Orbotech receives $24m order from Chinese panel producer
Israeli-based Orbotech (ORBK) has received a $24m order for display tools from CEC Panda (pvt) for their Xianyang, China fab that is under construction. The fab is a Gen 8.6 LCD project with a phase 1 capacity of 60,000 sheets/month, with an expected completion date of October 2017 (a bit later than our original August 2017 estimate), with high volume production in early 2018. While no date has been set for the phase 2 build-out, we would expect at least a one year window between phase 1 and phase 2, although we include nothing in our industry model at this point.
We believe deliveries to Panda will start in 2Q and continue through 3Q, and given that the phase 2 build-out is also expected to be 60,000 sheets/month, we would expect a follow-on order for phase to be approximately the same size, when received. What makes this order a bit more significant is that it does not fall into either of the two display growth categories that ORBK has mentioned in the past, OLED and large format LCD fabs. As a Gen 8.6 fab, it represents a ‘plain vanilla’ order, which is important to Orbotech should timelines for OLED and large format fab be pushed out.
Orbotech also commented that bookings for the flat panel division will reach $300m by 2Q 2017, for the trailing 12 months, and while this is obviously a sign of increasing demand, it is hard to judge how much of those bookings have been or will be delivered this year. At the least, the optimistic company view of flat panel bookings, give us confidence in our FPD division estimate of $58.7m for 2Q, with the company having booked FPD revenue of $184.8m (average $61.6m/quarter) for the last three quarters. We believe Orbotech is in discussions with a number of other panel producers concerning large format LCD display fab projects, and a variety of OLED projects, all of which would fall within the company’s display division segment.
We believe deliveries to Panda will start in 2Q and continue through 3Q, and given that the phase 2 build-out is also expected to be 60,000 sheets/month, we would expect a follow-on order for phase to be approximately the same size, when received. What makes this order a bit more significant is that it does not fall into either of the two display growth categories that ORBK has mentioned in the past, OLED and large format LCD fabs. As a Gen 8.6 fab, it represents a ‘plain vanilla’ order, which is important to Orbotech should timelines for OLED and large format fab be pushed out.
Orbotech also commented that bookings for the flat panel division will reach $300m by 2Q 2017, for the trailing 12 months, and while this is obviously a sign of increasing demand, it is hard to judge how much of those bookings have been or will be delivered this year. At the least, the optimistic company view of flat panel bookings, give us confidence in our FPD division estimate of $58.7m for 2Q, with the company having booked FPD revenue of $184.8m (average $61.6m/quarter) for the last three quarters. We believe Orbotech is in discussions with a number of other panel producers concerning large format LCD display fab projects, and a variety of OLED projects, all of which would fall within the company’s display division segment.
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