2014-03-11 13:41:30 - Lyon, France - March 6, 2014 – The sapphire industry recently ended an 18 month period of depressed pricing and achieved US$936 million in revenue for wafer products. Recovery was helped by an increase in LED demand due to growing adoption in general lighting and a resilient LCD backlight market. “But the saving grace was new consumer electronic (CE) applications: camera lens and fingerprint reader covers, mostly driven by Apple in 2013” explains Eric Virey, Senior Analyst at Yole Développement. Overall, the growth in wafer demand will be enough to justify a capacity increase toward the end of 2014.
For the longer term, Yole Développement analysed opportunities of alternative LED substrates (GaN and Si) but concluded that sapphire will retain > 90% of the market through 2020.
… .” We therefore expect prices to stabilize by the end of the year. Due to strong competition, finishing companies didn’t pass the higher material costs on to their customers. Wafer prices remained stable in 2013 but will go up slightly in Q2-2014. For PSS, which now dominates with 85% penetration rate, prices could increase faster as supply currently falls short of demand in Taiwan”, says Eric Virey, Yole Développement
The French consulting company Yole Développement releases this month its Sapphire Applications and Market: From LED to Consumer Electronics report. This technology & market report provides a detailed analysis of the status and prospect of the sapphire industry including recent trends and market drivers in established and emerging applications. It describes and analyses why Apple and GTAT are investing more than US$1 billion in sapphire manufacturing…
Moreover, Yole Développement’s analysis includes drivers for adoption of alternative LED substrates (GaN and Si), sapphire supply and demand trends. In this report, Yole Développement identifies key players (established and emerging companies), with geographic trends and specificities
After almost 2 years of losses, core prices increased by more than 50% in 2013; tier-1 sapphire vendors are
finally selling at prices close to breakeven costs. After a short pause, Yole Développement expects the uptrend to resume through Q2 and Q3. But leading vendors’ interests are not to increase prices above levels that would allow tier-2 competitors to generate a profit as well We therefore expect prices to stabilize by the end of the year.
Due to strong competition, finishing companies didn’t pass the higher material costs on to their customers. Wafer prices remained stable in 2013 but will go up slightly in Q2-2014. For PSS, which now dominates with 85% penetration rate, prices could increase faster as supply currently falls short of demand in Taiwan says Eric Virey, Yole Développement. This will continue until leading suppliers increase capacity and emerging players in China ramp up and enter the supply chain later in 2014. Overall, sapphire prices should stabilize by the end of 2014 and start decreasing again in late 2015 as the industry keeps improving its cost structure.
The report provides historical price trends and forecasts for cores and wafers, detailed capacity and revenue analysis, rankings and market share, as well as a thorough supply vs. demand analysis.
… And Apple could completely transform the industry in 2014!
Sapphire has been used for years in various luxury cell phones. In 2013 Yole Développement indicated that adoption in more accessible models could start in 2014. This just happened with the introduction by Gionee of the first “non-luxury” (<$1000) smartphone to feature a sapphire display cover. If adopted by leading cell phone OEMs for their flagship models, total sapphire demand could increase by up to 2x by the end of 2014 and 20x by the end of the decade.
On November 4th 2013, GTAT and Apple announced a partnership to set up a large sapphire manufacturing plant in Mesa, Arizona. Yole Développement thoroughly analyzed the deal and reached the conclusion that exiting 2014, the plant could reach a capacity equivalent of more than twice the current worldwide capacity. What for? Demand for home buttons and camera lens covers are expected to increase in 2014 and 2015, but even with aggressive forecasts for smart watches (and assuming that Apple uses sapphire for its own model which Yole Développement’s analysts don’t believe it will), the company could still tap into the existing supply chain to procure the sapphire it needs. It’s therefore difficult to justify this US$1 billion investment unless new applications requiring a lot of sapphire are coming to market. From our analysis, Yole Développement considers cell phone display covers to be the most likely outlet for this capacity.
Yole Développement modeled the Mesa operations and believe that the plant will make sapphire slabs that will then be sliced and polished by Apple subcontractors in China. The simulated slab cost of $6.40 per part would enable a US$17 cost per finished display cover, with a path for <$13 ASP in the midterm. The plant could deliver an equivalent of 42 million display covers in 2014 and more than 85 million in 2015.
The report includes a thorough analysis of the GTAT/Apple deal with everything Yole Développement knows and the remaining grey areas. It explains the rationale behind all key hypothesis of our cost model.
About Sapphire Applications and Market: From LED to Consumer Electronics report:
•Author: Eric Virey holds a Ph-D in Optoelectronics from the national Polytechnic Institute of Grenoble. In the last 12 years, he’s held various R&D, engineering, manufacturing and marketing positions with Saint-Gobain. Most recently, he was Market Manager at Saint-Gobain Crystals, in charge of Sapphire and Optoelectronic products.
•Catalogue price: Euros 5,990.00 (Full report - Multi user license, 380+ slides) – Euros 2,490 (Executive Summary, 20+ slides) – Publication date: March 2014.
For special offers and the price in dollars, please contact David Jourdan (firstname.lastname@example.org
or +33 472 83 01 90).
Aurora Sapphire (CN) ¸
Crystaland (CN) ¸
Crystal Applied Technology Inc (TW) -
Crystalwise (TW) - ¸
DK Aztec (KR) - DK
Hansol Technics (KR) 스
Iljin display (KR) - ´
Monocrystal (Ru) –
Namiki (JP) - ¤¾
Procrystal (TW) - ¸
Sapphire Technology (KR) -
Silian Sapphire Corporation (CN) - 司
Tera Xtal Technology (TW) - ¸
USI Optronics Corporation (TW) - ¸
Nanjing J-Crystal Photoelectric Science & Technology (CN) -
Crystal Optech - ¸
Unionlight Technology Co. Ltd (CN) - ¢
Guizhou Haotian Optoelectronic Technology (CN) -
(Guangdong) Saifei Sapphire (CN) - 司
(Zhejiang) Shangcheng Science & Technology (CN) - ¸
SSLM (KR) 엠
•List of companies and R&D institutions (non-exhaustive list) cited in this report
Aceplux Optotech, Aledia, AND, Apexcera, Apple, Asahi, Aurora Sapphire, Aurotek, Azzurro, Baltic Crystal, Biel, BIEMT, Bluestone, Bridgelux, Canyang, Chi Mei Opto, Corial, Corning, Cree, Crystal Applied Technology, Crystal Optech, Crystaland, Crystalwise, C-Sun, CT Lab, DK Aztec, Electech (ETI), Epilight, Epistar, Everland, Everlight, EVG, Exiton, Formosa epitaxy, GAPSS, GCL Opto, Genesis Photonic, Glo, GTAT, Guangdong Saifei Sapphire Technology, Hanmak, Hansol Technics, HTOT, HC Semitek, Hefei Crystalbridge, Hualeled, Huga, Hyperion Geocrystal, Iljin Display, Kama Crystal, KQT, Kyocera, Lammbos, Lattice Power, Lens Tech, Lextar, LG Innotek, LG Siltron, LGS, Lucemitek, Meyer Burger, Monocrystal, Namiki, Nanjing J-Crystal Photoelectric (NJC), Nantong Tongfan, Nationstar, Nichia, OCI, Osram-OS, Peregrine Semiconductor, Philips Lumileds, Plessey, Procrystal, Rigidtech, Rofin Lasag, Rubicon, Saifei Sapphire, Samsung, San Shi Semiconductor, Sanan, Sapphire Technology (STC), SAS, Seoul Viosys, Shangcheng Science & Technology, Shinkosha, Silan Azure, Silian Sapphire, Sinonitride, Soitec, Soraa, SSLM, Sumitomo Chemical, Sumitomo Metal Mining, SUSS MicroTec, Takatori, TDG Core, Tekcore, Tera Xtal (ACTC), theLED, Toyoda Gosei, Trinity Materials, TSMC, TXC, Tyntek, Ubilux, Union Light Technology, USI Opto, Walsin Lihwa, Yangzhou Zhongke.
About Yole Développement - www.yole.fr
Founded in 1998, Yole Développement has grown to become a group of companies providing marketing, technology and strategy consulting, media in addition to corporate finance services. With a strong focus on emerging applications using silicon and/or micro manufacturing, Yole Développement group has expanded to include more than 50 associates worldwide covering MEMS, Compound Semiconductors, LED, Image Sensors, Optoelectronics, Microfluidics & Medical, Photovoltaics, Advanced Packaging, Manufacturing, Nanomaterials and Power Electronics.
The group supports industrial companies, investors and R&D organizations worldwide to help them understand markets and follow technology trends to develop their business.