Be the first to like this
Apple saved the sapphire industry in 2013 and will transform it in 2014. How will the revolution happen?
APPLE SAVED THE SAPPHIRE INDUSTRY IN 2013…
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. Overall, the growth in wafer demand will be enough to justify a capacity increase toward the end of 2014. For the longer term, we analyzed opportunities of alternative LED substrates (GaN and Si) but concluded that sapphire will retain > 90% of the market through 2020.
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, we expect 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. 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.
Report’s key features
• Detailed analysis of PSS manufacturing trends and supply chain
• Analysis of new consumer electronic applications: smart watches, camera lens and fingerprint reader covers and display cover
• Analysis of the GTAT / Apple partnership: capacity and revenue analysis, display cover manufacturing cost modeling.
• Detailed analysis of sapphire use for: LED, SOS, Camera lens & fingerprint reader covers, smart watches, display covers.
• Volume & revenue through 2019 for all applications
• Supply / demand, company revenue & capacity rankings
• Diameter and geographic breakdown, MOCVD capacity
• PSS supply chain and manufacturing
• Alternative substrates for LED: requirements, status, key player, cost of ownership modeling, penetration rates
• Detailed analysis of the GTAT-Apple deal: cost, capacity and revenue model
More infromation on http://www.i-micronews.com/reports/Sapphire-Market-LED-Consumer-Electronics/3/422/