A recent analysis from Strategy Analytics (News - Alert) on the optical market segment shows evidence of many challenges for manufacturers, such as rapidly declining pricing and steadily softening demand. This comes as no surprise to those companies that manufacture equipment, material and devices for LEDs, optoelectronic devices and photovoltaic devices, but the report hints that these challenges may continue throughout 2013, as a result of the struggling economic landscape.
“With a few notable exceptions like Dowa, First Solar and Cree (News - Alert), most of the other companies in this report struggled to increase revenue and income,” explained Eric Higham, director of the GaAs and Compound Semiconductor Technologies Service for Strategy Analytics, in a statement. “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.”
The report, “Compound Semiconductor Industry Review July--September 2012: Optoelectronics, Materials and Equipment,” examined financial announcements during that period from such companies as Soitec, AIXTRON, AXT (News - Alert), Hitachi Cable and JDSU.
A somewhat unexpected finding in the report showed product development staying strong despite the financial decline of most of the companies. In fact, several new LED and higher data rate optical components were reported.
“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,” commented Asif Anwar, director for Strategy Analytics Strategic Technologies Practice.
Still, Higham remains positive about the optical market segment: “A good sign for this industry segment is the strength of new orders and revenue growth reported by makers of long-lead fabrication, manufacturing and test equipment, like Aixtron and Veeco. Adoption of LEDs and higher performance for optical transport networks is fueling investment to meet demand and product development to meet new requirements.”
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