Image: ams Osram
The German-Austrian sensor and lighting company has so far lost its only customer for its new MicroLED technology. The factory for eight-inch silicon wafers, which ams-Osram built specifically for this purpose in Kulim, Malaysia, for $1 billion (925 million euros), is therefore superfluous for the time being.
The customer, whom the company does not name, has canceled the key project for the pixel-sized LEDs, which can be used in smartwatch displays, for example, ams-Osram announced. According to insiders, it is the iPhone manufacturer Apple. Investors ran away on the stock market. The ams-Osram share collapsed by 41 percent to 1.30 francs (1.37 euros) in Zurich on Thursday. “The shock is still deep,” said CEO Aldo Kamper in an interview with analysts. “We were just as surprised by this as you were.”
ams-Osram is now writing off up to 900 million euros on the flagship project, which was actually supposed to go into operation this year. The company spent 1.3 billion euros on building the factory, on some of the machines that have already been delivered, and on developing the tiny light-emitting diodes, said CFO Rainer Irle.
The factory is being sold
In a statement, it said it would “examine the future uses of all assets included in the microLED strategy, particularly the new 8-inch LED factory in Kulim.” There is no new customer in sight who could step into the breach. A sale of the factory is under discussion; some of the systems could possibly still be canceled, according to Irle. In order to get money into the coffers, ams-Osram had already sold the plant to an investor and rented it back.
Kamper remained tight-lipped about whether Apple could be held liable for recourse. He is not allowed to say anything about the contents of the contract. “Discussions with the customer are ongoing,” said ams-Osram. Apple was traditionally one of the largest customers of the Austrian company ams before it swallowed up the German lighting company Osram. Even after losing some large orders, the company is still doing business with the US group.
- Read here: Billion takeover: ams offer for Osram was successful
Damper for the growth forecast
With the cancellation of the major MicroLED order, ams-Osram’s growth prospects are also reduced: Instead of medium-term sales growth in the core business of six to ten percent, only six to eight percent can be expected, it was said. Earnings before interest and taxes (EBIT) were missing 30 to 50 million euros this year because fewer research and development costs were capitalized and fewer subsidies were to be expected.
ams-Osram is examining additional savings in addition to the ongoing cost program in order to make up for the lost profit, the company said. Regensburg, where the MicroLED was developed, could also be affected. Kamper emphasized that loans are not in danger due to the write-offs: “We are still a healthy company with a strong balance sheet.”
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Source: Nachrichten
