Abstract
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Supply and demand back in check. Potential oversupply looming but market should self correct as many new entrants scale or pull back projects
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DESCRIPTION
SUPPLY AND DEMAND BACK IN CHECK
Following the massive material shortage in 2010, sapphire material and
finished wafer prices remained high through early 2011. The situation was
aggravated as wafer and LED manufacturers preparing for a massive intake of
LED in the LCD TV market started building up sapphire inventory for fear that
supply might remain short. But a softer than expected LED TV market and an
increasing sapphire capacity coming from established vendors worked together
to rapidly bring supply and demand back into balance this summer. This has
triggered a fast drop in wafer prices that have now returned to their
pre-shortage levels. While sapphire demand will pick up in late 2011 and early
2012, additional capacity from new entrants is expected to enter the supply
chain and keep 2” prices at their historical lows for the foreseeable
future. We forecast this low pricing to keep on running for the next coming
months....
2" Sapphire price trends
FEW NEW ENTRANTS WILL SUCCEED
Coupled with significant volume growth, the sapphire material shortage
experienced through 2010 and early 2011 have created a window of opportunity
for new entrants. In the last 18 months, more than 50 companies have announced
their intention to enter the industry and would bring the total number of
potential participants in this market to close to 100. More than 40 of those
new entrants are located in China. Looking at midterm, adding up the capacity
plans announced by those newcomers leads to a figure corresponding to almost
3x actual demand, a situation unlikely to actually materialize.
Evolution of Material Capacity on a world basis
(based on current status and announcements)
Most of the new entrants have little to no prior experience in sapphire
crystal growth and wafer manufacturing. While the availability of
“turn-key solutions” from various growth equipment suppliers has
lowered the barrier to entry, reaching and sustaining high quality and high
yields in sapphire crystal growth still requires significant expertise. The
learning curve can be steep for newcomers to reach yield levels on par with
established tier one manufacturers. Wafer finishing also requires unique
expertise and could prove challenging for companies with no prior experience.
Beyond wire saw manufacturers offering efficient slicing solutions and
process, not turnkey solution are available for wafer finishing.
The 2010 pricing environment was very forgiving and allowed some new entrants
to achieve comfortable margins despite low yields and subpar technology. We
calculated that many of those new companies have production cost in the $6-$10
/ mm of 2" core and will therefore lose money at the current market price. At
the same time, established vendors with higher yields, large volumes and a
more favorable product mix including large diameter wafers can achieve
production cost <$5 that will allow them to maintain positive margins and
weather the storm. Midterm, we expect that this situation will weed out the
weakest players and trigger the withdrawal of many potential new entrants.
TRANSITION TO LARGE DIAMETERS WELL UNDER WAY
Sapphire Substrates for LEDs: Diameter trends to 2012
The sapphire substrate industry, driven by LED applications, was initially
developed based on a 2” diameter platform. Companies like Lumileds and
Nichia were the first to move to 3” around 2003 while Osram pioneered
the adoption of 4” shortly after. Due to the large concentration of
MOCVD capacity in Taiwan, and the current ramp in China, 2” is expected
to remain the dominant platform through 2012.
But many established Taiwan based epitaxy companies are transitioning from
2” to 4” while some technology leaders in Korea, the United states
and Europe have already made great strides in the their 6” conversion.
Long term, a question mark remains regarding the economics of 8”. But
R&D has already started and we believe that recent improvements in sapphire
growth and slicing technologies could enable a cost of ownership that in time
will be compatible with the adoption of the platform.
INDEX OF COMPANIES (sample over 170+)
Sapphire makers:
Almecs, Alpha Crystal Technology , BIEMT, Blue Optical, Changzhi Hongyuan
Technology Crystal Co, Ltd, Crystal Applied Technology, DC Wafers, DJ laser,
ECEC (ZheJiang East Crystal Electronic Co), GCL, GT Solar, Haotian
Optoelectronics Technology Co, Harbin Gongda (Aurora Sapphire), Heifei
Crystalbridge , Optoelectronic Materials, Iljin Display, Jiaozuo City Crystal
Photoelectric, KCC, Kyocera, Lan Yu, Monocrystal, Namiki, NCB Network,
Neosemitech, NGC China Transmission, OCI, Darewin Opto, Rubicon, Rybinsk
Crystals, Saint-Gobain, San Chih Semiconductor, Sapphire Materials, Sapphire
Tech, SAS, Shinkosha, Silian, Siltron / LG, Sumitomo Metal Mining, Swiss
Wafers AG, Tera Xtal, Union Light technology, USI Opto (Acme Corporation),
Wafer Works, Zhenjiang Huantai Silicon Science and Technology....etc....
Crystal Growth Equipment Makers:
Apeks, Arc energy, Crystal Tech, Dai Ichi Giken, GT Solar, Omega, Pryroda
Engineering, Thermal Technology....etc....
Raw Material suppliers:
Haemaroo, KC Corporation, Sasol/Ceralox, EMT, RSA Le Rubis, Spolchemis,
Baikowski, Comadur, Nippon Light Metal, Sumitomo, Taimei Chemical, Zibo
Xinmeiyu, Heibei Pengda Advanced Material, Suzhou Crystal....etc....
BENEFITS:
REPORT FEATURE
Our extensive tracking of the Sapphire industry on a daily-basis, allows us to
provide a complete analysis of the sapphire substrates industry along with key
market metrics. This report provides updated volume and $ forecast for
finished wafers and material through 2020 along with capacity analysis, price
trends and new company profiles. In addition, an extensive review of the raw
material and crystal growth equipment suppliers is provided, offering the most
complete view of the Sapphire wafer industry available to date.
BIO:
Eric VIREY, Ph.D.
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 position with Saint-Gobain. Most
recently, he was Market Manager at Saint-Gobain Crystals, in charge of
Sapphire substrates and materials for optical telecoms.
ABOUT YOLE DEVÉLOPPEMENT
Beginning in 1998 with Yole Devéloppement, we have grown to become a group of companies providing market research, technology analysis, strategy consulting, media in addition to fi nance services. With a solid focus on emerging applications using silicon and/or micro manufacturing Yole Devéloppement group has expanded to include more than 40 associates worldwide covering MEM S, Microfluidics & Medical, Advanced Packaging, Compound Semiconductors, Power Electronics, LED , and Photovoltaic.
Table of Contents
- Sapphire Substrates Industry Overview
- Business models and characteristics
- 2010 revenue per company (material and finished wafers)
- 2011 Trends
- Sapphire Substrates for Nitrides LEDs Applications
- Market dynamics
- Material volume forecast
- Wafer volume and revenue forecast
- PSS wafers
- Sapphire Substrates for SOS Applications
- Industry trends
- Wafer volume and revenue forecast
- Sapphire supply and demand analysis.
- Sapphire suppliers database by geographic area
- Sapphire substrate technology aspects
- Sapphire manufacturing cost analysis
- Sapphire Growth Equipment market
- Equipment maker database
- Overview of the different technologies
- Equipment uptake trends
- Crucibles (Ir, Mo, W....)
- Sapphire Raw Material market
- Overview (specifications, type of material)
- Manufacturing technologies
- Supply chain and main players.
- Company Profiles:
- Established companies
- Emerging companies
