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Sapphire substrate market to gain from emerging non-LED apps

Posted: 03 Jul 2013 ?? ?Print Version ?Bookmark and Share

Keywords:sapphire substrate? handset device application? SOS? window film?

The recent report from LEDinside, a research arm of TrendForce, has revealed that sapphire substrate makers have been hopeful about the emerging demand on non-LED market applications this year such as handset device applications, SOS and window film. In fact, there are still numerous manufacturers fighting for this non-LED market application with production plans despite the low market prices, added the market research firm.

Under the impact of oversupply in sapphire substrate market, the quality requirements from LED epi wafer manufacturers on sapphire substrate have become higher and higher. LED manufacturers are more willing to use sapphire ingot grown by KY method such that it became even more difficult for most newcomers to enter the LED supply chain. Therefore, except for first-tier manufacturers, the utilisation rates of the most sapphire ingot manufacturers have been below 50 per cent. However, ever since the introduction of sapphire substrate for camera lens by Apple's iPhone5, demands for sapphire substrates from non-LED applications have begun digesting part of excessive production thus bringing the sapphire substrate industry into a virtuous cycle.

According to the estimation by LEDinside, the oversupply ratio of sapphire substrate in 2013 has been as high as 18 per cent as compared to the demand from LED epi wafer manufacturers. However, it does show some sign of convergence as compared to the 24 per cent oversupply ratio in 2012. Looking ahead to the next few years, the oversupply issue of sapphire substrate will not be solved anytime soon, yet sapphire substrate manufacturers remain optimistic about the non-LED market applications in 2013 (such as SOS, window film, and handset device applications) such that they have planned for production expansions with the hope that emerging non-LED applications can digest these production capacity. In addition to demand from camera lens, if in the future the cover glass of smartphones is replaced by sapphire substrates, it will create rather enormous market demand that may lead to supply shortage in sapphire substrate industry.

The report added that the price declines of 2in and 4in sapphire substrate have slowed down in 1Q13, while there are even some signs on certain low market prices slightly rebound.

Benefited from lighting and backlight market demand in 1H13, LED chip manufacturers raised their utilisation rate, also encouraged sapphire substrate market demand. Besides, there are even some signs on certain low market prices slightly rebound. Take the price of 2in sapphire substrate (CSS) as an example, the price has come back to around $6.8?7. In addition, the 4in sapphire substrate (CSS) price stayed at $30 to $35. Although LED chip manufacturers consistently increased the 4in sapphire substrate production ratio, and raised the demand on 4in sapphire substrate, there is the room for sapphire substrate manufacturer to get the profit. Therefore, the recent 4in sapphire substrate price remained stable.

LEDinside further indicated that the sapphire substrate industry has a great production expansion plan for two years, which caused the oversupply situation in the industry. However, it is still difficult to solve the oversupply problem in the short term, if the sapphire substrate capacity is only digested by LED market application. Therefore, non-LED market demand has been generally getting much attention. Observed from every sapphire substrate manufacturer's expansion plan in 2013, most are increasing capacity for non-LED market application. Generally speaking, mergers and acquisitions still happen in the sapphire substrate industry. With increasing non-LED market demand, there might be chance to see a boom market trend in the sapphire substrate, which last happened in 2010.

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