!!! Press Release !!! AIXTRON: Very strong growth The semiconductor industry is worth billions. In contrast to simple silicon chips, the demand for compound semiconductors is growing rapidly as the need for more complexity and greater processing speeds increases. The chips are used for:
AIXTRON manufactures so-called MOCVD equipment, with which such compound semi-conductors can be produced more economically, to a higher quality standard and in larger volumes. AIXTRON has a global market share of more than 30 percent in the production of such machinery and is thus market leader. Customers are principally international electronics concerns, as well as their suppliers, but also include state-run and privately-owned research institutes. The company, founded in 1983 in Aachen, can boast impressive growth rates. In 1996, revenues increased to DM 44.5 million -- a rise of more than 70 percent over the previous year. In the same 12 months, earnings tripled -- from DM 1.7 million to almost 5.3 million. Pre-tax rose to almost DM 6.7 million, a close-to fourfold increase in comparison with 1995. Earnings and dividend payments totaling DM 1.3 million from the American subsidiary - AIXTRON Inc. in Chicago - have contributed to these results. After-tax, AIXTRON posted earnings of DM 3.6 million. In the first six months of the current year, AIXTRON's growth has further increased. Revenues at end-June totaled DM 35.4 million while pre-tax stood at DM 8.4 million. And 1996's results have already been bettered in the first half. This positive development can partially be attributed to the boost in earnings. However, it also a reflection of the success of our outsourcing - AIXTRON is increasingly concentrating its production around its core competencies. When other firms of similar high quality can produce more quickly and cheaply, then they should be encouraged to do so. Examples can be found in the processing of special steels or the wiring of control cabinets. AIXTRON is working together with almost 500 suppliers, the majority from the EUREGIO in and around Aachen. Further comments on the balance sheet: As a consequence of the very good results and growing order books, the 1996 balance sheet total of DM 40.3 million was almost double that of the previous year. With each new order for an AIXTRON machine - which are priced in a range between DM 0.4 and DM 6 million - an installment of 50 percent is due. These payments have a direct impact on the balance sheet. The high number of orders placed in 1996 led necessarily to a reduction in AIXTRON's shareholder equity ratio, which fell from 35.4 percent in 1995 to 25.6 percent at end-December 1996. In the current year, subscribed capital from corporate funds has been increased from DM 4.2 million to DM 10 million. This allows AIXTRON to prepare itself for further growth, especially in the production of essential compound semiconductors -- market research institutes forecast the market for gallium arsenide compound chips to be worth some $2.2 billion in 2000, significantly up from 1996's $1.3 billion. In order to finance this growth and to keep all other options open, AIXTRON's owners have recently changed the company´s legal entity to a German "Aktiengesellschaft."
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