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This interview is a small excerpt from a comprehensive interview published in The Wall Street Transcript as part of the Technology Sector, available at (001-212-952-7433) or http://www.twst.com/sectors/techno.html

TWST: Could you start by providing a brief introduction to AIXTRON?

Mr. Schindelhauer: AIXTRON is active in the compound semiconductor markets. The compound semiconductors are specialty markets not to be confused with the silicon industry. We are talking about very thin multi-component crystal layers, which have to be synthesized in our machines. We are at the first step of the value chain actually because we enable a lot of different applications such as crystals for light emitting diodes which you see in traffic lights, break lights on cars, big boulevards like NASDAQ in New York and so on. There are a huge number of applications. Regarding LEDs we are talking about a revolution in the lighting industry because with those tiny and ultra bright light sources you will have tremendous savings on power and have them for an almost unlimited lifetime. The other applications for compound semiconductor is in the telecom market: in the handsets in wireless communications with a high frequency chip called HBT (Heterojunction Bipolar Transistor), or the optical components for the entire fiber communication network, the laser, detector, amplifiers. Then finally you have the consumer electronics, the lasers, the optical components, for example, in your CD player, your DVD player, in a record reader or laser printer in your office. These are big markets and Aixtron delivers enabling technology and the machinery to create the crystal layers, which again is the first step in the value chain.

TWST: What is the revenue breakdown?

Mr. Schindelhauer: We are roughly 50% for the LED market, 25% for the consumer electronics, and 25% for the data com, telecom market.

TWST: Which of those markets to represents the biggest growth opportunity for you?

Mr. Schindelhauer: Definitely the LED market because today the applications are using more color. Red, green and blue combined gives you white light as seen by the human eye. So that is for the billboard applications. But people are also working having interior white light applications done with LED. There is a lot of examples already and that is a huge market at the end.

TWST: How is your management team structured?

Mr. Schindelhauer: In Germany, we have a two tier system, a supervisory board and the executive board. What we are aiming to be more like a US board system and we are in fact implementing that change in May. So we will have operational responsibilities for the business unit leaders and strategic non-operational responsibilities for the other members.

TWST: How would you describe the corporate culture within the company?

Mr. Schindelhauer: Dr. Holger Juergensen, founder of AIXTRON, and myself we own about 20% of the company. Then we have all employees as partial shareholders shareholder. We have a stock option plan for all employees without exception worldwide and offer stocks to them on an annual basis. Therefore, as the employment with the company increase, so too will their shareholdings. I think therefore they are very committed, loyal, and motivated employees.

TWST: What is you current R&D spend and focus?

Mr. Schindelhauer: We are spending roughly 5-7% of our revenues in R&D. But this R&D is just for development of equipment, we are a pure play. We are following a pure play strategy whereby we are only doing equipment the technology around the equipment. We are not vertically integrated like our competitor EMCORE is doing that for example. We feel that that would bring us into competition with our own customers and we will not do that. Devices research is more or less done at our R&F partners including e.g. NASA Jet Propulsion in US, or Tokyo University or Aachen University. We have a lot of partners around the world. They have special projects and of course our equipment and so there is a win-win situation for us and them. They are focused on specialty items to develop their particular devices.

TWST: You had a 52% increase in revenue last year? What’s the response from the analyst community?

Mr. Schindelhauer: We have a very wide coverage with research from various institutes. I think last year over thirty reports were written from more than 20 different research institutes, banks or brokers. And I mean reports not updates. So I think from that point of view there is good coverage out there and the perception of the results was very positive, but it is not only the revenues. I mean we increased the profits way over proportionally to our revenue.

TWST: What are some of the highlights a potential investor on the balance sheet should look at?

Mr. Schindelhauer: I think that we have a strong cash position. At the end of the year, we had over 90 million Euros in cash. We have no debt. We have a return on sales after tax of 14%, with a return on equity on 22% and a high ratio of 60%. I think these are probably the highlights of the balance sheet.

TWST: Where would you like to see the company five years from now?

Mr. Schindelhauer: I think we should maintain and strengthen our technology leadership in the various fields. We will invest heavily in new product application within our core know-how like ferroelectric and dielectrics. They are markets for the silicon industry, next generations of the DRAM (4Gbit) and FeRAMs for example. We will be heavily involved in so called organic LEDs, for the replacement of the LCD displays. Also adding new markets to our portfolio – a very diversified environment where Aixtron with the core enabling technology will hopefully have a very strong position.