production, said some of its customers in China are planning to expand fabs, or factories where semiconductor chips are made.
"The market has been pretty slow in recent quarters so the fact that they're getting rush orders, things are probably picking up," Morningstar analyst Andy Ng said.
The analyst also said the rush orders will help reduce excess supply that has been plaguing the industry.
Shares of the company, which have fallen 5 percent in the last month, were up at $35.14 after market. They closed at $32.23 on the Nasdaq on Monday.
The company said first-quarter system shipments declined sharply from the preceding quarter, in data storage and Metal Organic Chemical Vapor Deposition (MOCVD) -- a technology used in LED making.
"We're experiencing the most challenging business conditions since 2009, and this downturn has persisted longer than anyone predicted. Business conditions have been weak across all our end markets for well over a year now," Chief Financial Officer Dave Glass said on a conference call with analysts.
The chip-equipment maker said on March 1 that it was unable to file its annual report for 2012, saying it needed more time to evaluate the timing of revenue recognition and related expenses on the sale of certain MOCVD systems. ()
As of 2011, Veeco's largest customers included Elec-Tech International Co Ltd and Sanan Optoelectronics Co Ltd.
"Despite prior projections by both Veeco and some investors that overstated the opportunity for MOCVD tool shipments over the past two years, we do see orders improving later this year," Noble Financial Capital Markets analyst Mark Miller said in an e-mail to Reuters.
He also expects the improvement will be modest, compared with orders in 2010.
Last year, the company had seen orders dry out as solar cell makers clamped down on expansion and a glut in the LED market.