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Jan 24th, 2011
GT Solar sells $33 million in sapphire furnaces for LEDs to Korea's OCI
GT Solar International Inc., a U.S. solar equipment maker, received a $33.3 million order for sapphire furnaces from South Korean polysilicon provider OCI Co.
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Merrimack, New Hampshire-based GT Solar rose 19 cents, or 1.8 percent, to $10.97 at 1:20 p.m. in Nasdaq Stock Market trading.

This is GT Solar’s third order in two months for its furnaces, following sales in December to two Chinese manufacturers entering the synthetic sapphire market, the company said today in a statement.

The furnaces are used to grow sapphires, which are used in light-emitting diodes, or LEDs.

OCI agreed in December to buy $47.3 million in polysilicon reactors from GT Solar, its longtime supplier of equipment for making silicon ingots for solar cells. OCI purchased Jan. 18 the Chicago-based renewable energy project developer CornerStone Power Development LLC.

Shares of Rubicon Technology Inc., the largest U.S. maker of sapphires, fell as much as 6.3 percent on the prospect of new competition in the synthetic gemstone market. The Bensenville, Illinois-based company was trading down 93 cents, or 4.48 percent, at $19.82 at 12:20 p.m. in Nasdaq Stock Market trading, the stock’s lowest level since Dec. 21.

New Competition
OCI said yesterday that it would spend KRW 100 billion ($89.2 million) to build a plant in Jeonju, South Korea, to make sapphire ingots for the LED market. Construction is expected to begin in April with production starting in September.

Today’s order will give OCI the capacity to make the equivalent of 2.7 million 2-inch sapphire wafers, Andrew Huang, an analyst at Atlanta-based Sterne Agee & Leach Inc., estimated in a research note today. This compares to Rubicon’s annual capacity, which he expects to reach 10 million 2-inch equivalents by the end of 2011.

“The ability for a new entrant to add roughly 25 percent of Rubicon’s total capacity in one year reinforces our view that the barriers to entry to the sapphire industry are coming down,” Huang said.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net.


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