Rubicon Technology (RBCN) to Close Penang, Malaysia Facility
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Rubicon Technology, Inc. (Nasdaq: RBCN) announced plans to cease all production activities and shut down its Penang, Malaysia facility. Production activities at the Penang facility are expected to cease by November 30, 2016, with the shutdown of the facility to be completed by the end of the year. The Company’s Malaysia facility has been primarily engaged in producing polished and patterned substrates for the LED market and the decision was made in order for the Company to focus on the optical and industrial sapphire market for the foreseeable future.
Bill Weissman, the Company’s CEO, said, “The sapphire industry continues to be very challenging with pricing for LED sapphire products continuing to decline throughout this year. Given the market conditions, our strategy has been to build a business more focused on the optical and industrial sapphire market, where we have greater differentiation from our competitors and have interesting new technologies in development. We had also been trying to stay in the LED substrate market by limiting our product offering to six-inch diameter wafers where there is less competition and working hard to reduce cost to make that product profitable. While we made significant progress on that front, the continual decline of prices has made the prospects of becoming profitable in the LED substrate market unlikely for the foreseeable future. As a result, we have decided to focus on the optical and industrial sapphire market at this time.”
The Company cites its high quality crystal, strong and developing U.S. customer base, and optical finishing capability as strong differentiators in the optical and industrial sapphire market and believes there are emerging applications in that market which will drive revenue and margin growth in coming years.
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