RBCN : NASDAQ : US$12.11
Based outside of Chicago, IL, Rubicon Technology is a materials company specializing in growing monocrystalline sapphire
products mainly for the LED and RFIC markets. It supplies 2″, 3″, 4″ and 6″ sapphire cores and wafers as well as sapphire optical
products for the aerospace and defense market. All amounts in US$ unless otherwise noted.
We maintain our BUY rating on RBCN shares.
Meetings throughout Europe and Asia over the past couple weeks confirm that the momentum we have been seeing in
sapphire prices and demand remains strong.
While the two-year downturn was painful, rising prices and increased utilization have historically led to strong earnings
leverage in Rubicon’s model. We expect these trends to reoccur this cycle as well.
Not surprisingly, we repeatedly heard that LED adoption as well as increased usage of sapphire in the iPhones and
potentially iPads was driving much of the incremental demand.
We were able to tour Rubicon’s polishing facility in Malaysia. The company is making a big bet on patterned sapphire
substrates (PSS). If successful, it has the potential to double the company’s polishing ASPs.