After a 2014 year full of hopes, the sapphire industry entered 2015 with a lots of uncertainties. Following a long period of depressed pricings and stagnating revenue, 2014 started with a welcome price recovery that lifted up the spirit of many industry players. But most of all, it was the prospect of a new killer application that had given reasons for optimism. And now again, Lens Technology is about to invest $620M in sapphire manufacturing: is it a new start of the sapphire industry?
Learn more by attending the 1st International Forum on Sapphire Market and Technologies on August 31st – September 1st in Shenzhen, CN - here
The announcement by GTAT and Apple in late 2013 of a more than $1 billion combined investment to set up the largest sapphire crystal growth facility in the world had raised hopes that adoption of sapphire in smartphones would rapidly reach a massive scale, with Apple setting up the pace and forcing its competitor to follow suit. Apple’s display cover and sapphire component suppliers Biel and Lens Technology also invested massively in 2014 for this opportunity and for the Apple Watch.
Yole Développement estimates that the combined sapphire-related investments at the two companies already exceeds US$600m. Various second tier cell phone OEM upped their efforts in sapphire developments and tried to beat Apple by announcing or introducing smartphone models with sapphire display covers ahead of the highly anticipated iPhone 6 announcement. This prompted various sapphire manufacturers in China to announce plans for significant capacity increases to serve this new market.
But the news that the iPhone 6 would not use a sapphire display cover, shortly followed by GTAT bankruptcy in October 2014 sent shockwaves in the industry and raised many questions:
- Is Apple still interested in sapphire and will the display cover glass opportunity ever materialize at a large scale?
- Is the technology ready?
- What will happen to the more than 2100 high capacity furnaces installed by GTAT and Apple?
- Are other cell phone OEM still considering sapphire for display cover applications?
- Can traditional applications such as LED or watch windows sustain more than 100 manufacturers?
- Could other applications emerge soon? If not how will consolidation affect the industry?
- Will China eventually dominate the sapphire industry?
Dr Eric Virey, Senior, Technology & Market Analyst at Yole Développement comments that recent developments in the supply chain show that investors and large companies are still willing to invest massively in sapphire. On May 27th, Lens technology announced that after an initial successful IPO of 10% of its shares in March 2015, the company, which now has a valuation in excess of US$13 billion, is attempting to raise another US$ 1 billion in a private placement and plans to use US$532m of the proceed to build a new sapphire facility in Changsha (CN). This amount will come on top of US$87m already invested in the facility. To be completed within 2 years, the project will propel the company cumulated sapphire investment to more than US$920 million and provide an annual capacity for 300 million camera lens covers, 240 million fingerprint reader covers and 30 million smartwatch covers. A few weeks before, Biel and its partners Roshow announced that they will double the capital of their sapphire joint venture in Inner Mongolia and increase the number of 80kg furnaces from 200 already installed in 2014 to 700 by the end of August 2015. Meanwhile, after almost doubling capacity in 2014, Aurora Sapphire is planning to double again in 2015, reaching a total numbers of furnaces close to 1400 units.
Such massive investments also fuel new hopes that the sapphire display cover opportunity might finally become a reality at Apple and other players such as Huawei within the next 2 years. This could ripple through the entire industry and provide GTAT creditor’s renewed hopes that a market could finally materialize for large volumes of the company’s ASF furnaces, with more than 2100 of those still seating at the Apple Mesa plant, eagerly waiting for new owners.
Under this context, Yole développement, the “More Than Moore” market research, technology and strategy consulting company, proposes to exchange and debate during the 1st International Forum on Sapphire Market & Technologies, on August 31st and September 1st , 2015. This Forum is hosted by CIOE and will take place in Shenzhen, alongside The 18th China International Optoelectronic Expo 2015.
Both partners have set up a high added-value program including sessions on: sapphire market, technologies and supply chain – established and emerging sapphire applications - crystal growth - manufacturing technologies…
Confirmed speakers include: Huawei, Aurora Sapphire, GTAT, Monocrystal, Meyer Burger, Unionlight, Arc Energy, Silian, Saint-Gobain Crystals, Namiki, DK-Aztek etc…
“This 1st International Forum on Sapphire Market & Technologies is a must for all sapphire industry managers as well as for sapphire users in order to network and learn about all the latest industry trends”, comments Eric Virey from Yole.
The Yole & CIOE sapphire forum will bring together a world class panel of experts. It will allow participants to get valuable insights into the status and future of the sapphire industry. Moreover, the Forum will provide unprecedented opportunities for meetings with industry leaders. Make sure you will attend the Sapphire Market & Technologies Forum: Save the date and register today! REGISTER
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.
The China International Optoelectronic Exposition (CIOE) is a worldwide renowned exhibition, which presents the most advanced optoelectronic technologies and innovations. CIOE was established in 1999 in Shenzhen. This event has been held annually for the past 16 years at the Shenzhen Convention and Exhibition Center. The total exhibition space for 2014 event is about 110,000 square meters. As the world's largest optoelectronic industry expo, it has been a UFI-approved event since 2007. For more details on CIOE, please visit http://www.cioe.cn.