Crossing Out The Rubicon: RBCN Plunges As Peregrine Semi Stop Taking Shipments Due To Declining Demand

Rubicon Technology (RBCN) shares are down sharply this morning after the provider of sapphire substrates to the chip industry announced that a key customer, Peregrine Semiconductor, informed Rubicon that “it will not take any additional shipments of sapphire products until further notice due to declining demand for its products.”

Last month, Rubicon cut its guidance after modifying its supply agreement with Peregrine. But now things at Peregrine have gotten worse, apparently. (There are some problems in the economy, apparently; maybe you’ve heard about them.) The company said that $7 million in orders remain on its Peregrine contract, of which $2 million was to be delivered in the fourth quarter, with the rest due for delivery in the first half of 2009. In a statement, the company said that the Peregrine news “will affect our production planning for the rest of this fiscal year and into next year.”

The company also seemed to make some vague threats of a lawsuit, reporting that it is “in the process of evaluating all options related to the customer’s contract obligations.”

RBCN today has plunged $1.97, or 35.6%, to $3.57.