Reactive cathodic arc evaporation was carried out in an industrial deposition system with two-fold substrate rotation and the effect thereof on the structural and compositional
evolution of Ti-Al-O-N coatings was studied by combining scanning transmission electron microscopy and 3D atom probe tomography (APT). The formation of alternating O and N rich sublayers was identified by APT and can be understood by considering the substrate rotation-induced variation in plasma density and fluxes of film-forming species. The effect of plasma density and fluxes on the incorporation of reactive species was studied in stationary deposition experiments: preferred N incorporation occurs, when the growing coating surface is facing the plasma source and, thus, positioned in a region of high plasma density characterized by large fluxes of film forming-species, while preferred O incorporation takes place in a region of low plasma density where small fluxes are present, when the growing surface is blocked from the plasma source by the substrate holder. Hence, compositional modulations are caused by substrate rotation as the growing coating surface is periodically exposed to regions of high plasma density and large fluxes of film-forming species and regions of low plasma density and small fluxes. These findings are highly relevant for all reactive industrial plasma assisted physical vapor deposition processes utilizing substrate rotation.