Guido Pickert – Director of Investor Relations Martin Goetzeler – President & CEO Wolfgang Breme – Executive Vice President & CFO

Harald Schnitzer – DZ Bank David Mulholland – UBS Uwe Schupp – Deutsche Bank Jed Dorsheimer – Canaccord Adams Jed Dorsheimer – Canaccord Adams Andrew Huang - Sterne Agee Sumant Wahi – Redburn Partners Francois Meunier – Morgan Stanley Andrew Abrams – JG Capital Christian Rath – HSBC Sandeep Deshpande – JPMorgan Cazenove Youssef Essaegh – Barclays Capital Y. Edwin Mok – Needham & Company

Good afternoon ladies and gentlemen and welcome to Aixtron's’s Q2 2013 results conference call. Today’s call is being recorded and I would now like to hand you over to Mr. Guido Pickert, Director of Investor Relations at Aixtron for opening remarks and introductions.

Thank you, operator. Welcome, everyone to the second quarter 2013 results conference call of Aixtron SE. Thank you for attending today’s call. My name is Guido Pickert, Director of Investor Relations and Corporate Communications at Aixtron SE. I would like to welcome our President and CEO, Martin Goetzeler as well as our CFO Wolfgang Breme. Martin will begin with a strategy update or with a short introduction outlining the new five-point plan which details where management focus will be in the coming months. Wolfgang will as usual give you an update on the operational and financial performance of the business. As the operator indicated, this call is being recorded by Aixtron and is considered copyright material. As such, it cannot be recorded or re-broadcast without express permission. Your participation in this call implies your consent to this recording. As with previous results conference calls, I trust that all participants have our results presentation slides, page two of which contains the usual Safe Harbor statement. I will therefore not read it out loud, but would like to point out that this applies throughout the conference call. You may also wish to have a look at our latest IR presentation, which includes additional information on Aixtron’s markets and its technologies. This call is not being immediately presented via webcast or any other medium. However, we will place an audio file of the recording on -- or a transcript on our website at some point after the call. I would now like to hand you over to Martin Goetzeler, Aixtron’s President and CEO for opening remarks.

Thanks a lot Guido and good afternoon to those of you calling in from Europe, good morning to those joining us from the U.S., and good evening to those of you calling in from Asia. Let me start by making some general comments. During our Q1 call on April 25th, I shared with you my views on the potential that Aixtron has, not only in LEDs but also in equipment for organic LEDs, silicon semiconductors, power electronics and carbon-based applications. I also mentioned the weak market environment particularly in our largest market, LEDs, and how despite high utilization rates and increased inquiry levels among many of our customers, it was difficult to predict the exact timing of new orders. Order intake during Q2 has remained weak in that despite the fact that some of our customers are running at close to 100% capacity utilization. In addition, order visibility remains low. For that reason, it is still not possible for us to state at this point in time when the market will pick up. However, we still see the growth potential in the LED market. The next upcycle for LED manufactures will be driven by general lighting and in this area we are experiencing growing momentum as, in particular, industrial and commercial customers move to cost effective LED lighting solutions. This should lead to increasing demand growth for LED production tools although timing and extent remain difficult to predict. Returning to Q2 on slide three. Revenues and orders remained stable but at low levels. Revenues were up 13% sequentially to €40.5 million compared to the €40.2 million achieved in the previous quarter but were down 2% compared to Q2 2012. On a regional basis, Asia remains our biggest market as the majority was €31.7 million, or 70% of total revenues in Q2 2013 were generated in that region. Orders for the second quarter at €30.5 million were virtually flat compared to those achieved in Q1 2013 and Q2 2012. This is now the seventh quarter of orders around the €30 million level. Encouragingly, we managed to reduce operating losses from 76.3 million in Q1 2013 to €9.8 million in the last quarter, the strong improvement being mainly due to the write downs on restructuring expenses incurred in Q1 2013. Excluding those unusual items, we have seen a sequential improvement of gross margin from approximately 16% in Q1 to 27% in Q2 2013, mainly due to a more favorable product mix. EBIT also improved due to the stronger gross margin, coupled with improvements in our operating cost base, which we partially see as an early result of the first positive cost effects from the five point program which I announced to the shareholders at our Annual General Meeting on May 23rd. This program I believe is the key to strengthening confidence and trust in Aixtron and positioning the company to return to sustainable profitability in the coming years. In June 2013 there was a fire at a third party warehouse storing some of our UK inventory. The losses are covered by insurance. In our current view, the incident will not cause any delivery delays. Free cash flow in the second quarter came in at minus €3.7 million, leading to a positive free cash flow in the first half of the year of €5.6 million. Our cash and cash equivalents amounted to €215.9 million. Now I would like to give you an update on our five point program on slide four. The program has been kicked off as a companywide project under the leadership of the whole executive board and in particular, our CFO Wolfgang Breme. Responsibilities have been defined, timelines will be finalized over the next few weeks and a reconciliation of the financial impacts of all tasks and projects on the bottom line is in preparation. Let me go through these five points individually and give you an update on the respective progress within those. The first point is that our focus is on our customers. This requires all of us at Aixtron to be closer to our customers, to better understand their needs and support them to successfully drive productivity using our tools. To better enable this we have begun reorganizing our sales and service activities. We'll thus make better use of the local knowledge and customer understanding we have in our regional units. Additionally, we have established a team of key account managers with technical expertise to directly support our customers in the region. These key account managers have access to the entire Aixtron organization and report directly to me. Furthermore, in order to strengthen our product and services business, we are working with our customers to define roadmaps to increase their productivity and integrate them into corresponding development plans. Secondly, we will use our unique technology portfolio more effectively and enhance our future product portfolio. Our core competency is in the area of material deposition technologies. We have more than 30 years of experience in this area and are building -- and are working to build a really strong product development roadmap, which is not simply technology looking for a market. This requires proactive technology scouting as well as forward-looking and value driven management of our technology and product portfolio. We are committed to winning back our position as the leading global supplier of MOCVD for LED manufacturing. We held this position for many years but lost it, mainly due to a product that we launched too early into the Chinese market. We have since resolved the majority of the issues in relation to this launch, execute on-open issues and believe that with the CRIUS II XL, we have the right product for the Chinese market which offers ease of use, low operating costs and greater yields. We have also strengthened our team in China with local management and actively support our customers using our demonstration and training laboratory. We firmly believe that our product portfolio of two reactor technologies sets us apart from the competition in the market. Hence, it is our goal to regain the number one position in the MOCVD market for LED production. We are also focused on developing next generation products across three areas: compound semiconductors, silicon semiconductors and organic semiconductors. These products are being developed together with our customers and will be introduced at the right point in time. Let’s now turn to slide five please. In compounds, we continue to make good progress in offering our MOCVD solutions for LED and for markets beyond LED such as power electronics, thereby diversifying our end market exposure. We are also making progress in reducing the complexity of our total product offering. In silicon, we recently launched our ALD technology which is used for manufacturing memory or processor chips. In this area, we have -- as was mentioned earlier this year --achieved production qualification at one of the most important memory chip manufacturers in the world, which is a significant step forward for our QXP-8300 deposition tool. On the back of this very important milestone, we have successfully placed our tool with other customers for evaluation. We have made significant progress in establishing this technology. For organic applications, we are running demonstrations on our R&D equipment with several potential customers. Additionally, we are working on installing an integrated larger scale R&D cluster. Moreover, we are currently developing a platform to demonstrate the strength of our organic deposition technology on large substrates. The potential future market for display, lighting and organic electronics, to name but a few of the potential applications is significant. Organic LEDs or OLEDs technology is particularly increasing and interesting. This is an emerging technology which is at an early stage of commercialization. At an even earlier stage of commercialization is our technology to deposit carbon-based materials including graphene. This technology is predominantly used by the academic and research community to develop new applications based on these innovative materials. Additionally, we see increasing interest from the industrial side. These research activities target improved devices in the silicon and semiconductor industry. We also see increased interest for display and LED applications mainly targeting the replacement of rare earth material-based films. We expect the transition from research to production scale equipment in the medium term. Now back to our next point of the five point program on slide six. The third point is that we will systematically optimize our process and project flow. We are executing process optimization programs across the organization. We started a project in the area of cross-functional product development in April. As a part of this effort, we will achieve the same or even better product development results at lower costs. As a result of this product development project, we have now started developing our products according to clearly defined scheduling and quality milestones known as quality gate. This should lead to greater transparency in project progress and enable corrective measures to be introduced earlier in the process. At the same time we are beginning to integrate suppliers earlier into our development process which should enable us to improve product quality and minimize costs at the same time. Similarly, there are substantial optimization opportunities across our value chain. The key objectives is to improve supply chain management through closer integration and communication with our suppliers. In this way, we can significantly increase our level of service for systems and replacement parts, reduce cycle times, while at the same time minimizing the risk of surplus inventory that we have been exposed to in the past. A project has been launched to address these issues. Finally, we started cost and performance benchmarking. This will enable us to take an external view and investigate possible improvements by learning from the best and applying these best practices. Such thinking will surely lead us in positive new directions and make sure we are as competitive as we can be in the market. Fourthly with regards to finance, we will orient our financial goals around value creation. Managing clear financial goals is the basis for achieving sustainable profitability, and not only for Aixtron as a whole, but for individual business activities as well. There are four key financial measurements against which we will measure our entire organization: first, sales; second, operating result or EBIT; third, free cash flow and fourth, return on capital employed beyond the cost of capital over an entire business cycle. As I have mentioned on previous occasions, a key area of focus this year will be on cash flow. We are targeting to achieve a positive EBIT on growing revenues as the next step. Our ultimate goal is to generate a return on assets beyond our capital costs over the entire business cycle. Given the prevailing uncertain market environment, I cannot give an exact timeframe when we will return to profitability. But what we can do is reduce our cost base by optimizing our processes to strengthen ourselves for the market pickup. For the current year, it is our goal to reduce operating costs by 20% compared to 2012, while at the same time not losing focus on providing our customers with excellent technology solutions and world-class service. An element of this overall cost reduction was our recently completed staff reduction. In total, we will reduce our headcount by around 180 people. In Germany, more than 80% of the people we had to lay off accepted the offer to leave the company voluntarily. It is also part of our management duty to constantly review our product portfolio for its potential value and to expand our portfolio to include new technologies and services or to streamline it as needed. Two criteria are important in this context: our deposition core competency and customer productivity. But one condition is clear, it must create value for our shareholders. Finally, point five, we will strengthen Aixtron's corporate culture to live and breathe individual responsibility and promote clear communication amongst all our employees. After these difficult quarters, we want to strengthen Aixtron's high level of employee identification with our company which I believe makes the company highly distinctive. In addition, we must further review and refine our management culture and adapt to new challenges. Wolfgang, Bernd and I have an important contribution to make here. Through proactively conveying our goals, we can provide clear orientation and expectations. This includes agreed upon targets, deadlines as well as the development, definition and communication of suitable KPIs. Only then will we be able to evaluate our employees based on those goals. Furthermore, management will simplify and facilitate the teamwork with transparent and quick decisions which make it easier for each individual to take responsibility. The regular dialogue with our managers that we started in April serves to actively support this process and create trust across all levels of the organization. This also includes a transparent and continuous exchange of information within the organization. Finally, we will not shirk our responsibilities and we need to face problems and challenges be they internal or external head on. At this point, let me now hand you over to Wolfgang for a more detailed overview of the Q2 2013 numbers. Wolfgang?

Thank you Martin and hello to everyone on the call. Let me start with slide seven and our income statement. Revenues for the first half of the year at €85.6 million were 3% lower than in the same period last year which totaled 88.1 million. On a quarterly basis Q2 revenues came in at €45.3 million and were 13% ahead of the previous quarter with €40.2 million. However, orders remained weak due to the continuing weakness in Aixtron’s core market LED lighting equipment and order intake remained at the low levels seen in recent quarters. In Q2 2013 our order intake was €30.5 million which is similar to the Q1 2013 order intake of 29.9 million and the Q2 2012 order intake of 30 million. The second quarter of the year is the seventh quarter in a row with order intakes of around 30 million. Our total equipment order backlog is at 71.7 million. Please also note that as a matter of internal policy, the 2013 order intake in U.S. dollars is recorded at the current 2013 budgeted exchange rate of 1.30 U.S. dollars to the euro in contrast to last year’s exchange rate of 1.40. The net results for the first six months of 2013 came in at a loss of 87.8 million, which is significantly below the 23.9 million loss we recorded during the first half of last year. These losses are a clear reflection of the continuing weakness in our markets as well as the restructuring process we are currently engaged in. That said the work we have been doing is beginning to have a positive impact on our fixed cost base. Compared to first quarter, operating expenses came in at 22 million, 23% lower than the recorded 28.6 million in Q1. We believe the ongoing five point program that Martin has already mentioned will not only enable us to more quickly regain profitability but also win back the trust of all our stakeholders. Nevertheless, on a quarterly basis we continue to generate losses. The second quarter net loss was 11.8 million, which was an improvement on the €76 million net loss recorded in the first quarter of this year, which was influenced by a number of unusual items. Let me now take a closer look at some other Q2 line items starting with gross profit. Gross profit amounted to 12.3 million in the quarter. This figure includes effects from a fire in a third party warehouse in the United Kingdom, destroying large parts of our UK inventories. The damages from this event are covered by insurance. The Q2 2013 gross profit was substantially better than the result of the previous quarter which was heavily burdened by one-offs and totaled minus 47.7 million but only slightly below the previous year's figure where gross profit was at 14.7 million. For the second quarter, selling, general and administration costs, SG&A, amounted to 11.4 million which is 7.3% lower than the 12.3 million in Q1 and 4.2% lower in the same quarter of last year where SG&A costs amounted to 11.8 million. We also made substantial progress in optimizing our R&D cost base. In Q2, R&D expenses amounted to 12.7 million which was 23% below the €16.6 million in Q1 and 28% below the same quarter of last year where R&D expenses were at €17.6 million. The majority of these effects were due to lower material and labor costs. On an EBIT basis, the Q2 2013 loss amounted to 9.8 million which was an improvement with the previous quarter where it was minus 76.3 as well as compared to Q2 last year with minus 16.5 million. In the coming quarters, we will continue to optimize our cost structure without losing focus on our future market opportunities. Our staff reduction target aims for a 20% reduction in staff levels. The vast majority of these redundancies, i.e. more than 100 employees, have already agreed to leave the company through voluntary redundancy agreements, resulting in lowering headcount figures in the course of the coming quarters. Despite the weak results, Aixtron still has a strong balance sheet with 215.9 million in cash and cash equivalents, no financial debt and an equity ratio of 77%. Our cash position is up from the end of last year at €209.5 million and was broken down into 115.7 million of cash, cash equivalents with an additional 100,200,000 on deposits with a maturity of more than 90 days which was classified as other financial assets. The increase in cash is a clear reflection of our focus on cash generation and operating cash flow which in H1 2013 amounted to 8.6 million as opposed to minus 28.4 million in the first half of last year. This was due to an increase in advance payments from customers and a fall in inventory levels. The latter in particular has been an area of real focus. We have since the start of the year reduced inventories from 126 million as of December 31st to 59.5 million as at the end of the second quarter . This 43% decrease reflects the substantial inventory impairments in the first quarter as well as our ongoing focus on converting inventory into cash. On slide nine, our statement of cash flows, you can see that we also managed to be free cash flow positive in the first half of the year, generating 5.6 million in free cash flow over the period. This is a strong contrast to the same period last year when free cash flow was minus 37.5 million. Finally, slide 10 gives a good overview of the breakdown of revenues over the last six months. The major market for Aixtron’s deposition equipment and upgrade business remained in the first half of the year the LED manufacturing sector. The next biggest market was the equipment sales to the silicon semiconductor industry. This is a very good example of Aixtron’s ability to bring new technology to market. This growth is largely due to Aixtron’s new ALD equipment which is used for the production of DRAM memory chips. On a regional basis, 78% of total revenues in the first half were generated by sales to customers in Asia with Europe representing 12% and the U.S. at 10%. During the first quarter of 2013, Aixtron generated 75% of revenues, mainly 63.9 million from equipment sales with the remaining 25% or 21.7 million coming from the sales of spare parts and services. With that, I’ll pass you back to Martin.

Thank you, Wolfgang. Let’s move on to the near term outlook for Aixtron. Our view is that order intake, especially over the next months, is difficult to predict. As a result, we remain unable to give either revenues or earnings guidance for the current year. Due to the prevailing low visibility, we still are not in the position to describe the timing and extent of the pickup of orders in particular the LED industry for MOCVD equipment. In summary, I have seen challenging times before, as has Aixtron. And with our five point program we are setting to build a stronger Aixtron that is more flexible and focused on succeeding not only in the current subdued business environment but also in the future in which we are delivering our customer solutions to a whole range of markets with great growth potential. In our Q2 results, we are already seeing the initial impact of the five point program including the first steps to reducing our fixed cost base. Important to note is that we've build this program on a solid foundation with close to 216 million in cash at the end of Q2 2013 and no debt. Our five point program stands for confidence and trust in the company, in its technologies and in its employees, and this program stands for responsibility. We will not shun it, but instead will look for answers to our current challenges and think of them in terms of opportunities. And all this must convey a sense of trustworthiness in the company, its employees and its products. In this way, we are creating the precondition needed for growth and business success and that will make a crucial contribution to sustained profitability in the coming years. And with that, I’ll pass you back to Guido before we take some questions.

Thank you, Martin and Wolfgang. Before we take questions could I ask everyone as always to limit your questions to a maximum of two each time. This will allow everyone a chance to have their questions answered. Thank you. Operator, we will now take the questions.

(Operator Instructions) The first question comes from Harald Schnitzer from DZ Bank. Your line is open. Harald Schnitzer – DZ Bank: Yes, good morning gentlemen. I have got a question with regard to the ASP. Could you please outline what ASP is doing at the moment and secondly, at the beginning of the year, it was thought that quotation activity was much better obviously and Aixtron was more optimistic than now. What has changed between these three months? Thank you.

Yes, Martin speaking. Currently, to be -- I think what we mentioned in our Q1 call actually that we saw basically some quotation and inquiry levels throughout the industry also in certain regions. And I can only confirm that we expect here no fundamental changes in these market conditions. And therefore, I would like really to reiterate that the current -- that for the second half of the year, you will see a low visibility and from that angle, our focus right now really have to execute on our five point program. This is our focus where we are pushing right now. Regarding the ASP, as I said, we had -- we were as I said in Q1, we had a quite subdued situation and basically we were fighting for all the orders. And basically that's the situation we also had in Q2. So basically the pricing level were at levels we experienced also at the beginning of our Q2. Harald Schnitzer – DZ Bank: Thank you.

The next question comes from David Mulholland from UBS. David Mulholland – UBS: Hi it's David from UBS. Just two quick questions, firstly, looking through your presentation on slide 44, it seems like in the silicon business you're now saying you've moved into high volume manufacturing for high k dieletrics. And I was just wondering if you could comment on that, is there an incremental design win from where we were at Q1 and does that suggest the silicon business can pick up further into next year? And just secondly on OpEx levels, the run rate you have in Q2 is about 24 million, where you previously guided for the full year to be 100 to 105 million. Does that suggest there is some one-off benefits in Q2 and it picks up again in Q3, Q4, or are we actually running ahead of plan now?

Okay, let's -- again, Martin. I would like to answer the questions. First of all, I think on the OpEx, I would like to start with this. In the Q1 call, we actually said that we are targeting €100 million to €105 million for the entire year. This is basically right now still our focus. Therefore really important to see that for the two quarters to come that we can -- that we really have to consider what happens also on a sequential basis. And here it's important to see that we also buy some extra services, we order for example work packages from suppliers for R&D or also for process improvements. And you can trust me here, do this very selectively. However, the cost recognition depends really on the contract either on delivery or on percentage of completion. And therefore it could also still come to fluctuations in our OpEx. And I also want to reiterate and also state here that we will not sacrifice the success of our critical R&D projects. On the ALD, this is -- we have to see that this is clearly a long-term development in the high k business and as I mentioned in Q1, we had one -- we won one major customer where we were qualified for production and we'll have others going on for basically in R&D qualification and you can imagine this has -- this is more a long-term or medium term activity where we will [now be] qualified in a couple of weeks or months, as it takes us quite some time in the silicon center and that's where we still continue to do. So basically the long-term trend is very positive and nevertheless there is still some time for qualification. We basically, what I would like also to add here is due to the different ramp ups schedules of the customers also clearly there can be fluctuations in sales in this area. David Mulholland – UBS: Thanks very much.

The next open line is for Uwe Schupp from Deutsche Bank. May we have your question please? Uwe Schupp – Deutsche Bank: Yeah thanks for letting me on. Two questions please, first of all, sorry, I have to come back on the, on your first comment regarding the order outlook for the second half. I mean there is obviously quite a bit of official news flow out of China and some of the -- well unofficial news out of Korea that it would suggest there are some -- there were some orders in the market. So the question would be, do you expect those to be booked in Q3-Q4 even if it may be a relatively low level compared to where China was kind of two years ago. Or is it really that you basically lost all of these orders to your competitor, or what was really going on here? And then secondly for Wolfgang, could you just indicate the effect of the fire in the warehouse that you indicated in the UK? So was there a positive impact because of insurance claims, or what is really the underlying effect of the gross margin that you saw in the second quarter? Thank you.

Okay, thank you Uwe. I will answer the first question and Wolfgang can answer the second. As I mentioned during the Q1 call and you repeated this, we saw some increased inquiry level. I also said at that point in time that based on our experience, the conversion of inquiries into firm orders is always difficult to predict. However, for some of the inquiries we came to contractual agreements. Again however, some of the tools were -- be booked actually in order intake in the future, so when the next quarters to come. So they are not considered in the last -- only partially considered in the last quarter. As mentioned in our Annual Meeting, I would really like to reiterate we have to really focus now our important targets to reach there, we see them in the five point program. So we continue to do our homework here. We work with our customers, we work on our roadmaps and we believe that when we -- when the market peaks up and we were -- will be good there. Wolfgang?

Coming back to the warehouse fire, of course, the warehouse fire by the way was taking place at the end of June. So we are still in the process of assessing everything. So what we know is we had to scrap the inventory there because it was completely nearly destroyed. And at the same time, of course we made an estimate of the insurance which is included in our P&L and in the balance sheet. But I have to ask for your understanding, since that is still an open case, and we do not even have the report of the loss adjuster. I believe you understand that we cannot publish any further details at this point. But to answer the question, we have taken into account to an extent in the balance sheet. We know, I have made a careful estimate of the impact.

And I also would like to reemphasize that this will not have an impact on our delivery services, which I think is very important to us. Uwe Schupp – Deutsche Bank: Very helpful. Thank you very much.

The next question is coming from Jed Dorsheimer from Canaccord. Jed Dorsheimer – Canaccord Adams: Hi, thanks for taking my question. I guess I was wondering if you could provide some more color, if we look at the inventories, what percentage of that 59.5 million are in the old CRIUS II tools and whether or not the majority of the inventory affected in that fire were also the CRIUS II? And the second part of my question, the reason that I'm asking is, has to do with your current ASPs and your aggressive pricing. And if when the CRIUS II tool inventory has worked down, if we should expect pricing or your pricing to go back to maybe a normal a normal strategy?

Here is Martin speaking. I just want to ask you for your understanding that we are not publishing the details on this top level, so each of the items I think it’s important to state that in the UK we don’t have equipment, we have basically components and this is maybe an important information for you. Some of it was related to our more older technology Trials 2 and some to the Trials 2 Excel. However as I said before we expect that – and we see that write-out that it will not have impact on our deliveries. Jed Dorsheimer – Canaccord Adams: Well maybe as a follow up, should we expect – I mean typically in a duopoly it’s not common to see aggressive pricing from one of the two vendors. Given that you’ve acknowledged that the previous generation product was introduced in the market too soon, one can infer that your decision to be aggressive on pricing is to work down the inventory of this less competitive previous generation products. So I am wondering if you could provide any more context if we should assume that your pricing strategy will go back to a more normal level once this inventory is cleared out?

I would really make a couple of comments on this. First of all, I think it's important to acknowledge that even if we have equipment on stock it still needs some additional conversion in order to get to the latest state of our technology. So to the Trials 2 Excel status, so we have also invest into these products and therefore it’s our daily business, now our focus is really to keep prices stable or to bring them up. However the current situation is quite subdued and makes our life in this area much easy and therefore the prices are clearly in let’s say to a certain degree under pressure. I also mentioned in our last call that really the pricing this is what we relate basically to our LED products particularly in the area of what we say the Trials Excel. This is the area where the pricing basically has – is really under the most pressure.

We have further question from Sumant Wahi from Redburn Partners. Sumant Wahi – Redburn Partners: I had actually just two questions. One, sorry, Martin, to go back to guidance but I understand that the utilization rates are increasing as you said up to 100% in some customers but still there is a lot of unpredictability in terms of forecasting guidance but I was just wondering if you can give us some sort of idea about the mix of the LEDs which are being made at these customers. So for example, is there a possible that from what I understand to a certain extent that the Taiwanese and the Korean customers may be running or tier 2 customers may be running at 100% utilization but the mix within them is increasingly setting from mobile panels to more high brightness LEDs, a bit of color on that would be really useful. And second very quick follow up is just on your orders which you have reported for Q2, I was just wondering what percentage or if you can give us an idea of whether it is mostly non-LED or LED?

Regarding the orders, always you consider basically all components and all, it’s clearly the larger part is clearly LED today in our bookings. Regarding the shifts in – at the customers regarding the portfolio, it really differs, we cannot say it’s the same for all of us. What the trend and this is a general trend is clearly that the LED for lighting is growing basically for all of our customers. So it’s the shift towards LED lighting is happening at all customers and I have spoken to many over the last couple of months and so this is clearly a focus. Now the question is what kind of LEDs for lighting is this and there we have clearly differences, some are in the high power area, some are more in the mid-power area. So it depends really on the application maybe also on the region where these products go to and sometimes – other requirements. So it’s really – you cannot answer this question just by -- basically by one sentence. You have to differentiate but in general the trend towards LED lighting is happening in our customers. Sumant Wahi – Redburn Partners: But do you think just quickly on that – but do you think that the difference or the absence of order improvement which we have seen in the current quarter or maybe even for the next quarter is probably to do with the fact that the mix – historically when we are thinking of it as 70%, 80% utilization was part LED lighting and part mobile panels and now it has shifted more towards LED lighting and hence – the trend still is working in the direction is just the case of timing?

We can fairly say that the current increase in the capacity loading overall comes clearly from the lighting. That’s true.

Let me open the line for Vern Lau from Kepler.

Good afternoon gentlemen. I would like to come back to the initial question by Dave on the ALD business with the silicon customers. You so far mentioned that you’re qualified with the DRAM supplier but as far as I remember you are also targeting other applications. What’s the current status and your expectations for NAND Flash and potentially also Logic? And the second question is regarding the backlighting of TV sets. As far as I understand there is a transition happening from H-LED to direct LED backlighting and I wanted to ask if there is any meaningful impact on your business from that technology transition?

Thank you, Vern. This is Martin speaking. It’s, as you mentioned we also take other applications in the memory that’s true. We are working as I mentioned with on the qualification with JVs, with other customers and therefore it’s (inaudible) under the DRAM part. Regarding the question on Logic, we are – we have a couple of tools actually installed in some areas where – which are clearly focusing on R&D. We have here – we are here in close discussion with potential users and also important users and – but on this nevertheless I would like to add that on this point we are right now working on the key strategy how we are going to move forward. We see the [transfer of three files] also in the logic area going forward also coming. I just wanted to add that we have couple of tools already in – for R&D purposes on them.

The next question comes from Andrew Huang from Sterne Agee. Andrew Huang - Sterne Agee: Thank you for taking my questions. If some of your customers are running at such high utilizations, why do you think that the industry is not seeing a more significant pickup in orders?

This is also really good question which we also ask ourselves every day and to be honest, it’s really different customer by customer and we mentioned – there are still orders coming in, in certain cases, for example, from China but also from other regions. Nevertheless the question is this is really something I would like not to explain because it’s really different customer by customer and therefore we are observing and following this very much in detail. Andrew Huang - Sterne Agee: Okay. And then for my follow-up question, with R&D dollars down so much now, should we be concerned about your ability to come up with new products that will be compelling enough to drive prices back to more normal levels?

I refer to my question before, I said there will be some fluctuation in our OpEx because some of the activities, what we really did over the last couple of months, we looked again what are the decisive and most critical projects. And we are really focusing on those. And that clearly will not impact at all our innovative power. On the other side, I also said, we will have for example certain external services which we -- where we will -- which come not basically on a continuous basis but which come as a delivery and therefore there could be fluctuation also in the R&D number over the next couple of quarters. So you can trust us, we are really focusing on the most critical parts. For example, I mentioned more in detail the OLED side, I also mentioned ALD, I mentioned power. But I also mentioned our CNT activities. So there are a couple of projects which are really decisive for us which we are not sacrificing at all. Andrew Huang - Sterne Agee: Thank you very much.

We would now be happy to hear the question from Francois A. Meunier from Morgan Stanley. Francois Meunier – Morgan Stanley: Yes, thanks for taking my question. Yeah I've got a bit of a question on the balance sheet and actually how do you expect the ramp into the next maybe one day lighting cycle to occur, if it's going to be like a stop and go cycle or something quite linear? I ask this question, because in the last cycle, basically all your customers were happy to prepay and it feels like this time it's not likely to happen. So basically will you have enough cash on your balance sheet to pre-build all the tools which are potentially coming?

Last call I expanded a little bit and I don't want to repeat too much of this on the lighting cycle. It's clear that the lighting cycle is not one cycle like it was maybe in TE, but we have basically several applications, several regions which can clearly differ in the inflexion points. And therefore it will clearly go over certain periods and therefore it clearly is not the one point but it will go over a certain period of time as I said. And that's related because for some applications, basically LED today is already the best technology for others they still -- LED still has to fight because of cost of ownership. So in these cases, and this differs also by the way by region, that's why this inflexion point can differ and we cannot say there is only one. Nevertheless, we believe that there is clearly [a robust] demand for the lighting cycle as well. Regarding the cash, it's clear that we right now and I mentioned that too before that we are focusing on our key and most critical R&D projects which will -- which has the highest value for us. And as you -- and since I mentioned a couple, I think we will address the right ones. And this will clearly with the right cash management, which we have in place because what I would like to add here is I think with by executing our five point program, we are really focusing on process optimization. I think we can do much better in our R&D projects as we have done in the past and therefore achieve even more output than in the past with less resources. So it will not affect actually our innovative power. Francois Meunier – Morgan Stanley: I understand this answer, but basically what could happen and maybe that's where we differ in terms of view is that typically in the commodity market I feel that it's more likely to be like a stop and go CapEx cycle because basically it takes only one guy to say oh, I'm going to invest and then the others are scared to lose market share and then they invest as well. So on the other side, do you have enough -- will you have enough R&D resources to support everyone?

Yeah, as I said before, we are focusing on those applications where we see the highest value for our company. And therefore the focus right now as I mentioned before is really on the activities which I addressed before. And I don't see actually the risks that we will somehow have not sufficient funding or funds for these new and future activities because we will dedicate and allocate all our funding based on the different lifecycles of the technology. Francois Meunier – Morgan Stanley: Okay, that's very clear. Thank you very much.

The next question comes from Andrew Abrams from JG Capital. Andrew Abrams – JG Capital: Hi, thank you for taking my question. Just two quick ones. First, were there any sales of any written off equipment in the second quarter? I know it's kind of early from when you wrote them off but sometimes that does happen. And second, were there any sales of OLED equipment in the second quarter? Would you expect any in the third quarter and if so, are those going to R&D projects that you know of or are they being put into mass production at this point? Thank you.

I will -- thank you. Yes, Martin speaking. I will start with the second question. We did not book any sales in OLED the last quarter. All projects which we have right now in the pipeline are based to a large extent are R&D-driven. I cannot say every but most of them are R&D driven and therefore even those which will come going forward are right now in this phase still very much focusing on R&D and not in production.

Hi Andrew. Coming back to the inventory or the inventory reduction and the question, what if did we sell written off equipment. Of course when we reduce our inventory by writing it down in the last quarter, we took the future demand into account. That means the equipment we are currently selling is of course accounting wise the equipment which isn't sellable under a forecast. So it's not the equipment we have written off. So that's what we are currently doing. We reduced the inventory to an extent which matched with our forecast. That's the only way I can do that and so if the question is behind, are there any let's say windfall profit from selling off inventory, which is completely devalued, this is not the case for the gross margins show a positive development due to a different and better product mix compared to Q1, even if we compare it on a like-for-like and key basis. Andrew Abrams – JG Capital: Great, thank you. I appreciate it.

We have a next question coming from Christian Rath from HSBC. Christian Rath – HSBC: Yes thank you. Probably also on the gross margin, have you re-booked or reversed any restructuring charges yet in Q1 given that you mentioned that a lot of people already left the company. And second question, could you split the order backlog by product segment? Thank you.

Yeah, here is Martin speaking. Regarding your second question, we are right now focusing on splitting by product groups and we will further improve our reporting based on sales and we would like to do so if it has another value to do it for order intake we can discuss it. But currently we focus on sales here. The first question was...

Stayed close to the last inventory adjustment we had to do at the end of the last quarter. So no, there were no reversals of provisions or write-downs which we had to do in the first quarter. As you clearly mentioned, the whole market environment has not changed such that we are more positive on shipments than we were at the end of last quarter as Martin said before. Christian Rath – HSBC: No, I just mean related to the restructuring charges, not to inventory.

Okay, restructuring charges only to an extent for instance where for instance to give an example, if an individual left and got his severance pay, his or her severance payment, then of course we had to reverse the provisions, but just neutral. So that doesn't have any effect. Christian Rath – HSBC: Okay, thank you.

The next open line will be for Sandeep Deshpande from JPMorgan. We would be happy to listen to your question. Sandeep Deshpande – JPMorgan Cazenove: Yes, hi. Thanks for putting me on. My question is regarding the lighting market sales. You talked about the multiple cycles in the lighting market. We have seen an increase at this point but do you possibly have an explanation for why we are not seeing any orders coming through at all despite many of your customers in Korea and Taiwan being at 90% plus utilization for a long time now. It's not just one quarter for instance. So do you -- have you talked to these customers, talk about why they are not placing orders at this point? And are there any further risks that impede potential orders in the next couple of quarters potentially, a lot of other capacity which is unutilized lying around elsewhere et cetera? And I have one follow-up question.

I would like to refer to my answer before, I really admit really a lot of customers over the last couple of months and the situation is different by customer by customer. I also would like to reiterate a couple of customers also, all of these. It's not that nobody ordered, so a couple of customers ordered. The reason -- there are several things going on and I think that's clear, the question is for example if you look at the LED pricing, this is clearly an aspect some of the manufacturers look at. I would say also many of them are very strong in improving their yield. So they can increase capacity by -- so that's currently the situation. Nevertheless and I said this before, we see their need for and the potential for growth coming from the demand from lighting in the future the question is and we don't know right now. It's really about timing and also the extent. Sandeep Deshpande – JPMorgan Cazenove: And then following on to that regarding potentially a new tool whenever you decide to introduce a new tool into the market, do you think that technology leap forward that whatever that you can offer in terms of your new tool will be able to bring pricing back into the market that has been impacted over the last few years?

I think, and I don't know, maybe I mentioned that in the Q1 call as well. It's clear that the new tools will have significant additional features and also create basically opportunities to improve productivity. And therefore will give them additional, basically, significant additional benefits and that's why I think they will also help the market -- further development of the different customers. Important I believe is to say that for these customers and for there is a new tool, it's not just about the underlying cycle. We also have clearly to look also forward and look into the future, what happens for example with the replacement cycle. At a certain point, we have also to make sure that existing equipment which might not have the yields or the productivity also can be substituted by the new technologies. Sandeep Deshpande – JPMorgan Cazenove: And then finally, if you saw Philips, which is a big lighting vendor, they are talking about I mean almost already 25% of their revenues is coming from the lighting market. I mean with 25% coming, it's very difficult to correlate that here this vendor is talking about such a large percentage of his revenues already coming, they had in the past talked about 2015, 2016 going to 50%. But still no movement in the market, so is there something different about lighting compared to backlighting? Because there was such a huge amount of ordering for backlighting in 2009 through 2011. But lighting which is potentially a way bigger market doesn't seem to show that sort of momentum.

There is one big different between backlighting and the lighting market. In the backlighting you'll have a couple of players who basically do more or less in a very short period the move. In the lighting you have first of all many players, you have many applications, you have many regions. And it really differs on the different competitor situations when is a inflexion point. But if the inflexion point is there, then I also believe it will accelerate significantly as you see already in certain applications where you have already 100 or let's say 80% of penetration, it really depends on the application you are looking into. Sandeep Deshpande – JPMorgan Cazenove: Thank you very much.

The next question is coming from Youssef Essaegh from Barclays Capital. Youssef Essaegh – Barclays Capital: Good afternoon gentlemen. Thanks for taking my questions. The first one is on the gross margin, and I'm sorry if that was asked before again. But towards your target of reaching back at 40% gross margin, if there wasn't the UK fire this quarter, how much do you think you would have reported?

As I mentioned before, the UK fire it's too early to comment, so what we basically have done is to make an estimate to neutralize the damage balance sheet wise. And on a clean basis, the gross margin is what you can see in our profit and loss account. So the fire does not have an impact on the profit and loss account at this stage. And we will have to discuss it with our insurers going forward, but as I said before, it's not even -- the loss adjusters report is not even finished and they have to take into account that the big warehouse with several customers and several halls were destroyed. So it's not only as [involved] in that process. Youssef Essaegh – Barclays Capital: Thank you. And if I may, just to discuss a little bit the breakdown of the revenue you reported for the first time in a long time you sold something for the solar end market and even if my understanding from the call today, everything you sell at the moment, the silicon is still test rules basically for R&D. It's still a lot higher than what you did in 1Q and 4Q. So basically what I'm trying to understand is through this period of transition where you still have some end markets where you have to ramp. And then before the return of the LED investment, how much of a I would say an underlying run rate of revenue you know for more or less sure that you will have over the next few quarters.

Yeah thanks for this question. There are two remarks. Just before ALD I mentioned there is one customer where we have qualification for production. So the most part of the sales is related to production in this case. Secondly, solar is a mature market. It's basically still developing but it's quite a mature market; it's not something where we had a lot of investment in R&D or so in order to get it going. Therefore in both segments we have already quite a stable and mature product. They are still clearly working with the customers but these are not the areas where we have to basically do pathfinding with our customers. The areas where this is much more the case is for example is in the area of OLED. And that's a good example, I think I made also a couple of comments on that. Youssef Essaegh – Barclays Capital: Okay. I mean still when you did 12 million in silicon, even if it's qualified product and 4 million in solar, that's a good half of the revenue you reported. So basically are we going to see 12-15 million run rate of silicon a quarter going forward or is it going to go back to something between zero and 4 million?

Basically the sales in this ALD are related to the ramp up of our customers in their production. And therefore you have automatically fluctuation when he is basically setting up the equipment and he does this in certain steps and in certain waves. And therefore there can be also changes as I mentioned between quarter and quarter. Youssef Essaegh – Barclays Capital: Do you expect it going forward to be more in the range of 12 million or more or?

What I say, there will be fluctuation nevertheless and this is what I want. I also want to say since we are in qualification also with other customers, we really see the positive opportunities of this product range.

Okay. We have a further question coming from Edwin Mok from Needham Company. Y. Edwin Mok – Needham & Company: Hi, thanks for taking my question. So first question I guess on the LED customer, you mentioned that some of them are at 100% utilization. Have you seen them either consolidating some of the weaker players by buying up capacity, or that they may be buying equipment in the second hand market that might help them to leverage running 100% utilization?

We are hearing a lot, for example, in China but we didn’t see it yet. So we didn’t – if you don’t have any confirmation what we see is that we have some LED players buying maybe in other parts of the world IP or know-how. This is happening actually right more than consolidation. But it’s – what I don’t want to say – that is not possible, it can happen going forward. Y. Edwin Mok – Needham & Company: And then just quickly going to ALD, so you mentioned that your one large DRAM customer is in production and that’s why you get all these orders and revenue over the last few quarters, right? I was curious for that particular customer you might have some insight into their plans, into the second half and in 2014. Do you expect that to drive some growth just from that one customer or are you counting on qualification out of DRAM or beyond DRAM customer to drive growth of that product?

Our expectation for the future is basically both that we grow is our existing customer and that we also – there is a qualification of our tools, we also go with the new customer.

We have one more question coming from Russell Tess from Close Products.

Actually my questions have been addressed. Maybe a quick one, in the past we were talking a lot about the [analog] LED tools that was sold in the secondary market and I was wondering what is the current situation right now and are you able to give but quantify their churn over capacities in the analog LED tool market?

We don’t see here a relevant price of business right now. One of the reasons also might be that some of these equipments might not be related to state of the art technology. So for some of the companies then it’s maybe easier to buy the latest technology with the different companies also.

And on the over capacity situation, what’s – are you able to quantify here a number?

It would basically be a guess and therefore I would like to refrain from doing so.

Well, thank you very much. At this point we will wrap up the AIXTRON second quarter 2013 earnings call. Thanks for joining us and your questions. If you have any additional questions, you know where to find us here in Europe or in the US. And we are happy to hear from you. Thank you for your interest and good bye until next conference.