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Brian Cascio

Accounting Branch Chief

United States Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Re:

EMCORE Corporation

Dear Mr. Cascio:

EMCORE Corporation (the “Company”) respectively submits the following responses to the comment letter dated January 28, 2011 that we received from the Staff of the United States Securities and Exchange Commission (the “Staff”) regarding the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2010 (the “Form 10-K”).  The Company’s responses below correspond to the captions and numbers of those comments (which are reproduced below in italics). Unless otherwise indicated, capitalized terms used below have the meanings assigned to them in the Form 10-K.

1.	Regarding the series of measures implemented in 2010 to align your cost structure with revenue forecasts, please tell us how your MD&A disclosure considers the guidance regarding restructuring plans from Question 4 of SAB Topic 5-P.

-	The Company did not exit, dispose, terminate, or relocate any business activities in fiscal 2010;

-	The Company did not materially change the manner or scope in which it conducted its business in fiscal 2010 when compared to fiscal 2009;

-

One-time employee termination benefits incurred in fiscal 2010 totaled approximately $230,000.  The total liability related to one-time employee termination benefits as of the beginning and end of fiscal 2010 each totaled approximately $226,000 and $180,000, respectively.  These amounts were considered immaterial to the Company’s fiscal 2010 consolidated financial statements.

-

In fiscal 2009, the Company initially recorded a $395,000 restructuring expense associated with a vacated leased facility that management expected to partially sublease.  In fiscal 2010, with no progress on subleasing this property, management changed the assumption from this property being partially subleased to an amended assumption that this facility would remain vacant over the remaining lease term through June 30, 2013.  In fiscal 2010, the Company recorded an additional $425,000 of restructuring expense associated with this facility due to the change in estimate.  The total restructuring liability related to this facility as of the beginning and end of fiscal 2010 totaled approximately $395,000 and $600,000, respectively.  These amounts were considered immaterial to the Company’s fiscal 2009 and fiscal 2010 consolidated financial statements.

2.

We see your history of losses.  Tell us whether you have long-lived assets you believe are at risk for impairment based on your most recent testing.  If so, please expand the related critical accounting policy disclosure in future filings to more specifically describe the nature of the assets at risk, the methods and key assumptions on which you based your evaluation and the degree of uncertainty associated with key assumptions.

 

3.

In future filings please more fully describe the material factors contributing to significant changes in revenues as referred to in your disclosure.  In that regard, please clarify the underlying factors responsible for the increase in Fiber Optic segment sales and, as applicable, please connect the discussion to specific products described in Item 1 Business.

 

4.

We refer to your agreement with Suncore Photovoltaics Co., Ltd.  With a view toward enhanced disclosures in future filings, please tell us when you are required to provide your 40% of contributed capital to the joint venture and how you anticipate funding any amount in excess of consulting fees you described on page 11.

-	The first installment consisting of one-third of the subscribed registered capital contribution amount by February 26, 2011;

-	The second installment consisting of two thirds of the subscribed registered capital contribution amount by August 26, 2011.

5.	As a related matter, please tell us why you did not include the required capital contribution in your contractual obligations and commitments table.

6.

We refer to your disclosures, such as on page 21, regarding the qualification process which customers must complete prior to accepting certain products manufactured at contract manufacturers.  With a view towards enhanced disclosures in future filings, please tell us how you consider the qualification process in your revenue recognition policy.

 

 

 

 

7.

We see you record service revenue for hardware repairs and calibrations, as well as government contract revenue.  We also see that gross margin on services has ranged from 46% in 2008 to 17% in 2010.  Please help us understand how you identify services revenues and the related costs of those revenues for purposes of the income statement disaggregation.  In the regard, please tell us:

·	The composition of services revenues in the periods presented and the reasons for the decrease in services revenues since your fiscal 2008 year end.

·	The reasons for the decreases in gross margins from services since your fiscal 2008 year end.

·	How you allocate and present revenues and related costs for products and services under bundled arrangements, if any.

·	How you distinguish government contracts between those reported as service revenue and those reported as cost reimbursements.

 

 

 

 

 

 

 

 

·	Activities performed in connection with the contractual arrangement qualify as research and development expense.

·	At the inception of the contract, the Company and the customer enter into the arrangement with the expectation that research and development expenses will be incurred in excess of amounts to be funded by the customer.

·	The contractual arrangement obligates the Company to perform only on a best-efforts basis to achieve the agreed-upon objectives, rather than to deliver a product or service meeting defined customer performance or other specifications.

·	The Company retains the right to the data and results of the research and development activities.

 

8.	Please tell us, with a view toward disclosure in future filings, the aspects of the solar panel and solar systems projects leading you to conclude that percentage of completion accounting is appropriate in your specific circumstances.

o	If an enforceable contract between the Company and its customer exists and the contract is within the scope of authoritative literature under ASC 605-35, Revenue Recognition – Construction-Type and Production.

o	If there is an ability to make reasonably dependable estimates of total revenue, total cost, and progress toward completion.

o	If successful completion of the long-term contract is probable and profitable.

o	If contract prices are fixed and collectability is reasonably assured.

9.

We refer to the 3,000,003 warrants you have outstanding as of September 30, 2010.  We see your reference on page 65 that you account for 1,400,003 of the warrants as equity and your further reference on page 67 that you account for 1,600,000 of the warrants as a liability.  Please tell us the material terms of the warrants you considered and how you have applied the guidance in FASB ASC 815 in evaluating whether the warrants should be classified as equity or liabilities.  Please provide a separate analysis for the warrants issued related to the private placement of common stock and the warrants related to the equity line of credit facility.

 

10.

Under FSAB ASC 330-10-35-14 and SAB Topic 5-BB, inventory impairment charges establish a new cost basis for inventories.  Accordingly, tell us why you believe it is consistent with GAAP to characterize inventory impairment charges as establishing “reserves.”  Also, with respect to the tabular disclosure, tell us why the reported “reserve” should not be netted against the amounts of the individual categories of inventory for financial reporting purposes.  Explain the basis in GAAP for your view.

Inventory (in thousands)		As of December 31, 2010			As of September 30, 2010
Raw materials	$	19,988		$	18,701
Work in-process		7,619			7,000
Finished goods		4,149			6,355
Inventory	$	31,756		$	32,056

11.	In future filings please also disclose the gross carrying amount and accumulated amortization for each major class of intangible asset.  Refer to FASB ASC 350-30-50-2.

Intangible Assets (in thousands)		As of December 31, 2010									As of September 30, 2010
			Gross Assets			Accumulated Amortization			Net Assets			Gross Assets			Accumulated Amortization			Net Assets
Fiber Optics:
Core Technology		$	15,555		$	(9,701	)	$	5,854		$	15,555		$	(9,275	)	$	6,280
Customer Relations			4,381			(1,751	)		2,630			4,381			(1,644	)		2,737
Patents			4,777			(4,083	)		694			4,725			(4,021	)		704
			24,713			(15,535	)		9,178			24,661			(14,940	)		9,721
Photovoltaics:
Patents			2,077			(1,013	)		1,064			1,941			(924	)		1,017
Total		$	26,790		$	(16,548	)	$	10,242		$	26,602		$	(15,864	)	$	10,738

 

12.	It appears you may have implemented restructuring plans in fiscal 2009 and 2010 and it appears the activity related to the plans maybe ongoing.  In that regard, please tell us the amounts of restructuring costs incurred in each year and how you considered the disclosures from FASB ASC 420-10-50.

Restructuring Accrual Accounts (in thousands)		Severance- related accruals				Restructuring-related accruals				Total
Balance as of September 30, 2010		$	180			$	600			$	780
Expense - charge to accrual			7				-				7
Payments on accrual			(50	)			(49	)			(99	)
Balance as of December 31, 2010		$	137			$	551			$	688

 

 

 

 

·	the Company is responsible for the adequacy and accuracy of the disclosure in the filing;

·	staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and,

·	the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities law of the United States.