10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark one)

x Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2012

or

¨ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from              to             

Commission file number 001-33834

RUBICON TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	36-4419301
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
900 East Green Street Bensenville, Illinois	60106
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (847) 295-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of May 4, 2012 the Registrant had 22,533,608 shares of common stock, par value $0.001 per share, outstanding.

RUBICON TECHNOLOGY, INC.

Quarterly Report on Form 10-Q

For the quarterly period ended March 31, 2012

TABLE OF CONTENTS

			Page
Part I		Financial Information		2
	Item 1.	Consolidated Financial Statements (unaudited)		2
		Consolidated Balance Sheets (unaudited) – March 31, 2012 and December 31, 2011		2
		Consolidated Statements of Operations (unaudited) – Three months ended March 31, 2012 and 2011		3
		Consolidated Statements of Comprehensive Income (unaudited) – Three months ended March 31, 2012 and 2011		4
		Consolidated Statements of Cash Flows (unaudited) – Three months ended March 31, 2012 and 2011		5
		Notes to Consolidated Financial Statements (unaudited)		6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
	Item 4.	Controls and Procedures		22
Part II		Other Information		23
	Item 1.	Legal Proceedings		23
	Item 1A.	Risk Factors		23
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		23
	Item 3.	Defaults Upon Senior Securities		23
	Item 4.	Mine Safety Disclosures		23
	Item 5.	Other Information		23
	Item 6.	Exhibits		23
Signatures				24
Exhibit Index				25

1

PART I FINANCIAL INFORMATION

ITEM 1. Consolidated Financial Statements

Rubicon Technology, Inc.

Consolidated balance sheets

	March 31, 2012			December 31, 2011
	(unaudited) (in thousands other than share data)
Assets
Cash and cash equivalents	$	14,571		$	4,290
Restricted cash		146			189
Short-term investments		40,398			50,528
Accounts receivable, net		8,390			30,655
Accounts receivable, related parties		3,902			1,989
Inventories, net		32,510			22,823
Other inventory supplies		15,752			17,613
Prepaid expenses and other current assets		1,911			4,491
Deferred tax assets		3,078			3,078
Total current assets		120,658			135,656
Property and equipment, net		122,560			120,931
Investments		2,000			2,000
Other assets		1,312			1,365
Total assets	$	246,530		$	259,952
Liabilities and stockholders’ equity
Accounts payable	$	6,213		$	12,831
Accrued payroll		687			1,578
Accrued and other current liabilities		1,185			1,570
Corporate income and franchise taxes		303			612
Advance payments		414			9
Total current liabilities		8,802			16,600
Deferred tax liability		12,327			15,121
Total liabilities		21,129			31,721
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.001 par value, 5,000,000 undesignated shares authorized, no shares issued or outstanding		—			—
Common stock, $0.001 par value, 45,000,000 shares authorized and 24,308,318 and 24,289,723 shares issued; 22,533,474 and 22,514,879 shares outstanding		24			24
Additional paid-in capital		332,617			332,119
Treasury stock, at cost, 1,774,844 shares		(12,148	)		(12,148	)
Accumulated other comprehensive loss		(11	)		(50	)
Accumulated deficit		(95,081	)		(91,714	)
Total stockholders’ equity		225,401			228,231
Total liabilities and stockholders’ equity	$	246,530		$	259,952

The accompanying notes are an integral part of these consolidated statements.

2

Rubicon Technology, Inc.

Consolidated statements of operations

	Three months ended March 31,
	2012			2011
	(unaudited) (in thousands, other than share and per share data)
Revenue	$	10,207		$	37,970
Cost of goods sold		13,615			13,995
Gross profit (loss)		(3,408	)		23,975
Operating expenses:
General and administrative		2,306			2,921
Sales and marketing		456			377
Research and development		476			427
Income (loss) from operations		(6,646	)		20,250
Other income:
Interest income		33			87
Realized gain (loss) on foreign currency translation		342			(6	)
Total other income		375			81
Income (loss) before income taxes		(6,271	)		20,331
Income tax benefit (expense)		2,904			(1,227	)
Net income (loss)	$	(3,367	)	$	19,104
Net income (loss) per common share
Basic	$	(0.15	)	$	0.83
Diluted	$	(0.15	)	$	0.80
Weighted average common shares outstanding used in computing net income (loss) per common share
Basic		22,514,539			22,993,614
Diluted		22,514,539			23,943,644

The accompanying notes are an integral part of these consolidated statements.

3

Rubicon Technology, Inc.

Consolidated statements of comprehensive income

	Three months ended March 31,
	2012			2011
	(unaudited) (in thousands)
Net income (loss)	$	(3,367	)	$	19,104
Other comprehensive income:
Unrealized gain (loss) on investments, net of tax		42			(22	)
Unrealized gain (loss) on currency translation		(3	)		(1	)
Other comprehensive income (loss)		39			(23	)
Comprehensive income (loss)	$	(3,406	)	$	19,081

The accompanying notes are an integral part of these consolidated statements.

4

Rubicon Technology, Inc.

Consolidated statements of cash flows

	Three months ended March 31,
	2012			2011
	(unaudited) (in thousands)
Cash flows from operating activities
Net income (loss)	$	(3,367	)	$	19,104
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization		2,941			2,021
Stock-based compensation		494			866
Deferred taxes		(2,794	)		—
Changes in operating assets and liabilities:
Accounts receivable		20,352			(4,039	)
Inventories		(9,431	)		(77	)
Other inventory supplies		1,996			(1,450	)
Prepaid expenses and other assets		2,634			(255	)
Accounts payable		(6,731	)		(3,433	)
Accrued payroll		(900	)		(1,699	)
Corporate income and franchise taxes		(299	)		950
Advanced payments		405			1,799
Accrued and other current liabilities		(406	)		2,446
Net cash provided by operating activities		4,894			16,233
Cash flows from investing activities
Purchases of property and equipment		(4,570	)		(11,083	)
Purchases of investments		(628	)		—
Proceeds from sale of investments		10,800			737
Net cash provided by (used in) investing activities		5,602			(10,346	)
Cash flows from financing activities
Proceeds from exercise of options		4			736
Restricted cash		43			(8	)
Net cash provided by financing activities		47			728
Net effect of currency translation		(262	)		(25	)
Net increase in cash and cash equivalents		10,281			6,590
Cash and cash equivalents, beginning of period		4,290			16,073
Cash and cash equivalents, end of period	$	14,571		$	22,663
Supplemental disclosures of non-cash transactions
Unrealized (gain) loss on investments	$	(42	)	$	22

The accompanying notes are an integral part of these consolidated statements.

5

Rubicon Technology, Inc.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2012

1. BASIS OF PRESENTATION

Interim financial data

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements and should be read in conjunction with Rubicon Technology, Inc.’s (the “Company”) annual report filed on Form 10-K for the fiscal year ended December 31, 2011. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the results of operations have been included. Consolidated operating results for the three months period ended March 31, 2012 are not necessarily indicative of results that may be expected for the year ending December 31, 2012.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Rubicon Worldwide LLC and Rubicon Sapphire Technology (Malaysia) SDN BHD. All intercompany transactions and balances have been eliminated in consolidation.

Foreign currency translation and transactions

Rubicon Worldwide LLC’s assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates and capital accounts at historical exchange rates. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. Translation adjustments resulting from fluctuations in exchange rates for Rubicon Worldwide LLC are recorded as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity.

The Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon Sapphire Technology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Non-monetary assets are translated at historical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for Rubicon Sapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. The Company records these gains and losses in other income (expense).

Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other than the functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination of net income (loss) for the period. The Company records these gains and losses in other income (expense).

Investments

The Company invests available cash primarily in investment grade commercial paper, corporate notes and government securities. Investments classified as available-for-sale securities are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the consolidated statement of operations. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations, are classified as short-term.

The Company reviews its available-for-sale securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the consolidated statement of operations. As of March 31, 2012, no impairment was recorded.

The Company’s long-term investment is accounted for as a cost method investment and is adjusted as needed based on a review of the investment’s financial position.

6

Accounts receivable

The majority of the Company’s accounts receivable is due from manufacturers serving the LED and SoS industries. Credit is extended based on an evaluation of the customer’s financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts.

Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time past due, the customer’s current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible, and payments subsequently received on such receivables are recorded as a reduction to bad debt expense.

The following table shows the activity of the allowance for doubtful accounts:

	March 31, 2012			December 31, 2011
	(in thousands)
Beginning balance	$	378		$	194
Charges to costs and expenses		(204	)		1,873
Accounts charged off, less recoveries		—			(1,689	)
Ending balance	$	174		$	378

Inventories

Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method, and includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other information. Inventories are composed of the following:

	March 31, 2012		December 31, 2011
	(in thousands)
Raw materials	$	12,765	$	7,835
Work in progress		14,367		9,776
Finished goods		5,378		5,212
	$	32,510	$	22,823

Property and equipment

Property and equipment consisted of the following:

	March 31, 2012			December 31, 2011
	(in thousands)
Land and land improvements	$	4,123		$	2,540
Buildings		27,076			26,915
Machinery, equipment and tooling		99,201			98,276
Leasehold improvements		7,712			7,712
Furniture and fixtures		941			834
Information systems		986			954
Construction in progress		19,289			17,530
Total cost		159,328			154,761
Accumulated depreciation and amortization		(36,768	)		(33,830	)
Property and equipment, net	$	122,560		$	120,931

7

Revenue recognition

The Company recognizes revenue from product sales when earned. Revenue is recognized when, and if, evidence of an arrangement is obtained and the other criteria to support revenue recognition are met, including:

• Persuasive evidence of an arrangement exists. The Company requires evidence of a purchase order with the customer specifying the terms and specifications of the product to be delivered, typically in the form of a signed quotation or purchase order from the customer.

• Title has passed and the product has been delivered. Title passage and product delivery generally occur when the product is delivered to a common carrier.

• The price is fixed or determinable. All terms are fixed in the signed quotation or purchase order received from the customer. The purchase orders do not contain rights of cancellation, return, exchange or refund.

• Collection of the resulting receivable is reasonably assured. The Company’s standard arrangement with customers includes payment terms. Customers are subject to a credit review process that evaluates each customer’s financial position and its ability to pay. Collectability is determined by considering the length of time the customer has been in business and its history of collections. If it is determined that collection is not probable, no product is shipped and no revenue is recognized unless cash is received in advance.

The Company does not provide maintenance or other services and it does not have sales that involve multiple elements or deliverables.

Net income per common share

Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares outstanding any common stock equivalents, outstanding stock options and warrants based on the treasury stock method.

Diluted net loss per share is the same as basic net loss per share for the three months ended March 31, 2012 because the effects of potentially dilutive securities are anti-dilutive.

At March 31, 2012, the Company had the following anti-dilutive securities outstanding which were excluded from the calculation of diluted net loss per share:

	March 31, 2012
Warrants		172,886
Stock options		360,376
		533,262

Comprehensive income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive income (loss) includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the three months ended March 31, 2012 and 2011, other comprehensive income (loss) includes the unrealized loss on investments and foreign currency translation adjustments.

	March 31, 2012			December 31, 2011
	(in thousands)
Beginning Balance	$	(50	)	$	(10	)
Unrealized gain (loss) on investments		42			(42	)
Unrealized gain (loss) on currency translation		(3	)		2
Ending Balance	$	(11	)	$	(50	)

8

Recent accounting pronouncements

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income,” (“ASU 2011-05”) which eliminated the option to present comprehensive income and its components in the statement of equity. The Company has adopted the requirements of ASU 2011-05 effective January 1, 2012.

Reclassifications

Certain prior period amounts on the balance sheet have been reclassified to conform to the current period presentation.

3. SEGMENT INFORMATION

The Company evaluates operations as one reportable segment, as it only reports profit and loss information on an aggregate basis to its chief operating decision maker.

Revenue is attributed by geographic region based on ship-to location of the Company’s customers. The following table summarizes revenue by geographic region:

	Three months ended March 31,
	2012		2011
	(in thousands)
France	$	2,751	$	111
United States		2,125		1,915
Taiwan		1,693		23,442
Australia		1,116		—
Japan		267		3,640
Korea		—		7,413
Other		2,255		1,449
Revenue	$	10,207	$	37,970

The following table summarizes revenue by product type:

	Three months ended March 31,
	2012		2011
	(in thousands)
Core	$	2,758	$	27,573
Polished		5,681		8,912
Optical		1,759		1,465
Other		9		20
Revenue	$	10,207	$	37,970

The following table summarizes assets by geographic region:

	March 31, 2012		December 31, 2011
	(in thousands)
United States	$	212,031	$	223,430
Malaysia		34,471		36,492
Japan		28		30
Total Assets	$	246,530	$	259,952

4. INVESTMENTS

The Company invests available cash primarily in investment grade commercial paper, corporate notes and government securities. The Company’s short-term investments balance of $40.4 million as of March 31, 2012 is comprised of U.S. Treasury securities of $2.5 million, corporate notes and bonds of $12.9 million and commercial paper of $25.0 million. The Company’s investments are classified as available-for-sale securities and are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive income (loss).

9

The Company’s long-term investment at March 31, 2012 consists of a $2.0 million investment in Peregrine Semiconductor, Corp. (a customer) Series D-1 Preferred shares and is accounted for as a cost method investment. The value is adjusted for impairment based on review of Peregrine’s financial position. No impairment was noted as of March 31, 2012.

The following table presents the amortized cost and gross unrealized gains and losses on all securities at March 31, 2012:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Short-term Investments:
U.S. Treasury securities and agency (taxable)	$	2,500	$	—	$	—	$	2,500
Corporate Notes and Bonds (taxable)		12,909		—		4		12,905
Commercial Paper (taxable)		24,996		—		3		24,993
Total short-term investments	$	40,405	$	—	$	7	$	40,398
Long-term Investments:
Peregrine Semiconductor, Corp. Series D-1 Preferred shares	$	2,000	$	—	$	—	$	2,000

The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2011:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Short-term Investments:
U.S. Treasury securities and agency (taxable)	$	4,500	$	—	$	—	$	4,500
Corporate Notes/Bonds (taxable)		37,085		—		37		37,048
Commercial Paper (taxable)		8,992		—		12		8,980
Total short-term investments	$	50,577	$	—	$	49	$	50,528
Long-term Investments:
Peregrine Semiconductor, Corp. Series D-1 Preferred shares	$	2,000	$	—	$	—	$	2,000

The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard below describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s fixed income available-for-sale securities consist of high quality, investment grade commercial paper, corporate notes and government securities. The Company values these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company’s financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques.

10

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2012:

	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash Equivalents:
Money market funds	$	5,243	$	—	$	—	$	5,243
Investments:
Available-for-sales securities—current
U.S. Treasury securities and agency		—		2,500		—		2,500
Corporate notes/bonds		—		12,905		—		12,905
Commercial paper		—		24,993		—		24,993
Total	$	5,243	$	40,398	$	—	$	45,641

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of December 31, 2011:

	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash Equivalents:
Money market funds	$	839	$	—	$	—	$	839
Investments:
Available-for-sales securities—current:
U.S. Treasury securities and agency		—		4,500		—		4,500
Corporate notes/bonds		—		37,048		—		37,048
Commercial paper		—		8,980		—		8,980
Total	$	839	$	50,528	$	—	$	51,367

In addition to the debt securities noted above, the Company had approximately $9.3 million and $3.5 million of time deposits included in cash and cash equivalents as of March 31, 2012 and December 31, 2011, respectively.

5. RELATED PARTY TRANSACTIONS

In November 2008, the Company purchased 1,345,444 shares of Peregrine Series D-1 Preferred shares for a total of $2.0 million, which represents less than 1% of Peregrine’s shares outstanding. The terms and stock price of the purchase were the same as for the other investors who participated. Peregrine is a customer of the Company. For the three months ended March 31, 2012 and 2011, revenue from Peregrine was $4.6 million and $105,000, respectively. As of March 31, 2012 and December 31, 2011, accounts receivable from Peregrine were $3.9 million and $2.0 million, respectively.

6. SIGNIFICANT CUSTOMERS

For the three months ended March 31, 2012, the Company had two customers that individually accounted for approximately 45% and 10% of revenue, respectively, and for the three months ended March 31, 2011, the Company had three customers that individually accounted for approximately 30%, 20%, and 18% of revenue, respectively.

Customers individually representing more than 10% of trade receivables accounted for approximately 73% and 89% of accounts receivable as of March 31, 2012 and December 31, 2011, respectively. The Company grants credit to customers based on an evaluation of their financial condition. Losses from credit sales are provided for in the financial statements.

7. STOCKHOLDERS’ EQUITY

Common Stock

As of March 31, 2012 the Company had reserved 2,091,079 shares of common stock for issuance upon the exercise of outstanding common stock options. Also, 2,243,279 shares of the Company’s common stock were reserved for future grants of stock options (or other similar equity instruments) under the Company’s 2007 Stock Incentive Plan (the “2007 Plan”) as of March 31, 2012. In addition, 281,561 shares of the Company’s common stock were reserved for future exercise of outstanding warrants as of March 31, 2012.

11

Warrants

For the three months ended March 31, 2012, no common stock warrants were exercised. At March 31, 2012 and December 31, 2011, there were 281,561 common stock warrants outstanding.

Treasury Stock

On August 4, 2011, the Company authorized a stock repurchase program to purchase up to $25.0 million of its common stock over a period of two years. The stock repurchase program authorizes the Company to repurchase its shares of common stock in the open market at times and prices considered appropriate by the Company depending upon prevailing market conditions and other corporate considerations. The treasury shares are accounted for using the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. The Company did not repurchase any shares during the three months ended March 31, 2012.

8. STOCK INCENTIVE PLANS

The Company sponsored a stock option plan, the 2001 Plan, which allowed for the granting of incentive and nonqualified stock options for the purchase of common stock. The maximum number of shares that may be awarded or sold under the 2001 Plan was 1,449,667 shares. Each option entitles the holder to purchase one share of common stock at the specified option exercise price. The exercise price of each incentive stock option granted must not be less than the fair market value on the grant date. At the discretion of management and with the approval of the Board of Directors, the Company granted options under the 2001 Plan. Management and the Board of Directors determined vesting periods and expiration dates at the time of the grant. On August 2, 2011, the plan expired.

In August 2007, the Company adopted the 2007 Plan, which allows for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and bonus shares. On June 22, 2011, the shareholders of the Company approved an amendment to the 2007 Plan to increase the maximum number of shares that may be awarded or sold under the 2007 Plan by 2,100,000 from 2,307,692 to 4,407,692 shares. The Board of Directors has appointed a committee to administer the plan. The plan committee determines the type of award to be granted, the fair market value, the number of shares covered by the award, and the time when the award vests and may be exercised.

The Company uses the Black-Scholes option pricing model to value stock options issued after January 1, 2006. The Company uses historical stock prices of companies that it considers as a peer group as the basis for its volatility assumptions. The assumed risk-free rates were based on U.S. Treasury rates in effect at the time of grant with a term consistent with the expected option lives. The expected term is based upon the vesting term of the Company’s options, a review of a peer group of companies, and expected exercise behavior. The forfeiture rate is based on past history of forfeited options. The expense is being allocated using the straight-line method. For the three months ended March 31, 2012 and 2011, the Company recorded $453,000 and $822,000, respectively, of stock compensation expense. As of March 31, 2012, the Company has $4.5 million of total unrecognized compensation cost related to non-vested awards granted under the Company’s stock-based plans that it expects to recognize over a weighted-average period of 2.61 years. The Company accounts for options issued prior to January 1, 2006 under the intrinsic value method.

The following table summarizes the activity of the stock incentive and equity plans as of March 31, 2012 and changes during the three months then ended:

	Shares available for grant			Number of options outstanding			Weighted- average option exercise price		Number of restricted stock and board shares issued
At December 31, 2011		2,259,999			2,093,108		$	13.45		42,587
Granted		(25,845	)		8,500			9.39		17,345
Exercised		—			(1,250	)		4.01		—
Cancelled/forfeited		9,125			(9,279	)		18.05		—
At March 31, 2012		2,243,279			2,091,079		$	13.42		59,932

The Company’s aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock. Based on the fair market value of the common stock at March 31, 2012, there is no intrinsic value for options outstanding and exercisable. The weighted average fair value per share of options granted for the three months ended March 31, 2012 was $9.39 and the fair value of each option grant was estimated at the date of grant using the Black-Scholes option pricing model using an expected term of 5.3 years, risk-free interest rates of 0.83% expected volatility of 52% and no dividend yield. The Company used an expected forfeiture rate of 16.59%.

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For the three months ended March 31, 2012 and 2011, the Company recorded $41,000 and $43,000, respectively, of stock compensation expense related to restricted stock.

A summary of the Company’s non-vested options during the three months period ended March 31, 2012 is presented below:

	Options			Weighted- average exercise price
Non-vested at January 1, 2012		1,313,177		$	15.42
Granted		8,500			9.39
Vested		(337,475	)		12.28
Forfeited		(8,875	)		18.14
Non-vested at March 31, 2012		975,327		$	16.44

An analysis of restricted stock issued is as follows:

Non-vested restricted stock as of December 31, 2011	1,931
Granted	17,345
Vested	(1,931	)
Non-vested restricted stock as of March 31, 2012	17,345

9. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

The Company has entered into agreements to purchase equipment and components to construct furnaces. These agreements will result in the Company purchasing equipment or components for a total cost of approximately $4.8 million with deliveries occurring through August 2012. The Company has also entered into agreements related to the development of our facilities for a total cost of approximately $54,000.

Litigation

From time to time, the Company experiences routine litigation in the normal course of its business. The management of the Company does not believe any pending litigation will have a material adverse effect on the financial condition or results of operations of the Company.

10. INCOME TAXES

The Company is subject to income taxes in the U.S. and Malaysia. In accordance with the provisions of ASC Topic 740 “Income Taxes”, the Company assesses on a quarterly basis its ability to realize its deferred tax assets. The tax provision for the three months ended March 31, 2012 is based on an estimated combined statutory effective tax rate. The Company recorded for the three months ended March 31, 2012 and 2011, a tax benefit of $2.9 million and a tax expense of $1.2 million, respectively for an effective tax rate of 46.3% and 6.1%, respectively. For the three months ended March 31, 2012 the difference between the Company’s effective tax rate and the U.S. federal 35% statutory rate and state 6.2% (net of federal benefit) statutory rate was primarily related to small profits recorded in the Malaysia operation for which the Company has a tax holiday and the reversal of a tax accrual for an uncertain tax position. For the three months ended March 31, 2011, the Company was subject only to state taxes due to a full valuation allowance and the Illinois State Legislature suspension of the use of NOLs.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

All statements, other than statements of historical facts, included in this Quarterly Report on Form 10-Q regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, results of operations, financial position, net sales, projected costs, prospects and plans and objectives of management for future operations may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward looking statements can be identified by the use of terms and phrases such as “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions such as “will,” “may,” “could,” “should,” etc. (or the negative thereof). Items contemplating or making assumptions about actual or potential future sales, market size and trends or operating results also constitute forward-looking statements.

Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Before investing in our common stock, investors should be aware that the occurrence of the risks, uncertainties and events described in the section entitled “Risk Factors” in our Annual Report on Form 10-K and elsewhere in this Quarterly Report could have a material adverse effect on our business, results of operations and financial condition.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, forward-looking statements are inherently subject to known and unknown business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Quarterly Report, other than as may be required by applicable law or regulation. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.

You should read this Quarterly Report, the documents that we reference in this Quarterly Report and have filed with the SEC as exhibits and our Annual Report on Form 10-K for the year ended December 31, 2011 with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

Unless otherwise indicated, the terms “Rubicon,” the “Company,” “we,” “us,” and “our” refer to Rubicon Technology, Inc.

OVERVIEW

We are an advanced electronic materials provider that develops, manufactures and sells monocrystalline sapphire and other innovative crystalline products for Light-Emitting Diodes (“LEDs”), radio frequency integrated circuits (“RFICs”), blue laser diodes, optoelectronics and other optical applications. The emergence of sapphire in commercial volumes at competitive prices has enabled the development of new technologies such as high brightness (“HB”) white, blue and green LEDs and highly-integrated RFICs. We apply our proprietary crystal growth technology to produce high-quality sapphire products efficiently to supply our end-markets, and we work closely with our customers to meet their quality and delivery needs.

We are a vertically-integrated manufacturer of high-quality sapphire substrates and optical windows that are used in a variety of high-growth, high-volume end-market applications. Our largest product line is two inch to six inch sapphire cores and wafers for use in LEDs and blue laser diodes for solid state lighting and electronic applications. For the LED market, we sell two inch to four inch material primarily in core form and six and eight inch material primarily in polished wafer form. Eight inch wafers are sold primarily for research and development efforts at this time. In addition, we sell six inch sapphire wafers that are used for Silicon-on-Sapphire (“SoS”) RFICs, as well as products for aerospace, sensor and other applications. We have also extended our technology, which gives us the ability to produce cores and wafers of up to twelve inches in diameter to support next-generation LED and RFIC production. In addition, we have developed the ability to produce large diameter circular and rectangular sapphire windows for use in various optical window applications.

Our revenue consists of sales of sapphire materials sold in core and polished wafer forms in two, three, four, six and eight inch diameters as well as optical materials sold as blanks or polished windows. Products are made to varying specifications, such as crystal planar orientations and thicknesses.

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Historically, a significant portion of our revenue has been derived from sales to relatively few customers. For the three months ended March 31, 2012, we had two customers that together accounted for approximately 55% of our revenue, and for the three months ended March 31, 2011, we had three customers that together accounted for approximately 68% of our revenue. Other than as discussed above, none of our customers accounted for more than 10% of our revenue for such periods. Although we are continuing to diversify and expand our customer base, we expect our revenue to continue to be concentrated among a small number of customers. We expect that our significant customers may change from period to period.

We recognize revenue upon shipment to our customers. We derive a significant portion of our revenue from customers outside of the U.S. In most periods, the majority of our sales are to the Asian market and we expect that region to continue to be a major source of revenue for us. All of our revenue is denominated in U.S. dollars.

We manufacture and ship our products from our facilities in the Chicago metropolitan area and from our facility in Penang, Malaysia. We have approximately 237,000 square feet of manufacturing and office space in Batavia, Franklin Park and Bensenville, Illinois and a 65,000 square foot facility in Penang, Malaysia, which processes sapphire grown by us in our Illinois facilities into finished cores and wafers. Our Malaysia facility currently finishes the majority of our core processing and produces production volumes of polished wafers. In March 2012, we acquired additional land in Batavia, Illinois to expand our crystal growth capacity. We have not yet determined when we will begin construction on this facility.

Our cost of goods sold consists primarily of manufacturing materials, labor, manufacturing-related overhead such as utilities, depreciation and rent, provisions for excess and obsolete inventory reserves, freight and warranties. We manufacture our products at our Illinois and Malaysia manufacturing facilities based on customer orders. We purchase materials and supplies to support such current and expected future demand. We are subject to variations in the cost of raw materials and consumables from period to period because we do not have long-term fixed-price agreements with most of our suppliers.

Our operating expenses are comprised of sales and marketing, research and development (“R&D”), and general and administrative (“G&A”) expenses. G&A expenses consist primarily of salaries and associated costs for employees in finance, human resources, information technology and administrative activities, charges for accounting, legal, and insurance fees, and stock-based compensation. The majority of our stock-based compensation relates to administrative personnel and is accounted for as a G&A expense.

Other income (expense) consists of interest income and realized gains and losses on investments and currency translation.

We account for income taxes under the asset and liability method whereby the expected future tax consequences of temporary differences between the book value and the tax basis of assets and liabilities are recognized as deferred tax assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to be recognized. At December 31, 2011, we had federal and state net operating loss carryforwards (“NOLs”) of $22.0 million and $42.0 million, respectively. We have updated our analysis of ownership changes that limit the utilization of the NOLs. This analysis shows an ownership change, but we believe that we are not restricted in our ability to use the full amount of the NOLs. A full valuation allowance was provided and no tax benefit was recorded until we could conclude that it is more likely than not that our deferred tax assets will be realized. During the six months ended June 30, 2011, we concluded that based on the current level of sustainable profitability that generates taxable income, it is more likely than not that our deferred tax assets will be realizable. With the release of the valuation allowance, we began recording federal and certain state and non-U.S. income taxes attributable to the fiscal year’s pre-tax income. The Illinois State Legislature has suspended the use of NOLs for taxable years ending after December 31, 2010 and before December 31, 2014 and has increased the corporate income tax rate which unfavorably impacts our effective tax rate. Our effective tax rate could fluctuate significantly on a quarterly basis and could be adversely affected to the extent earnings are lower than anticipated. Our effective tax rate could also fluctuate due to changes in the valuation of our deferred tax assets or liabilities, or by changes in tax laws, regulations, or accounting principles, as well as certain discrete items.

We anticipate our capital expenditures will be between $25 million to $30 million for the full year 2012. These expenditures will be primarily for purchases of equipment for our Malaysia facility, our raw material processing and new product development. Our capital expenditures in the three months ended March 31, 2012 were $4.6 million.

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RESULTS OF CONSOLIDATED OPERATIONS THREE MONTHS ENDED March 31, 2012 AND 2011

The following table sets forth our consolidated statements of operations for the periods indicated:

	Three months ended March 31,
	2012			2011
	(in millions)
Revenue	$	10.2		$	38.0
Cost of goods sold		13.6			14.0
Gross profit (loss)		(3.4	)		24.0
Operating expenses:
General and administrative		2.3			2.9
Sales and marketing		0.5			0.4
Research and development		0.5			0.4
Total operating expenses		3.3			3.7
Income (loss) from operations		(6.7	)		20.3
Other income (expense)		0.4			—
Income (loss) before income taxes		(6.3	)		20.3
Income tax benefit (expense)		2.9			1.2
Net income (loss)	$	(3.4	)	$	19.1

The following table sets forth our consolidated statements of operations as a percentage of revenue for the periods indicated:

	Three months ended March 31,
	2012			2011
	(percentage of total)
Revenue		100	%		100	%
Cost of goods sold		134			37
Gross profit (loss)		(34	)		63
Operating expenses:
General and administrative		22			8
Sales and marketing		5			1
Research and development		5			1
Total operating expenses		32			10
Income (loss) from operations		(66	)		53
Other income (expense)		4			—
Income (loss) before income taxes		(62	)		53
Income tax benefit (expense)		29			3
Net income (loss)		(33	)%		50	%

Revenue. Revenue was $10.2 million for the three months ended March 31, 2012 and $38.0 million for the three months ended March 31, 2011, a decrease of $27.8 million due to excess inventory in the LED supply chain. We experienced a decrease in revenue from our products sold into the LED market. Revenue from the sale of core products for the three months ended March 31, 2012 decreased by $24.8 million, of which $14.7 million was attributed to lower pricing and $10.1 million was due to decreased volume, as a result of reduced demand. We also experienced lower revenue from sales of our polished wafers by $3.2 million which was the result of $7.6 million lower sales of polished wafers to the LED market offset in part by a $4.4 million increase in polished wafers sold to the SoS market. We had no sales of polished wafers to our largest LED customer for the three months ended March 31, 2012 as that customer had an excess of sapphire wafers. Based on our new agreement with this customer, we expect orders to resume in June of this year. Of the $3.2 million reduction in revenue from polished wafers, $207,000 was attributable to lower volume and $3.0 million was attributable to lower prices. We also had higher revenue of $295,000 from optical products due to increased sales of sapphire for sensor and instrumentation applications. While demand for our core products has improved from quarter four 2011, pricing remains low. We expect pricing to slowly recover throughout 2012. We have continued to experience limited demand for our LED polished wafers, but expect that to improve in the second half of 2012. However, we operate in an extremely volatile market, so the amount of price or volume change is difficult to predict.

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Gross profit. Gross (loss) profit was $(3.4) million for the three months ended March 31, 2012 compared to $24.0 million for the three months ended March 31, 2011, a decrease of $27.4 million. The decrease in gross profit is primarily attributable to decreased pricing for our products as well as lower sales volumes which is attributable to the reduced demand from the LED market due to the buildup of excess inventory in the supply chain. We also incurred unusually high scrap rates in the three months ended March 31, 2012 which increased our cost of goods sold. This higher than normal scrap rate was primarily associated with bringing wafers produced prior to signing a new customer contract to the revised specifications called for under the new contract with that customer. Production of new wafers under this contract is not expected to generate above normal scrap as the customer specifications are within standard process capabilities. In addition, due to the lower demand, we were not operating at capacity and recorded costs associated with under utilization of equipment and staff of $1.1 million as an expense.

General and administrative expenses. G&A expenses were $2.3 million for the three months ended March 31, 2012 and $2.9 million for the three months ended March 31, 2011, a decrease of $615,000. The decrease was primarily due to $561,000 from lower employee compensation costs including salary and stock based compensation expense, $288,000 from lower bad debt expense as a result of several large collections that significantly decreased our receivables balance, and $71,000 due to lower audit and tax consulting expenses attributed to the timing of billing. These decreases were partially offset by an increase of $271,000 in legal and other consulting expenses.

Sales and marketing expenses. Sales and marketing expenses were $456,000 for the three months ended March 31, 2012 and $377,000 for the three months ended March 31, 2011, an increase of $79,000. The increase in sales and marketing expenses is primarily attributable to increased costs for marketing services and exhibitions of $43,000, additional employee compensation costs of $19,000 and increased travel expenses of $22,000.

Research and development expenses. R&D expenses were $476,000 for the three months ended March 31, 2012 and $427,000 for the three months ended March 31, 2011, an increase of $49,000. The increase is attributable to higher employee compensation costs of $80,000 due to an increase in headcount and increased travel expenses of $20,000. These increases were partially offset by a decrease of $52,000 in spending on research projects.

Other income. Other income was $375,000 for the three months ended March 31, 2012 and $81,000 for the three months ended March 31, 2011, an increase in net other income of $294,000. The increase was primarily due to an increase in foreign currency translation gains of $348,000 partially offset by a lower interest income of $54,000 on lower interest rates.

Income tax expenses. Income tax benefit was $2.9 million for the three months ended March 31, 2012 and income tax expense was $1.2 million for the three months ended March 31, 2011, a decrease of our income tax expense of $4.1 million. Our effective tax rate was 46.3% and 6.1% for the three months ended March 31, 2012 and 2011, respectively. For the three months ended March 31, 2012, the tax provision is based on an estimated statutory effective tax rate. For the three months ended March 31, 2011, we were subject only to state taxes due to a full valuation allowance and the Illinois State Legislature suspension of the use of NOLs. To the extent full year pretax income varies from the end of the most recent interim period, the actual tax provision recognized in 2012 could be different than the tax provision for the three months ended March 31, 2012.

LIQUIDITY AND CAPITAL RESOURCES

We have historically funded our operations using a combination of issuances of common stock and cash generated from our operations.

As of March 31, 2012, we had cash and short term investments totaling $55.0 million, including cash of $9.3 million held in deposits at major banks, $5.2 million invested in money market funds and $40.5 million invested in commercial paper, corporate notes and bonds and U.S. treasury securities. Our long term investment consists of a $2.0 million investment in Peregrine Semiconductor, Corp. (one of our customers) Series D1 preferred stock.

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Cash flows from operating activities

The following table represents the major components of our cash flows from operating activities for the three months ended March 31, 2012 and 2011:

	Three months ended March 31,
	2012			2011
	(in millions)
Net income (loss)	$	(3.4	)	$	19.1
Non-cash items:
Depreciation and amortization		2.9			2.0
Stock based compensation and other, net		0.5			0.9
Deferred taxes		(2.8	)		—
Total non-cash items:		0.6			2.9
Working capital:
Accounts receivable		20.3			(4.0	)
Inventories		(9.4	)		(0.1	)
Prepaid expenses and other current assets		4.7			(1.7	)
Accounts payable		(6.7	)		(3.5	)
Other accruals		(1.2	)		3.5
Total working capital items:		7.7			(5.8	)
Net cash provided by operating activities	$	4.9		$	16.2

Cash provided by operating activities was $4.9 million for the three months ended March 31, 2012. During such period, we generated net loss of $(3.4) million, incurred non-cash expenses of $641,000, and net working capital change of $7.7 million. The net working capital change was comprised of a decrease in accounts receivable of $20.3 million due to significant collections from several customers, a decrease in prepaid expenses of $4.7 million primarily due to a decrease in purchases of furnace construction and replacement parts and items used in the polishing of wafers, an increase in inventory of $9.4 million primarily due to an increase in our stock of raw material and sapphire boules, a decrease in accounts payable of $6.7 million due to timing of payments and a decrease in other accruals of $1.2 million.

Cash provided by operating activities was $16.2 million for the three months ended March 31, 2011. During such period, we generated net income of $19.1 million, incurred non-cash expenses of $2.9 million, and net working capital change of $5.8 million. The net working capital change was comprised of an increase in accounts receivable of $4.0 million due to higher sales volumes, a decrease in accounts payable of $3.5 million due to timing of payments, an increase in other accruals of $3.5 million consisting primarily of an increase in advance customer payments of $1.8 million and an establishment of an accrual for income taxes of $1.2 million, and an increase in prepaid expenses of $1.7 million primarily due an overall increase in other inventory supplies on hand to support increased production levels.

Cash flows from investing activities

The following table represents the major components of our cash flows from investing activities for the three months ended March 31, 2012 and 2011:

	Three months ended March 31,
	2012			2011
	(in millions)
Purchases of property and equipment:
Machinery & equipment for crystal growth		(2.4	)		(7.5	)
Land for additional crystal growth facility		(1.7	)		(0.7	)
Increase capacity in other areas		(0.5	)		(2.9	)
Total purchases of property and equipment:		(4.6	)		(11.1	)
Purchases of investments		(0.6	)		—
Proceeds from sales of investments		10.8			0.7
Net cash provided by (used in) investing activities	$	5.6		$	(10.4	)

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Net cash provided by investing activities was $5.6 million for the three months ended March 31, 2012. During the three months ended March 31, 2012, we used approximately $4.6 million on the purchase of land and equipment. This was offset by net proceeds from the sale of investments of $10.2 million.

During the three months ended March 31, 2011, we used approximately $8.2 million toward the equipping of our crystal growth facility in Batavia, Illinois, and approximately $2.0 million on equipping our post crystal growth facility in Penang, Malaysia. We also used $842,000 to upgrade our other facilities in Illinois. This was partially offset by proceeds from the sale of investments of $737,000.

We are continuing to equip our facilities in Malaysia and in March 2012, purchased additional land in Batavia, Illinois for our next crystal growth facility. We have not yet decided on the timing of the construction of this new facility. We also plan on purchasing equipment for our raw material preparation and for new product development. The timing of future capital expenditures on these projects will depend upon our judgment concerning the markets for our product. This timing is difficult to predict but we estimate our total capital expenditures for 2012 to be between $25 million to $30 million.

Cash flows from financing activities

Net cash provided by financing activities was $47,000 and $728,000 for the three months ended March 31, 2012 and 2011, respectively. Net cash provided by financing activities for the three months ended March 31, 2012 represents $4,000 in net proceeds from the exercise of stock options, and $43,000 from a decrease in restricted cash.

Net cash provided by financing activities for the three months ended March 31, 2011 reflects the proceeds from the exercise of stock options of $736,000 partially offset by an increase in restricted cash of $8,000.

Future liquidity requirements

We believe that our existing cash, cash equivalents, investments and anticipated cash flows from operating activities will be sufficient to meet our anticipated cash needs for at least the next twelve months. Our cash needs include cash required to fund our operations, the capital needed to fund our planned expansion in the U.S. and Asia and investments in new product development. If the assumptions underlying our business plan regarding future revenues and expenses change, or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or convertible debt securities. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders could be significantly diluted, and these newly-issued securities may have rights, preferences or privileges senior to those of existing stockholders. If we obtain debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, and the terms of the debt securities issued could impose significant restrictions on our operations. If we are unable to obtain financing on terms favorable to us, we may be unable to successfully execute our business plan.

Contractual obligations

The contractual obligations presented in the table below represent our estimates of future payments under fixed contractual obligations and commitments at March 31, 2012. Changes in our business needs, as well as actions by third parties and other factors, may cause these estimates to change. Because these estimates are complex and necessarily subjective, our actual payments in future periods are likely to vary from those presented in the table. The following table sets forth information relating to our contractual obligations at March 31, 2012:

	Payments due in
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
	(in millions)
Purchase order obligations	$	4.8	$	4.8		—		—		—
Building improvement obligations		0.1		0.1		—		—		—
Total contractual obligations	$	4.9	$	4.9	$	—	$	—	$	—

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We consider to be critical those accounting policies that require our most subjective or complex judgments, which often result from a need to make estimates about the effect of matters that are inherently uncertain, and that are among the most important of our accounting policies in the portrayal of our financial condition and results of operations. We believe the following to be our critical accounting policies, including the more significant estimates and assumptions used in preparation of our financial statements.

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Foreign currency translation and transaction

Rubicon Worldwide LLC’s assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates and capital accounts at historical exchange rates. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. Translation adjustments resulting from fluctuations in exchange rates for Rubicon Worldwide LLC are recorded as a separate component of accumulated other comprehensive income (loss) within stockholders’ equity.

We have determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon Sapphire Technology (Malaysia) SDN BHD’s assets and liabilities are translated into U.S. dollars using the remeasurement method. Non-monetary assets are translated at historical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for Rubicon Sapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. We record these gains and losses in other income (expense).

Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other than our functional currency, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination of net income (loss) for the period. We record these gains and losses in other income (expense).

Revenue recognition

We recognize revenue from sales of products when:

• Persuasive evidence of an arrangement exists. We require evidence of a purchase order with the customer specifying the terms and specifications of the product to be delivered, typically in the form of a signed quotation or purchase order from the customer.

• Title has passed and the product has been delivered. Title passage and product delivery generally occurs when the product is delivered to a common carrier.

• The price is fixed or determinable. All terms are fixed in the signed quotation or purchase order received from the customer. The purchase orders do not contain rights of cancellation, return, exchanges or refunds.

• Collection of the resulting receivable is reasonably assured. Our standard arrangement with customers includes payment terms. Customers are subject to a credit review process that evaluates each customer’s financial position and its ability to pay. We determine collectability by considering the length of time the customer has been in business and our history of collections with that customer. If we determine that collection is not probable, no product is shipped and no revenue is recognized unless cash is received in advance.

All of our revenue is denominated in U.S. dollars.

Inventory valuation

We value our inventory at the lower of cost or market. Market is determined based on net realizable value. Cost for raw materials, work in process and finished goods are based on actual costs on a first-in, first-out basis. We establish inventory reserves when conditions exist that suggest inventory may be in excess of anticipated demand or is obsolete based on customer required specifications. We evaluate the ability to realize the value of our inventory based on a combination of factors, including forecasted sales, estimated current and future market value and changes in customers’ product specifications. Our method of estimating excess and obsolete inventory has remained consistent for all periods presented. However, if our recognition of excess or obsolete inventory is, or if our estimates of our inventory’s potential utility become, less favorable than currently expected, additional inventory reserves may be required. We determine our normal operating capacity and record as expense costs attributable to lower utilization of equipment and staff. For the three months ended March 31, 2012, we determined we were not operating at capacity and recorded as expense costs associated with under utilization of equipment and staff of $1.1 million. Although we expect demand to improve throughout the year, it is likely we will incur more costs due to lower utilization of equipment and staff in 2012.

Investments

We invest available cash primarily in investment grade commercial paper, corporate notes and government securities. Investments classified as available-for-sale securities are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), net in the Consolidated Statement of Operations. Investments in which we have the ability and intent, if necessary, to liquidate in order to support our current operations are classified as short-term. Our long-term investments at March 31, 2012 consist of a $2.0 million investment in Peregrine Semiconductor Corp. (a customer) Series D-1 Preferred shares.

We review our available-for-sale securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. We consider various factors in determining whether an impairment is other-than-temporary,

20

including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, our ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When we conclude that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the Consolidated Statement of Operations. As of March 31, 2012, no impairment was recorded.

Allowance for doubtful accounts

We estimate the allowance for doubtful accounts based on an assessment of the collectability of specific customer accounts. The determination of risk for collection is assessed on a customer-by-customer basis considering our historical experience and future orders with the customer, changes in payment patterns, and recent information we have about the current status of our accounts receivable balances. If we determine that a specific customer is a risk for collection, we provide a specific allowance for credit losses to reduce the net recognized receivable to the amount we reasonably believe will be collected. We believe that, based on the customers to whom we sell and the nature of our agreements with them, our estimates are reasonable. Our method of estimating collectability has remained consistent for all periods presented and with past collections experience.

Stock-based compensation

We expense stock options based upon the fair market value on the date of grant. We use the Black-Scholes option pricing model to determine the fair value of stock options. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model will be affected by assumptions regarding a number of complex and subjective variables. These variables include our expected stock volatility over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rates, forfeitures and expected dividends.

The expected term represents the weighted-average period that our stock options are expected to be outstanding and is based upon the vesting term of our options, a review of a peer group of companies, and expected exercise behavior. Until November 2007, we were operating as a private company, and, as a result, we were unable to use our actual price volatility data. Therefore, we estimate the volatility of our common stock based on volatility of similar entities over the expected term of our stock options. We base the risk-free interest rate that we use in the option pricing model on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. We do not anticipate paying any cash dividends in the foreseeable future and, therefore, use an expected dividend yield of zero in the option pricing model. We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. The current forfeiture rate of 16.59% was based on our past history of forfeitures.

We allocate stock based compensation costs using a straight-line method which amortizes the fair value of each option on a straight-line basis over the service period. Based on the variables affecting the valuation of our common stock and the method used for allocating compensation costs, we recognized $453,000 in stock compensation expense during the three months ended March 31, 2012.

All option grants made during the three months ended March 31, 2012 and 2011 were granted at an exercise price per share equal to the closing market price of our common stock on the date of grant. Therefore, there is no intrinsic value because the exercise price per share of each option was equal to the fair value of the common stock on the date of grant.

Based on the fair market value of the common stock at March 31, 2012, there is no aggregate intrinsic value for options outstanding and exercisable.

Income tax valuation allowance

Evaluating the need for and amount of a valuation allowance for deferred tax assets requires significant judgment and extensive analysis of all the positive and negative evidence available to determine whether all or some portion of the deferred tax assets will not be realized. A valuation allowance must be established for deferred tax assets when it is more likely than not (a probability level of more than 50 percent) that they will not be realized. In general, “realization” refers to the incremental benefit achieved through the reduction in future taxes payable or an increase in future taxes refundable from the deferred tax assets, assuming that the underlying deductible differences and carryforwards are the last items to enter into the determination of future taxable income. In determining our valuation allowance, we consider the source of taxable income, including taxable income in prior carryback years, future reversals of existing temporary differences, the required use of tax planning strategies, and future taxable income exclusive of reversing temporary differences and carryforwards. During the six months ended June 30, 2011, management concluded that, based on the current level of sustainable profitability that generates taxable income, that it is more likely than not that our deferred tax assets will be realizable. With the release of the valuation allowance, federal and certain state and non-U.S. income taxes attributable to the fiscal year’s pre-tax income were provided for in the period.

21

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income,” (“ASU 2011-05”) which eliminated the option to present comprehensive income and its components in the statement of equity. The Company has adopted the requirements of ASU 2011-05 effective January 1, 2012.

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2012, there have been no material changes in the off-balance sheet arrangements disclosed in the Management’s Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2011.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

For the first three months ended March 31, 2012, there were no material changes in the information regarding market risk contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

ITEM 4. CONTROLS AND PROCEDURES

Management’s evaluation of disclosure controls and procedures

Based on evaluations at March 31, 2012, our chief executive officer and chief financial officer (together, our “certifying officers”), with the participation of the management team, have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that material information relating to the Company is accumulated and communicated to management, including our certifying officers, as appropriate to allow timely decisions regarding required disclosures.

Changes in internal control over financial reporting

Our certifying officers have concluded that there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended March 31, 2012, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

22

PART II

ITEM 1. LEGAL PROCEEDINGS

From time to time we may be named in claims arising in the ordinary course of business. Currently, there are no legal proceedings or claims pending against us or involving us that, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business or financial condition.

ITEM 1A. RISK FACTORS

Our business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond our control. We have identified a number of these risk factors in our Annual Report on Form 10-K for the year ended December 31, 2011, which factors should be taken into consideration when reviewing the information contained in this report. There have been no material changes with regard to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

In August 2011, we announced a repurchase plan approved by our Board of Directors authorizing the purchase of up to $25.0 million of our outstanding common stock over a period of two years. The stock repurchase program authorizes us to purchase shares of our common stock in the open market at times and prices considered appropriate by us depending upon prevailing market conditions and other corporate considerations. There were no purchases made by us during the quarter ended March 31, 2012 pursuant to this repurchase plan.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The exhibits filed or incorporated by reference as a part of this report are listed in the Index to Exhibits which appears following the signature page to this Quarterly Report on Form 10-Q and is incorporated by reference.

23

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on May 9, 2012.

Rubicon Technology, Inc.
By	/s/ Raja M. Parvez
	Raja M. Parvez
	Chief Executive Officer and President
	(Principal Executive Officer)
By	/s/ William F. Weissman
	William F. Weissman
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

24

EXHIBIT INDEX

The Exhibits listed below are filed or incorporated by reference as part of this Quarterly Report on Form 10-Q.

Exhibit No.	Description	Incorporation by Reference
3.1	Eighth Amended and Restated Certificate of Incorporation of Rubicon Technology, Inc.	Filed as Exhibit 3.1 to Amendment No. 2, to the registrant’s Registration Statement on Form S-1 (File No. 333-145880) filed on November 1, 2007
3.2	Amendment No. 1 to Eight Amended and Restated Certificate of Incorporation	Filed as Appendix A to the registrant’s Definitive Proxy statement on Schedule 14A, filed on April 29, 2011
3.3	Amended and Restated Bylaws of Rubicon Technology, Inc.	Filed as Exhibit 3.3 to Amendment No. 2, to the registrant’s Registration Statement on Form S-1 (File No. 333-145880) filed on November 1, 2007
10.1+	Master Purchase Agreement dated as of February 3, 2012 by and between Rubicon Technology, Inc. and [***]. +
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.SC. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from our quarterly report on Form 10-Q for the quarter ended March 31, 2012 are formatted in eXtensible Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of operation, (iii) consolidated statements of cash flows and (iv) notes to the consolidated financial statements

+ Confidential treatment has been requested for certain provisions of this Exhibit pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended.

25

EX-10.1

Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

RUBICON TECHNOLOGY, INC. SUPPLY AGREEMENT

This Master Purchase Agreement is made and entered into as of this third day of February, 2012 (“Effective Date”) by and between [***] and Rubicon Technology, Inc., a corporation duly organized and existing under the laws of Illinois, USA and having its principal place of business at 900 East Green Street, Bensenville, Illinois 60106 USA (hereinafter referred to as “Seller”)

In consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, the parties hereto agree that Seller will supply the Products (as defined) to [***] under the following terms and conditions:

ARTICLE 1. DEFINITIONS

1.1 Definitions

In addition to such capitalized terms that are defined elsewhere in this Agreement, when used herein the following terms shall have the respective meanings ascribed to them in this Article 1.

Agreement: this Master Purchase Agreement and any Schedules and/or Attachments between [***] and the Seller.

Contract: Order and the Seller’s acceptance of Order.

Order: [***] written instruction to supply the Products.

Products: the products stipulated in Schedule A: Products.

ARTICLE 2. SCOPE

2.1 Purchase and sale of Products

During the term and subject to the terms and conditions of this Agreement, [***] shall purchase from the Seller, and the Seller shall sell to [***] the Products. The total quantities of the Products to be purchased by [***] and supplied by the Seller during the term of this Agreement shall be specified in the Schedule A.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

2.2 Exclusion

All purchases for Products placed by [***] under this Agreement shall be governed by the terms and conditions of this Agreement and the Contracts to the entire exclusion of all other terms or conditions. No terms or condition endorsed upon, delivered with or contained in the Seller’s quotation, acknowledgement or acceptance of an Order or similar document shall form part of the Contract, and each of the Seller and [***] waives any right which it otherwise might have to rely on such terms and conditions. These conditions apply to all [***] purchases and any variation to these conditions shall have no effect unless expressly agreed in writing by [***] and the Seller.

ARTICLE 3. PRODUCTS

3.1 Products

The Products to be purchased by [***] and supplied by Seller under this Agreement shall be set forth in the Schedule A.

3.2 Change to the Products

The Seller shall not make changes to the form, appearance or function of the Products or changes to the processes, bills of materials, design, tools, or locations used to manufacture, assemble, or package the Products without [***] prior written approval. [***] may request additional time to complete qualification of a proposed change, and the Seller must allow for this contingency in its change implementation timing. The Seller will provide [***] a minimum of Four (4) months prior written notice of any intent to change: (i) the design, content, form, fit, or function of any Product; (ii) the location of manufacture, assembly, or packaging of the Product; or (iii) the part number(s) of any Product. Backward compatibility to the Product as it existed immediately prior to the proposed change is required unless

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

agreed otherwise. [***] will respond to each Product Change Notice (“PCN”) within ninety (90) days after Seller’s delivery to [***] of Seller’s notice of intent to change the Product. If [***] provides written acceptance, the Seller may make the requested change(s) and begin to ship modified Products once they have been qualified. If [***] rejects the change(s) or does not provide written acceptance within ninety (90) days of delivery of the notice, Seller may not make the change. If Seller does not follow the product change process set forth in this Section 3.2, then such failure will constitute a material breach of this Agreement.

ARTICLE 4. ORDER AND ACCEPTANCE

4.1 Order

[***] shall, in accordance with this Agreement, order the Products during the term of this Agreement by the issuance of an Order, which Order must be issued no less than thirty (30) days prior to the date on which the Products contemplated by the Order are scheduled to be shipped. For each month, the total quantities of all Products contemplated by all Orders issued by [***] during such month must exactly equal the quantity of Products listed under such month in Schedule A. If no Order is issued for a particular month, Seller shall supply, and [***] shall purchase, the Products in accordance with the schedule and terms set forth in Schedule A. The terms of each Order must be consistent with, and may not modify, any of the terms of this Agreement. In the event of a conflict between an Order and the terms of this Agreement, the terms of this Agreement will control.

4.2 Acceptance

Subject to Section 4.1, an Order shall be considered accepted by the Seller by one of the following means: (i) issuance of an acceptance; or (ii) failure to reject an Order within three (3) working days from the receipt. Unless an Order does not conform to the requirements of this Agreement, the Seller must accept such Order.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

ARTICLE 5. DELIVERY

5.1 Contractual term of delivery

The Seller understands that time is of the essence to timely deliver all Products in accordance with the terms of the Contract. Unless otherwise agreed in the Contract, shipment of Products sold hereunder will be CIP [***] according to Incoterms 2010. Unless otherwise agreed in the Contract, trans-shipment and partial shipment are not allowed.

5.2 Date of delivery

Unless otherwise agreed in the Contract, delivery shall take place within thirty (30) days of issuance of Order.

5.3 Invoice

The Seller shall invoice [***] upon, but separately from, dispatch of Products to [***].

5.4 Delivery note

The Seller shall ensure that each delivery is accompanied by a delivery note which shows, inter alia, Order number, date of Order, number of packages and contents and, in the case of part delivery, the outstanding balance remaining to be delivered.

5.5 Packing

The Products will be packaged in the following manner: (i) consistent with industry standards; (ii) consistent with [***] requirements regarding the packaging’s form and content, as those requirements may be provided to the Seller from time to time; and (iii) in a manner that adequately protects the Products from deterioration and physical damage and ensures the safe arrival of Products to [***]. If the Seller requires [***] to return any packaging material to the Seller, that fact must be clearly stated on any delivery note delivered to [***] and any such packaging material shall only be returned to Seller at the cost of Seller.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

5.6 Excess in quantity

If the Products are delivered to [***] in excess of the quantities ordered, [***] shall not be bound for the excess and any excess shall be and shall remain at the Seller’s risk and shall be returnable at the Seller’s expense.

5.7 Title and risk

Title to Products shall pass from the Seller to [***] at the time of delivery provided, however, that if the payment for Products is made prior to delivery, then the title shall pass to [***] when the full payment has been made. The Seller warrants to [***] that there is no restriction on or impediment against the passing of the title to the Products to [***]. Risk to the Products shall pass from the Seller to [***] at the time of delivery.

5.8 Late delivery

The Seller shall deliver Products to [***] on the agreed delivery date as set forth in the Contract. If the Seller fails to deliver Products by the fifth (5^th) day after the agreed delivery date, as set forth in the Contract, due to any reasons attributable to the Seller, the Seller shall be obliged to pay [***] liquidated damages at a rate of 0.05% per day of the total value of Products from such fifth (5^th) day to the actual delivery date. If the delivery of the Products delay for a period of more than fourteen (14) days from the agreed delivery date, without prejudice to any other rights which it may have, [***] reserves the right, upon notice to the Seller, to:

(a) terminate the Contract or this Agreement;

(b) refuse to accept any subsequent delivery of the delayed Products that the Seller attempts to make, and withhold any subsequent payment for such delayed Products until such time as they may be accepted by [***]

(c) recover from the Seller any expenditure reasonably incurred by [***] in obtaining the delayed Products in substitution from other sellers; and/or

(d) claim direct, compensatory damages for any reasonable additional costs, loss or expense incurred by [***] which are directly attributable to the Seller’s failure to deliver the Products on the due date.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

For the avoidance of doubt, if a Product is delivered on the agreed delivery date but is defective or otherwise non-conforming, without limiting any of [***] rights and remedies accruing as a result of the fact that such Product is defective or non-conforming, such Product will not be considered late under this Section 5.8, provided however that if the Seller fails to cure and deliver such delivered but defective or non-conforming Products within thirty (30) days of [***] notice, [***] may terminate this Agreement and/or the Contract.

5.9 Calculation

The quantities of the Products ordered but cancelled by [***] due to the delivery delay shall be deemed to have been purchased by [***] in calculating the sale and purchase volume requirements specified in the Schedule A.

5.10 Return Material Authorization (RMA) Process

In accordance with Section 7.1 below, [***] will have a reasonable opportunity to inspect the Products and will provide the Seller with evidence data of non-conforming Products. The Seller promptly will issue a return material authorization (“RMA”) to [***] for the lot of the non-conforming Products permitted to be returned pursuant to Section 7.1 below. Title to Products designated for return by [***] will revert to the Seller. If the Seller does not issue a RMA within three (3) working days of [***] notice, [***] may return the lot of nonconforming Products. The Seller promptly will evaluate the Products to determine nonconformance and its root cause, and will provide [***] with an analysis of the non-conforming Products. The return of non-conforming Products will not affect [***] other rights and remedies under this Agreement or applicable law, including, without limitation, the right to reject or revoke acceptance of non-conforming Products. The Seller will pay all freight expenses for non-conforming Products.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

ARTICLE 6. PRICE AND PAYMENT

6.1 Price

Unless otherwise agreed in the Contract, the price of the Product shall be as specified in the Schedule A.

6.2 Payment

Unless otherwise agreed in the Contract, [***] payment terms will be ninety (90) days from the end of the month when (i) the Products are delivered and (ii) the invoice is issued, by telegraphic transfer. The invoice date will not be earlier than the delivery date of Products invoiced.

6.3 [***]

ARTICLE 7. INSPECTION, WARRANTY AND QUALITY

7.1 Inspection

The Seller shall carry out its out-going quality inspection on the Product according to the Quality Criteria (as defined below) and provide [***] with the qualified Product. The Seller shall submit to [***] the quality records of every shipment. Within thirty (30) days after the receipt of Products, [***] shall, or cause its qualified agent to, inspect the Products at its own cost. [***] incoming quality inspection will be done by attribute sampling method using [***] (i) [***] with respect to physical (measurement) inspection items and (ii) [***] with respect to appearance inspection items based on the specification and the quality and inspection criteria which are specified in the Attachment A of the Schedule A (hereinafter collectively referred to as “Quality Criteria”). [***] shall immediately notify the Seller if, during the incoming quality inspection, [***] reasonably finds that any of the Products is not in compliance with the Quality Criteria. In such case, [***] shall have the right to return any

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

and all lot containing a non-conforming Product. [***] will put into the production line the Products only in the lot passed in [***] incoming quality inspection. If any non-conforming or defective Product based on the Quality Criteria is found by the end of PSS process stage in [***] production line, Seller shall at its own expenses replace the non-conforming or defective Products with the conforming or non-defective Products at a replacement ratio of [***] within one (1) month of the return. For any permitted returns made by [***] under this Agreement, before returning such Products to Seller for the replacement, [***] shall clean and remove all PR coating from the Products. All claims for errors, damages, defects, shortages and non-conformities in any shipment of Products discovered by the incoming quality inspection shall be made in writing to the Seller and be dispatched by [***] with full particulars within thirty (30) days after the receipt of the Products. Failure to make such claim within such period shall constitute acceptance of the shipment, provided however, that any such acceptance will in no event limit, modify, waive or otherwise restrict [***] rights under the terms, including without limitation the warranty provisions, of this Agreement. The Seller shall provide [***] with an initial response (root cause analysis) and an improvement plan within five (5) working days and a final root cause analysis, an improvement plan and a recurrence prevention plan within thirty (30) calendar days, after the Seller receives such claim from [***]. If the Seller does not provide [***] with those analysis and/or plans or perform any action based on those plans within the above periods, such failure will constitute a material breach of this Agreement and [***] may terminate this Agreement and the Contract.

7.2 Warranty

(a) For a period of one (1) year after delivery of a Product, the Seller warrants that such Product shall: i) be free from defects, including latent defects, in design, material and workmanship applicable thereto; ii) conform in all material

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

respects to specifications, if any, and Quality Criteria; iii) be new, unused and not contain used or repaired parts; iv) be free and clear of all liens, claims, encumbrances and other restrictions; v) be merchantable as goods of that kind; and vi) not violate or infringe any property rights, including intellectual property rights, of any person or entity.

(b) Should the Products fail to meet warranties given in Article 7.2(a), the Seller shall, as [***] requests, replace or provide a refund for the defective Products in question subject to the replacement ratio set forth in Article 7.1. [***] reserves the right to suspend payment for such defective Products concerned until such non-compliance has been rectified or eliminated.

7.3 Epidemic Defect

If more than [***] of the aggregate of any Product delivered to [***] during any thirty (30) days period fails to meet any of the Product warranties given in Article 7.2(a), as measured in accordance with [***] testing and evaluation processes (“Epidemic Defect”), the Seller and [***] shall immediately cooperate to find appropriate countermeasures, and, [***] may, at its sole option, in addition to and without any other rights or remedies that it may have at law or in equity, or pursuant to this Agreement, take any or all of the following action: (i) cancel or suspend any outstanding Contract for the affected Products; and (ii) return all affected Products, including any Products purchased hereunder that are compatible with or used in connection with the defective Products, and to the extent [***] has paid the Seller for the returned Products, the Seller shall reimburse [***] the price paid with interest and return costs for the Products, which shall be payable by the Seller within twenty (20) days after the receipt of the returned Products. In the event [***] elects to cancel or suspend any Contract in accordance with this Article, and afterwards [***] wishes to reinstate such Contract, then such Contract shall be automatically reinstated in accordance with the original terms and conditions of such Contract (including, without limitation, the applicable schedule but taking into consideration the period of time that such orders or deliveries were suspended) upon a written notice from [***] to the Seller.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

7.4 Addition to statutory conditions

[***] rights under this ARTICLE 7. INSPECTION, WARRANTY AND QUALITY are in addition to the statutory conditions implied in favor of [***] by any governing laws.

ARTICLE 8. INDEMNIFICATION; LIMITATION OF LIABILITY

8.1 Indemnification

Seller shall defend, indemnify and hold [***] and its officers, directors, contractor, agents and employees harmless from liability asserted by third parties (including all damages, losses, costs and attorneys fees) arising out of (i) infringement by the Products of any intellectual property rights of any third party, including but not limited to patent rights, trademark rights, copyrights or other proprietary rights, or (ii) the negligence or willful misconduct of Seller, or (iii) any breach of warranties, or (iv) any claim based on the death or bodily injury to any person, destruction or damage to property, or contamination of the environment to the extent caused by the Products, and Seller shall have no obligation to indemnify [***] for any claim or damage resulting from the modification of the Products by [***]. Should the use of any Products by [***]. its subcontractors, or customers be enjoined, be threatened by injunction, or be the subject of any legal proceeding related to or alleging the Product’s infringement of any patent or other intellectual property rights, Seller shall, at its sole cost and expense, either (a) substitute fully equivalent non-infringing Products; (b) modify the Products so that they no longer infringe but remain fully equivalent in quality, performance and functionality; (c) obtain for [***], its subcontractors, or customers the right to continue using the Products; or (d) if none of the foregoing is possible, refund all amounts paid for the infringing Products.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

8.2 Indemnification procedures

(a) Promptly, upon becoming aware of any matter which is subject to the Article 8.1, (a “Claim”), the party seeking indemnification (the “Indemnified Party”) must give notice of the Claim to the other party (the “Indemnifying Party”), accompanied by a copy of any written documentation regarding the Claim received by the Indemnified Party.

(b) The Indemnifying Party will, at its option, settle or defend, at its own expense and with its own counsel, the Claim. The Indemnifying Party will not enter into any settlement that imposes any liability or obligation on the Indemnified Party without the Indemnified Party’s prior written consent. The parties will cooperate in the settlement or defense and give each other full access to all relevant information.

(c) The Indemnifying Party will reimburse the Indemnified Party on demand for all damages, costs and expenses incurred by the Indemnified Party in defending or settling the Claim.

8.3 Limitation of Liability

NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT TO THE CONTRARY, EXCEPT FOR EACH PARTY’S OBLIGATIONS UNDER SECTIONS 3.2, 8.1, 9.1, 9.2, 9.4 AND SCHEDULE B, (I) EACH PARTY’S MAXIMUM AGGREGATE LIABILITY IN CONNECTION WITH THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY WILL IN NO EVENT EXCEED THE TOTAL COMPENSATION PAID OR PAYABLE BY [***] TO THE SELLER UNDER THIS AGREEMENT, AND (II) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING, BUT NOT LIMITED TO, ANY LOST PROFITS OR BUSINESS INTERRUPTION COSTS, EVEN IF SUCH PARTY OR ITS AUTHORIZED REPRESENTATIVE (A) HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR (B) SHOULD HAVE OR COULD HAVE REASONABLY FORESEEN THE OCCURRENCE OF SUCH DAMAGES.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

ARTICLE 9. OTHER TERMS

9.1 Use of intellectual property

Neither this Agreement nor the delivery of any Product hereunder shall be construed as granting either by estoppel or otherwise, any right in or license under (i) any present or future data, drawings, plans or ideas or methods disclosed in this Agreement, or (ii) any invention, patent, copyright, trade secret or other intellectual property right now or hereafter owned or controlled by either party. [***] may not use any trademark, trade name, service mark or business name used or claimed by the Seller (whether or not registered), either separately or in conjunction with other words or marks, in [***] firm name or any trade name except with the Seller’s prior written approval. If, after such approval, the Seller should at any time so request, [***] shall promptly discontinue such use and take all steps necessary or appropriate in the opinion of the Seller to eliminate such trademark, trade name, service mark or business name usage. If the Seller intends to use any trademark, trade name, service mark or business name of [***], prior to use, the Seller shall inform [***] of the manner of such use, and submit a sample of any materials bearing the trademark, trade name, service mark or business name for prior inspection and approval by [***]. If, after such approval, [***] should at any time so request, the Seller shall promptly discontinue such use and take all steps necessary or appropriate in the opinion of [***] to eliminate such trademark, trade name, service mark or business name usage.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

9.2 [***] property

Materials, equipment, tools, dies, moulds, copyright, design rights or any other forms of intellectual property rights in all drawings, specifications and data supplied by [***] to the Seller shall at all time be and remain exclusive property of [***] but shall be held by the Seller in safe custody at its own risk and maintained and kept in good condition by the Seller until returned to [***] and shall not be disposed of other than in accordance with [***] written instructions, not shall such items be used otherwise than authorized by [***] in writing. To the extent that this Agreement contemplates the production of Product utilizing copyrights, trademarks, servicemarks, tradedress, or other intellectual property supplied to Seller by, or on behalf of, [***] (collectively, the “Intellectual Property”), [***] represents and warrants that [***] is either the owner or the authorized licensee of such Intellectual Property, but in either case has the free and unencumbered right to utilize such Intellectual Property in the manner contemplated by ultimate utilization of the Product. Such representation and warranty shall survive the manufacture and delivery of the Product. [***] hereby agrees to indemnify and hold Seller, its shareholders, officers, directors, agents, servants, employees, and each of their respective affiliates, harmless from and against any and all damages, losses and costs of defense (including reasonable counsel fees) arising out of the breach of such representation and warranty.

9.3 Access to premises

The Seller will give [***] reasonable access, during normal business hours and upon at least five (5) days’ prior written notice, to non-proprietary areas of both sites and buildings that conduct manufacturing activities, for the sole purpose of permitting [***] to verify that the Seller is in adherence with this Agreement, and only to the extent necessary for such purpose. Any such visit and access will be reasonable in terms of scope and duration.

9.4 Confidentiality

The parties’ confidentiality and related obligations are set forth in Schedule B.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

ARTICLE 10. TERM AND TERMINATION

10.1 Term

The term of this Agreement shall be from April 1, 2012 to December 31, 2012. The terms of this Agreement remain in effect for any Contract that is outstanding at the time of expiration or termination of the Agreement.

10.2 Termination for breach

This Agreement may be terminated by a notice in writing with immediate effect, without prior recourse to any judicial or other authority, given by the other party to the defaulting party if the party commits a breach or repudiation of its obligations under this Agreement and fails to cure such breach within 30 days from notice of the other party.

10.3 Termination for financial instability

This Agreement may be terminated by a notice in writing with immediate effect, without prior recourse to any judicial or other authority, given by the other party to the party in question upon the occurrence of any of the following events:

(a) the party becomes bankrupt, insolvent, or has its business placed in the hand of a receiver, assignee or trustee, whether by voluntary act or otherwise; or

(b) the party enters into an arrangement for the benefit of its creditors on account of such party’s inability to make any required payments to such creditors; or

(c) an order is made or a resolution is passed for the winding up of the other party, or an order is made for the appointment of an administrator to manage the affairs, business and property of the other party, or such an administrator is appointed, or documents are filed with the court for the appointment of an administrator, or notice of intention to appoint an administrator is given by the other party or its directors or by a qualifying charge holder, or a receiver is appointed of any of the other party’s assets or undertaking, or circumstances arise which entitle the court or a creditor to appoint a receiver or manager or which entitle the court to make a winding-up order, or the other party takes or suffers any similar or analogous action in consequence of the debt; or

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

(d) the party suffers severe financial distress or execution of the like levied upon any of its goods or effects; or

(e) the party ceases, or threatens to cease, to carry on business.

ARTICLE 11. GOVERNING LAW AND SETTLEMENT OF DISPUTE

11.1 Governing law

This Agreement shall be interpreted and governed by the laws of the State of New York, USA.

11.2 Settlement of dispute

All disputes, controversies or disagreements which may arise between the parties, in relation to or in connection with this Agreement, or for the breach hereof shall be finally settled by arbitration. The arbitration shall be conducted by three (3) arbitrators in Hong Kong, in accordance with the arbitration rules of the International Chamber of Commerce. The award rendered by the arbitrators shall be final and binding upon both parties.

11.3 Waiver of jury

Each party, to the extent permitted by law, knowingly, voluntarily, and intentionally waives, its right to a trial by jury in any action or other legal proceeding arising out of or relating to this Agreement and the transactions it contemplates. This waiver applies to any action or legal proceeding, whether sounding in contract, tort, or otherwise. Each party acknowledges that the provisions of this Article are a material consideration in executing and delivering this Agreement and consummating the transaction it contemplates.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

11.4 Waiver of discovery

Each party, to the extent permitted by law, knowingly, voluntarily, and intentionally waives, discovery in any action or other legal proceeding arising out of or relating to this Agreement and the transactions it contemplates. This waiver applies to any action or legal proceeding, whether sounding in contract, tort, or otherwise. Each party acknowledges that the provisions of this Article are a material consideration in executing and delivering this Agreement and consummating the transaction it contemplates. Notwithstanding the foregoing, prior to the arbitration hearing each party will, among other things, produce a list of witnesses and the projected testimony of such witnesses. Prior to the arbitration hearing, each party will produce any experts’ reports it intends to use in such hearing, and the opposing party will be entitled to depose such experts prior to the hearing.

11.5 Exclusion of CISG

The United Nations Convention on Contracts for the International Sale of Goods is expressly and entirely excluded.

ARTICLE 12. MISCELLANEOUS PROVISIONS

12.1 Notice

Any notice required or permitted to be given hereunder shall be in writing, and may be given by personal service, registered airmail, or facsimile if confirmed on the same day in writing by registered airmail, with postage prepaid to the following addresses:

To [***]
CC:	Address:
Telephone:	Fax:
To Seller
CC:	Address:
Telephone:	Fax:

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

Any notice so given shall be deemed to be received, if sent by airmail, upon receipt or ten (10) days after posting, whichever is earlier, or if sent by facsimile, twenty-four (24) hours after dispatch.

12.2 Survival

The parties’ rights and obligations which, by their nature, would continue beyond the termination, cancellation, or expiration of this Agreement, including but not limited to those rights and obligations of the parties set forth in ARTICLE 7. INSPECTION, WARRANTY AND QUALITY, ARTICLE 8. INDEMNIFICATION, ARTICLE 9. OTHER TERMS and ARTICLE 11. GOVERNING LAW AND SETTLEMENT OF DISPUTE will survive such termination, cancellation or expiration.

12.3 Entire agreement

This Agreement constitutes the final agreement between the parties. It is the complete and exclusive expression of the parties’ agreement on the matters contained in this Agreement. All prior and contemporaneous negotiations and agreements between the parties on the matter contained in this Agreement are expressly merged into and superseded by this Agreement. The provisions of this Agreement may not be explained, supplemented, or qualified through evidence of trade usage or a prior course of dealings. In entering into this Agreement, neither party has relied upon any statement, representation, warranty, or agreement of the other party except for those expressly contained in this Agreement. There are no conditions precedent to the effectiveness of this Agreement. Notwithstanding the foregoing, the Memorandum of Understanding, effective as of February 3, 2012, by and between [***] and Seller shall remain in full force and effect.

12.4 Assignment

No party may assign any of its rights under this Agreement voluntarily or involuntarily without the prior written consent of the other party, provided however, that [***] reserves the right to assign its rights to any lender providing financing. No party may delegate any performance under this Agreement voluntarily or involuntarily. Any purported assignment of rights or delegation of performance in violation of this Article is void.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

12.5 Amendment

The parties may not amend this Agreement, including the Schedules and Attachments hereto, except by an express written agreement of the parties that is signed by the parties.

12.6 Waiver

No failure or delay in i) exercising any right or remedy; or ii) requiring the satisfaction of any condition under this Agreement, and no course of dealing between the parties, operates as a waiver or estoppel of any right, remedy or condition. A waiver made in writing on one occasion is effective only in that instance and only for the purpose that it is given and is not to be construed as a waiver on any future occasion or against any other person. To the extent any course of dealing, act, omission, failure or delay in exercising any right or remedy under this Agreement constitutes the election of an inconsistent right or remedy, that election does not i) constitute a waiver of any right or remedy; or ii) limit or prevent the subsequent enforcement of any contract provision. No single or partial exercise of any right or remedy under this Agreement precludes the simultaneous or subsequent exercise of any other right or remedy. The rights and remedies of the parties set forth in this Agreement are not exclusive of, but are cumulative to, any rights or remedies now or subsequently existing at law, in equity, or by statute.

12.7 Severability

If any one or more of the provisions contained in this Agreement shall be declared invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired, and in such case, the parties hereto oblige themselves to reach the purpose of the invalid provision by a new, valid and legal stipulation.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

12.8 Headings

The headings herein are included for the purposes of convenience only and do not affect the construction or interpretation of any provision of this Agreement.

12.9 Counterparts

This Agreement may be executed in any number of counterparts. Any single counterpart or set of counterparts signed by the parties hereto shall constitute one original agreement for all purpose.

12.10 Language

For the purpose of communication, this Agreement may be translated into another language, but this Agreement, which is executed in the English language, shall be only binding version.

12.11 Force majeure

Neither party shall be liable to the other party for non-performance or delay in performance of any of its obligation under this Agreement due to causes reasonably beyond its control including, but not limited to, fire, flood, epidemic, natural disasters, unavoidable accidents, governmental regulations, war, riots and insurrections, provided, however, that strikes, lock-out, labor trouble, other industrial disturbances and lack of raw materials are expressly excluded. The list of force majeure events set forth in the previous sentence is not exhaustive, and the principle of ejusdem generis is not to be applied in determining whether a particular act or event qualifies as a force majeure event. Upon the occurrence of such a force majeure condition, the affected party shall immediately notify the other party with as much detail as possible and shall promptly inform the other party of any further developments. Immediately after the cause is removed, the affected party shall perform such obligations as promptly as practicable. Should any event of force majeure continue for fifteen (15) days or more, one party may terminate this Agreement upon notice to the other party.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

12.12 Subcontracting

The Seller will not subcontract any of its obligations under this Agreement without [***] prior written consent except that Seller may subcontract certain performance obligations hereunder to Rubicon Sapphire Technology (Malaysia) Sdn Bhd. The Seller retains responsibility for all services subcontracted hereunder and will indemnify [***] against any liability caused by the acts or omissions of Seller’s subcontractors.

(intentionally blank below)

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement in duplicate to be executed by their duly authorized representatives.

[***]		Rubicon Technology, Inc.
By:	/s/[***]	By:	/s/ Raja M. Parvez
	(I have the authority to bind the corporation)		(I have the authority to bind the corporation)
Name:	[***]	Name:	Raja M. Parvez
	(Print or Type)		(Print or Type)
Title:	Vice President	Title:	President
	(Print or Type)		(Print or Type)

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

Schedule A: Products

Products: Exclusively [***] as more fully described in the Products Specifications section below and per Attachment A. No other products are included under this Agreement, and the sale and purchase of any other products will require negotiation, terms and agreement between the parties.

Product Specifications: See Attachment A

Sale and Purchase Volume Requirements:

The Seller agrees to supply and [***] agrees to purchase the Products totaling [***] wafers in total over the term of this Agreement, to be shipped to [***] in accordance with the delivery schedule specified in the Order issued by [***], which will be based on the quantities provided in the table below, at or before the end of each month for the period of April 1, 2012 through December 31, 2012.

Period	2012
	April	May	June	July	August	September	October	November	December
Quantity	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]
Price (per wafer)	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]	[***]

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

Attachment A: Product Specifications

[***]

[***]

[***]

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

Schedule B: Confidentiality

1.1 Parties under this Agreement intend to exchange certain information they consider to be Confidential Information regarding this Agreement (“Purpose”).

1.2 The intent of the parties is to protect the Confidential Information which either party elects to disclose, but not to obligate either party to disclose any Confidential Information.

2.1 “Confidential Information” means any information, including, without limitation, any information, technical data or know-how relating to discoveries, ideas, inventions, concepts, software, equipment, designs, drawings, specifications, technique processes, systems, models, data, source code, object code, documentation, diagrams, flow charts, research, development, business plans or opportunities, products, projects or products under consideration, procedures, and information related to finances, costs, prices, suppliers, vendors, customers and employees which is disclosed by the disclosing party in connection with the Purpose whether before, on or after the date hereof, directly or indirectly, in writing, orally or by drawings or inspection of equipment or software, to the receiving party or any of its employees or agents. If Confidential Information is disclosed in writing, in a drawing or in any other tangible form, such Confidential Information must be clearly marked as “Confidential” or with a similar legend at the time of disclosure. Confidential Information disclosed orally or in any other intangible form shall be identified orally as being confidential at the time of disclosure and confirmed in writing by the disclosing party within thirty (30) days after such disclosure by submitting a letter summarizing such Confidential Information and manifesting its confidentiality to the receiving party.

2.2 Confidential Information does not include any of the following: (a) information that is or becomes part of the public domain without violation of this Agreement by the receiving party; (b) information that was known to or in the possession of the receiving party on a non-confidential basis prior to the disclosure thereof to the receiving party by the disclosing party, as evidenced by written records; (c) information that was developed independently by the receiving party, without use of or reference to the Confidential Information, as established by written evidence; or (d) information that is disclosed to the receiving party by a third party under no obligation of confidentiality to the disclosing party and without violation of this Agreement by the receiving party. The burden of proving that information may be disclosed because it does not fall within the definition of Confidential Information shall be on the receiving party.

3.1 The receiving party agrees that, unless the disclosing party gives its prior written authorization, it shall: (a) not use the Confidential Information for any other purpose other than for the Purpose; (b) not disclose any Confidential Information to any third party except those directors, officers and employees of the receiving party who are required to have such Confidential Information in order to carry out the Purpose and who have signed a non-use and non-disclosure agreement or have agreed upon corporate confidentiality rules in content similar to the provisions hereof; and (c) not print, copy, adopt, modify, store, decompile, disassemble or reverse engineer/translate any items or discover the source code or trade secrets thereof that constitute Confidential Information other than as required for the Purpose.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

CONFIDENTIAL TREATMENT REQUESTED

BY RUBICON TECHNOLOGY, INC.

3.2 The receiving party shall prevent the unauthorized use, disclosure, dissemination or publication of the Confidential Information with the same degree of care that the receiving party uses to protect its own confidential information of a similar nature, but no less than a reasonable degree of care. The receiving party agrees to notify the disclosing party in writing of any misuse or misappropriation of the disclosing party’s Confidential Information which may come to the receiving party’s attention.

4.1 If the receiving party becomes legally obligated to disclose Confidential Information by any governmental entity with jurisdiction over it (including, without limitation, pursuant the rules and regulations promulgated by the Securities and Exchange Commission or any national stock exchange on which any of the party’s securities are traded), prior to such disclosure, the receiving party shall give the disclosing party prompt written notice of such obligations sufficient to allow the disclosing party the opportunity to pursue its legal and equitable remedies regarding such potential disclosure. The receiving party agrees to: (a) assert the confidential nature of the Confidential Information to the governmental entities; (b) disclose only such information as is required to be disclosed by law; (c) use its commercially reasonable efforts to obtain confidential treatment for any Confidential Information that is so disclosed; and (d) provide reasonable assistance to the disclosing party in protecting such disclosure.

5.1 The obligation of the receiving party to protect the Confidential Information under this Agreement shall survive for a period of three (3) years from the expiration or termination of this Agreement.

5.2 The receiving party shall: (a) promptly return all originals, copies, reproductions and summaries of the Confidential Information furnished by the disclosing party upon the written request of the disclosing party or after termination or expiration of this Agreement; and/or (b) at the disclosing party’s option, destroy or delete the same. In the event of such destruction or deletion, the receiving party shall certify in writing to the disclosing party, within ten (10) days, that such destruction or deletion has been accomplished.

6.1 The parties understand and agree that the disclosing party has not made or shall not make any representation or warranty as to the accuracy or completeness of the Confidential Information, and that the disclosing party shall not have any liability resulting from the use of the Confidential Information by the receiving party.

6.2 Neither the execution of this Agreement nor the furnishing of any Confidential Information hereunder shall be construed by the receiving party as granting any license or any other rights other than as set forth herein under any trade secrets, copyrights or patents now or hereafter owned by or controlled by the disclosing party, or under any trade secrets, copyrights or patents in which the disclosing party is now licensed.

6.3 This Agreement shall not be construed by either party in any manner to be an obligation to enter into a subsequent agreement of any kind, or to result in: (a) any claim of obligation to enter into a subsequent agreement of any kind; or (b) any claim for reimbursement of costs or payment for any efforts expended hereunder.

* [***]: Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

EX-31.1

Exhibit 31.1

Certifications

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Raja M. Parvez, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Rubicon Technology, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2012	By:	/s/ Raja M. Parvez
		Raja M. Parvez
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, William F. Weissman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Rubicon Technology, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2012	By:	/s/ William F. Weissman
		William F. Weissman
		Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002,

18 U.S.C. Section 1350

In connection with the Quarterly Report of Rubicon Technology, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Raja M. Parvez, President and Chief Executive Officer of the Company, and I, William F. Weissman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2012	By:	/s/ Raja M. Parvez
		Raja M. Parvez
		President and Chief Executive Officer
Date: May 9, 2012	By:	/s/ William F. Weissman
		William F. Weissman
		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information [Abstract]

Segment Information

3. SEGMENT INFORMATION

The Company evaluates operations as one reportable segment, as it only reports profit and loss information on an aggregate basis to its chief operating decision maker.

Revenue is attributed by geographic region based on ship-to location of the Company's customers. The following table summarizes revenue by geographic region:

	Three months ended March 31,
	2012		2011
	(in thousands)
France	$	2,751	$	111
United States		2,125		1,915
Taiwan		1,693		23,442
Australia		1,116		—
Japan		267		3,640
Korea		—		7,413
Other		2,255		1,449
Revenue	$	10,207	$	37,970

The following table summarizes revenue by product type:

	Three months ended March 31,
	2012		2011
	(in thousands)
Core	$	2,758	$	27,573
Polished		5,681		8,912
Optical		1,759		1,465
Other		9		20
Revenue	$	10,207	$	37,970

The following table summarizes assets by geographic region:

	March 31, 2012		December 31, 2011
	(in thousands)
United States	$	212,031	$	223,430
Malaysia		34,471		36,492
Japan		28		30
Total Assets	$	246,530	$	259,952

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Summary Of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Rubicon Worldwide LLC and Rubicon Sapphire Technology (Malaysia) SDN BHD. All intercompany transactions and balances have been eliminated in consolidation.

Foreign currency translation and transactions

Rubicon Worldwide LLC's assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates and capital accounts at historical exchange rates. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. Translation adjustments resulting from fluctuations in exchange rates for Rubicon Worldwide LLC are recorded as a separate component of accumulated other comprehensive income (loss) within stockholders' equity.

The Company has determined that the functional currency of Rubicon Sapphire Technology (Malaysia) SDN BHD is the U.S. dollar. Rubicon Sapphire Technology (Malaysia) SDN BHD's assets and liabilities are translated into U.S. dollars using the remeasurement method. Non-monetary assets are translated at historical exchange rates and monetary assets are translated at exchange rates existing at the respective balance sheet dates. Translation adjustments for Rubicon Sapphire Technology (Malaysia) SDN BHD are included in determining net income (loss) for the period. The results of operations are translated into U.S. dollars at the average exchange rates during the respective period. The Company records these gains and losses in other income (expense).

Foreign currency transaction gains and losses are generated from the effects of exchange rate changes on transactions denominated in a currency other than the functional currency of the Company, which is the U.S. dollar. Gains and losses on foreign currency transactions are generally required to be recognized in the determination of net income (loss) for the period. The Company records these gains and losses in other income (expense).

Investments

The Company invests available cash primarily in investment grade commercial paper, corporate notes and government securities. Investments classified as available-for-sale securities are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Investments in trading securities are reported at fair value, with both realized and unrealized gains and losses recorded in other income (expense), in the consolidated statement of operations. Investments in which the Company has the ability and intent, if necessary, to liquidate in order to support its current operations, are classified as short-term.

The Company reviews its available-for-sale securities investments at the end of each quarter for other-than-temporary declines in fair value based on the specific identification method. The Company considers various factors in determining whether an impairment is other-than-temporary, including the severity and duration of the impairment, changes in underlying credit ratings, forecasted recovery, its ability and intent to hold the investment for a period of time sufficient to allow for any anticipated recovery in market value and the probability that the scheduled cash payments will continue to be made. When the Company concludes that an other-than-temporary impairment has resulted, the difference between the fair value and carrying value is written off and recorded as a charge on the consolidated statement of operations. As of March 31, 2012, no impairment was recorded.

The Company's long-term investment is accounted for as a cost method investment and is adjusted as needed based on a review of the investment's financial position.

Accounts receivable

The majority of the Company's accounts receivable is due from manufacturers serving the LED and SoS industries. Credit is extended based on an evaluation of the customer's financial condition. Accounts receivable are due based on contract terms and at stated amounts due from customers, net of an allowance for doubtful accounts.

Accounts outstanding longer than the contractual payment terms are considered past due. The Company determines its allowance by considering a number of factors, including the length of time past due, the customer's current ability to pay and the condition of the general economy and industry as a whole. The Company writes off accounts receivable when they are deemed uncollectible, and payments subsequently received on such receivables are recorded as a reduction to bad debt expense.

The following table shows the activity of the allowance for doubtful accounts:

	March 31, 2012			December 31, 2011
	(in thousands)
Beginning balance	$	378		$	194
Charges to costs and expenses		(204	)		1,873
Accounts charged off, less recoveries		—			(1,689	)
Ending balance	$	174		$	378

Inventories

Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method, and includes materials, labor and overhead. The Company reduces the carrying value of its inventories for differences between the cost and the estimated net realizable value, taking into account usage, expected demand, technological obsolescence and other information. Inventories are composed of the following:

	March 31, 2012		December 31, 2011
	(in thousands)
Raw materials	$	12,765	$	7,835
Work in progress		14,367		9,776
Finished goods		5,378		5,212
	$	32,510	$	22,823

Property and equipment

Property and equipment consisted of the following:

	March 31, 2012			December 31, 2011
	(in thousands)
Land and land improvements	$	4,123		$	2,540
Buildings		27,076			26,915
Machinery, equipment and tooling		99,201			98,276
Leasehold improvements		7,712			7,712
Furniture and fixtures		941			834
Information systems		986			954
Construction in progress		19,289			17,530
Total cost		159,328			154,761
Accumulated depreciation and amortization		(36,768	)		(33,830	)
Property and equipment, net	$	122,560		$	120,931

Revenue recognition

The Company recognizes revenue from product sales when earned. Revenue is recognized when, and if, evidence of an arrangement is obtained and the other criteria to support revenue recognition are met, including:

• Persuasive evidence of an arrangement exists. The Company requires evidence of a purchase order with the customer specifying the terms and specifications of the product to be delivered, typically in the form of a signed quotation or purchase order from the customer.

• Title has passed and the product has been delivered. Title passage and product delivery generally occur when the product is delivered to a common carrier.

• The price is fixed or determinable. All terms are fixed in the signed quotation or purchase order received from the customer. The purchase orders do not contain rights of cancellation, return, exchange or refund.

• Collection of the resulting receivable is reasonably assured. The Company's standard arrangement with customers includes payment terms. Customers are subject to a credit review process that evaluates each customer's financial position and its ability to pay. Collectability is determined by considering the length of time the customer has been in business and its history of collections. If it is determined that collection is not probable, no product is shipped and no revenue is recognized unless cash is received in advance.

The Company does not provide maintenance or other services and it does not have sales that involve multiple elements or deliverables.

Net income per common share

Basic net income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted-average number of diluted common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted-average shares outstanding any common stock equivalents, outstanding stock options and warrants based on the treasury stock method.

Diluted net loss per share is the same as basic net loss per share for the three months ended March 31, 2012 because the effects of potentially dilutive securities are anti-dilutive.

At March 31, 2012, the Company had the following anti-dilutive securities outstanding which were excluded from the calculation of diluted net loss per share:

	March 31, 2012
Warrants		172,886
Stock options		360,376
		533,262

Comprehensive income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise from transactions and other events from non-owner sources. Comprehensive income (loss) includes net earnings (loss) and other non-owner changes in equity that bypass the statement of operations and are reported in a separate component of equity. For the three months ended March 31, 2012 and 2011, other comprehensive income (loss) includes the unrealized loss on investments and foreign currency translation adjustments.

	March 31, 2012			December 31, 2011
	(in thousands)
Beginning Balance	$	(50	)	$	(10	)
Unrealized gain (loss) on investments		42			(42	)
Unrealized gain (loss) on currency translation		(3	)		2
Ending Balance	$	(11	)	$	(50	)

Recent accounting pronouncements

In June 2011, the FASB issued ASU No. 2011-05, "Comprehensive Income (ASC Topic 220): Presentation of Comprehensive Income," ("ASU 2011-05") which eliminated the option to present comprehensive income and its components in the statement of equity. The Company has adopted the requirements of ASU 2011-05 effective January 1, 2012.

Reclassifications

Certain prior period amounts on the balance sheet have been reclassified to conform to the current period presentation.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Assets
Cash and cash equivalents	$ 14,571	$ 4,290
Restricted cash	146	189
Short-term investments	40,398	50,528
Accounts receivable, net	8,390	30,655
Accounts receivable, related parties	3,902	1,989
Inventories, net	32,510	22,823
Other inventory supplies	15,752	17,613
Prepaid expenses and other current assets	1,911	4,491
Deferred tax assets	3,078	3,078
Total current assets	120,658	135,656
Property and equipment, net	122,560	120,931
Investments	2,000	2,000
Other assets	1,312	1,365
Total assets	246,530	259,952
Liabilities and stockholders' equity
Accounts payable	6,213	12,831
Accrued payroll	687	1,578
Accrued and other current liabilities	1,185	1,570
Corporate income and franchise taxes	303	612
Advance payments	414	9
Total current liabilities	8,802	16,600
Deferred tax liability	12,327	15,121
Total liabilities	21,129	31,721
Commitments and contingencies (Note 9)
Stockholders' equity
Preferred stock, $0.001 par value, 5,000,000 undesignated shares authorized, no shares issued or outstanding
Common stock, $0.001 par value, 45,000,000 shares authorized and 24,308,318 and 24,289,723 shares issued; 22,533,474 and 22,514,879 shares outstanding	24	24
Additional paid-in capital	332,617	332,119
Treasury stock, at cost, 1,774,844 shares	(12,148)	(12,148)
Accumulated other comprehensive loss	(11)	(50)
Accumulated deficit	(95,081)	(91,714)
Total stockholders' equity	225,401	228,231
Total liabilities and stockholders' equity	$ 246,530	$ 259,952

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities
Net income (loss)	$ (3,367)	$ 19,104
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization	2,941	2,021
Stock-based compensation	494	866
Deferred taxes	(2,794)
Changes in operating assets and liabilities:
Accounts receivable	20,352	(4,039)
Inventories	(9,431)	(77)
Other inventory supplies	1,996	(1,450)
Prepaid expenses and other assets	2,634	(255)
Accounts payable	(6,731)	(3,433)
Accrued payroll	(900)	(1,699)
Corporate income and franchise taxes	(299)	950
Advanced payments	405	1,799
Accrued and other current liabilities	(406)	2,446
Net cash provided by operating activities	4,894	16,233
Cash flows from investing activities
Purchases of property and equipment	(4,570)	(11,083)
Purchases of investments	(628)
Proceeds from sale of investments	10,800	737
Net cash provided by (used in) investing activities	5,602	(10,346)
Cash flows from financing activities
Proceeds from exercise of options	4	736
Restricted cash	43	(8)
Net cash provided by financing activities	47	728
Net effect of currency translation	(262)	(25)
Net increase in cash and cash equivalents	10,281	6,590
Cash and cash equivalents, beginning of period	4,290	16,073
Cash and cash equivalents, end of period	14,571	22,663
Supplemental disclosures of non-cash transactions
Unrealized (gain) loss on investments	$ (42)	$ 22

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Basis Of Presentation

3 Months Ended

Mar. 31, 2012

Basis Of Presentation [Abstract]

Basis Of Presentation

1. BASIS OF PRESENTATION

Interim financial data

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete consolidated financial statements and should be read in conjunction with Rubicon Technology, Inc.'s (the "Company") annual report filed on Form 10-K for the fiscal year ended December 31, 2011. In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the results of operations have been included. Consolidated operating results for the three months period ended March 31, 2012 are not necessarily indicative of results that may be expected for the year ending December 31, 2012.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	45,000,000	45,000,000
Common stock, shares issued	24,308,318	24,289,723
Common stock, shares outstanding	22,533,474	22,514,879
Treasury stock, shares	1,774,844	1,774,844

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Document And Entity Information	3 Months Ended
	Mar. 31, 2012	May 04, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Entity Registrant Name	Rubicon Technology, Inc.
Entity Central Index Key	0001410172
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		22,533,608

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Consolidated Statements Of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Consolidated Statements Of Operations [Abstract]
Revenue	$ 10,207	$ 37,970
Cost of goods sold	13,615	13,995
Gross profit (loss)	(3,408)	23,975
Operating expenses:
General and administrative	2,306	2,921
Sales and marketing	456	377
Research and development	476	427
Income (loss) from operations	(6,646)	20,250
Other income:
Interest income	33	87
Realized gain (loss) on foreign currency translation	342	(6)
Total other income	375	81
Income (loss) before income taxes	(6,271)	20,331
Income tax benefit (expense)	2,904	(1,227)
Net income (loss)	$ (3,367)	$ 19,104
Net income (loss) per common share
Basic	$ (0.15)	$ 0.83
Diluted	$ (0.15)	$ 0.80
Weighted average common shares outstanding used in computing net income (loss) per common share
Basic	22,514,539	22,993,614
Diluted	22,514,539	23,943,644

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Significant Customers

3 Months Ended

Mar. 31, 2012

Significant Customers [Abstract]

Significant Customers

6. SIGNIFICANT CUSTOMERS

For the three months ended March 31, 2012, the Company had two customers that individually accounted for approximately 45% and 10% of revenue, respectively, and for the three months ended March 31, 2011, the Company had three customers that individually accounted for approximately 30%, 20%, and 18% of revenue, respectively.

Customers individually representing more than 10% of trade receivables accounted for approximately 73% and 89% of accounts receivable as of March 31, 2012 and December 31, 2011, respectively. The Company grants credit to customers based on an evaluation of their financial condition. Losses from credit sales are provided for in the financial statements.

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Related Party Transactions

3 Months Ended

Mar. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

5. RELATED PARTY TRANSACTIONS

In November 2008, the Company purchased 1,345,444 shares of Peregrine Series D-1 Preferred shares for a total of $2.0 million, which represents less than 1% of Peregrine's shares outstanding. The terms and stock price of the purchase were the same as for the other investors who participated. Peregrine is a customer of the Company. For the three months ended March 31, 2012 and 2011, revenue from Peregrine was $4.6 million and $105,000, respectively. As of March 31, 2012 and December 31, 2011, accounts receivable from Peregrine were $3.9 million and $2.0 million, respectively.

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Commitments And Contingencies

3 Months Ended

Mar. 31, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

9. COMMITMENTS AND CONTINGENCIES

Purchase Commitments

The Company has entered into agreements to purchase equipment and components to construct furnaces. These agreements will result in the Company purchasing equipment or components for a total cost of approximately $4.8 million with deliveries occurring through August 2012. The Company has also entered into agreements related to the development of our facilities for a total cost of approximately $54,000.

Litigation

From time to time, the Company experiences routine litigation in the normal course of its business. The management of the Company does not believe any pending litigation will have a material adverse effect on the financial condition or results of operations of the Company.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

7. STOCKHOLDERS' EQUITY

Common Stock

As of March 31, 2012 the Company had reserved 2,091,079 shares of common stock for issuance upon the exercise of outstanding common stock options. Also, 2,243,279 shares of the Company's common stock were reserved for future grants of stock options (or other similar equity instruments) under the Company's 2007 Stock Incentive Plan (the "2007 Plan") as of March 31, 2012. In addition, 281,561 shares of the Company's common stock were reserved for future exercise of outstanding warrants as of March 31, 2012.

Warrants

For the three months ended March 31, 2012, no common stock warrants were exercised. At March 31, 2012 and December 31, 2011, there were 281,561 common stock warrants outstanding.

Treasury Stock

On August 4, 2011, the Company authorized a stock repurchase program to purchase up to $25.0 million of its common stock over a period of two years. The stock repurchase program authorizes the Company to repurchase its shares of common stock in the open market at times and prices considered appropriate by the Company depending upon prevailing market conditions and other corporate considerations. The treasury shares are accounted for using the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. The Company did not repurchase any shares during the three months ended March 31, 2012.

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Stock Incentive Plans

3 Months Ended

Mar. 31, 2012

Stock Incentive Plans [Abstract]

Stock Incentive Plans

8. STOCK INCENTIVE PLANS

The Company sponsored a stock option plan, the 2001 Plan, which allowed for the granting of incentive and nonqualified stock options for the purchase of common stock. The maximum number of shares that may be awarded or sold under the 2001 Plan was 1,449,667 shares. Each option entitles the holder to purchase one share of common stock at the specified option exercise price. The exercise price of each incentive stock option granted must not be less than the fair market value on the grant date. At the discretion of management and with the approval of the Board of Directors, the Company granted options under the 2001 Plan. Management and the Board of Directors determined vesting periods and expiration dates at the time of the grant. On August 2, 2011, the plan expired.

In August 2007, the Company adopted the 2007 Plan, which allows for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and bonus shares. On June 22, 2011, the shareholders of the Company approved an amendment to the 2007 Plan to increase the maximum number of shares that may be awarded or sold under the 2007 Plan by 2,100,000 from 2,307,692 to 4,407,692 shares. The Board of Directors has appointed a committee to administer the plan. The plan committee determines the type of award to be granted, the fair market value, the number of shares covered by the award, and the time when the award vests and may be exercised.

The Company uses the Black-Scholes option pricing model to value stock options issued after January 1, 2006. The Company uses historical stock prices of companies that it considers as a peer group as the basis for its volatility assumptions. The assumed risk-free rates were based on U.S. Treasury rates in effect at the time of grant with a term consistent with the expected option lives. The expected term is based upon the vesting term of the Company's options, a review of a peer group of companies, and expected exercise behavior. The forfeiture rate is based on past history of forfeited options. The expense is being allocated using the straight-line method. For the three months ended March 31, 2012 and 2011, the Company recorded $453,000 and $822,000, respectively, of stock compensation expense. As of March 31, 2012, the Company has $4.5 million of total unrecognized compensation cost related to non-vested awards granted under the Company's stock-based plans that it expects to recognize over a weighted-average period of 2.61 years. The Company accounts for options issued prior to January 1, 2006 under the intrinsic value method.

The following table summarizes the activity of the stock incentive and equity plans as of March 31, 2012 and changes during the three months then ended:

	Shares available for grant			Number of options outstanding			Weighted- average option exercise price		Number of restricted stock and board shares issued
At December 31, 2011		2,259,999			2,093,108		$	13.45		42,587
Granted		(25,845	)		8,500			9.39		17,345
Exercised		—			(1,250	)		4.01		—
Cancelled/forfeited		9,125			(9,279	)		18.05		—
At March 31, 2012		2,243,279			2,091,079		$	13.42		59,932

The Company's aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company's common stock. Based on the fair market value of the common stock at March 31, 2012, there is no intrinsic value for options outstanding and exercisable. The weighted average fair value per share of options granted for the three months ended March 31, 2012 was $9.39 and the fair value of each option grant was estimated at the date of grant using the Black-Scholes option pricing model using an expected term of 5.3 years, risk-free interest rates of 0.83% expected volatility of 52% and no dividend yield. The Company used an expected forfeiture rate of 16.59%.

For the three months ended March 31, 2012 and 2011, the Company recorded $41,000 and $43,000, respectively, of stock compensation expense related to restricted stock.

A summary of the Company's non-vested options during the three months period ended March 31, 2012 is presented below:

	Options			Weighted- average exercise price
Non-vested at January 1, 2012		1,313,177		$	15.42
Granted		8,500			9.39
Vested		(337,475	)		12.28
Forfeited		(8,875	)		18.14
Non-vested at March 31, 2012		975,327		$	16.44

An analysis of restricted stock issued is as follows:

Non-vested restricted stock as of December 31, 2011	1,931
Granted	17,345
Vested	(1,931	)
Non-vested restricted stock as of March 31, 2012	17,345

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Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

Income Taxes

10. INCOME TAXES

The Company is subject to income taxes in the U.S. and Malaysia. In accordance with the provisions of ASC Topic 740 "Income Taxes", the Company assesses on a quarterly basis its ability to realize its deferred tax assets. The tax provision for the three months ended March 31, 2012 is based on an estimated combined statutory effective tax rate. The Company recorded for the three months ended March 31, 2012 and 2011, a tax benefit of $2.9 million and a tax expense of $1.2 million, respectively for an effective tax rate of 46.3% and 6.1%, respectively. For the three months ended March 31, 2012 the difference between the Company's effective tax rate and the U.S. federal 35% statutory rate and state 6.2% (net of federal benefit) statutory rate was primarily related to small profits recorded in the Malaysia operation for which the Company has a tax holiday and the reversal of a tax accrual for an uncertain tax position. For the three months ended March 31, 2011, the Company was subject only to state taxes due to a full valuation allowance and the Illinois State Legislature suspension of the use of NOLs.

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Statement of Income and Comprehensive Income [Abstract]
Net income (loss)	$ (3,367)	$ 19,104
Other comprehensive income:
Unrealized gain (loss) on investments, net of tax	42	(22)
Unrealized gain (loss) on currency translation	(3)	(1)
Other comprehensive income (loss)	39	(23)
Comprehensive income (loss)	$ (3,406)	$ 19,081

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Investments

3 Months Ended

Mar. 31, 2012

Investments [Abstract]

Investments

4. INVESTMENTS

The Company invests available cash primarily in investment grade commercial paper, corporate notes and government securities. The Company's short-term investments balance of $40.4 million as of March 31, 2012 is comprised of U.S. Treasury securities of $2.5 million, corporate notes and bonds of $12.9 million and commercial paper of $25.0 million. The Company's investments are classified as available-for-sale securities and are carried at fair market value with unrealized gains and losses recorded in accumulated other comprehensive income (loss).

The Company's long-term investment at March 31, 2012 consists of a $2.0 million investment in Peregrine Semiconductor, Corp. (a customer) Series D-1 Preferred shares and is accounted for as a cost method investment. The value is adjusted for impairment based on review of Peregrine's financial position. No impairment was noted as of March 31, 2012.

The following table presents the amortized cost and gross unrealized gains and losses on all securities at March 31, 2012:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Short-term Investments:
U.S. Treasury securities and agency (taxable)	$	2,500	$	—	$	—	$	2,500
Corporate Notes and Bonds (taxable)		12,909		—		4		12,905
Commercial Paper (taxable)		24,996		—		3		24,993
Total short-term investments	$	40,405	$	—	$	7	$	40,398
Long-term Investments:
Peregrine Semiconductor, Corp. Series D-1 Preferred shares	$	2,000	$	—	$	—	$	2,000

The following table presents the amortized cost, and gross unrealized gains and losses on all securities at December 31, 2011:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Short-term Investments:
U.S. Treasury securities and agency (taxable)	$	4,500	$	—	$	—	$	4,500
Corporate Notes/Bonds (taxable)		37,085		—		37		37,048
Commercial Paper (taxable)		8,992		—		12		8,980
Total short-term investments	$	50,577	$	—	$	49	$	50,528
Long-term Investments:
Peregrine Semiconductor, Corp. Series D-1 Preferred shares	$	2,000	$	—	$	—	$	2,000

The Company values its investments at fair value, defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard below describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company's fixed income available-for-sale securities consist of high quality, investment grade commercial paper, corporate notes and government securities. The Company values these securities based on pricing from pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. The valuation techniques used to measure the fair value of the Company's financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models, such as discounted cash flow techniques.

The following table summarizes the Company's financial assets measured at fair value on a recurring basis as of March 31, 2012:

	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash Equivalents:
Money market funds	$	5,243	$	—	$	—	$	5,243
Investments:
Available-for-sales securities—current
U.S. Treasury securities and agency		—		2,500		—		2,500
Corporate notes/bonds		—		12,905		—		12,905
Commercial paper		—		24,993		—		24,993
Total	$	5,243	$	40,398	$	—	$	45,641

The following table summarizes the Company's financial assets measured at fair value on a recurring basis as of December 31, 2011:

	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash Equivalents:
Money market funds	$	839	$	—	$	—	$	839
Investments:
Available-for-sales securities—current:
U.S. Treasury securities and agency		—		4,500		—		4,500
Corporate notes/bonds		—		37,048		—		37,048
Commercial paper		—		8,980		—		8,980
Total	$	839	$	50,528	$	—	$	51,367

In addition to the debt securities noted above, the Company had approximately $9.3 million and $3.5 million of time deposits included in cash and cash equivalents as of March 31, 2012 and December 31, 2011, respectively.