Secure payment on i-micronews Contact Yole Développement for I Micronews reports

RSS I-micronewsYole Dévelopement on TwitterYole Développement on Google +LinkedIn Yole pageSlideshare Yole Développement I-Micronews

Sapphire Applications & Market 2015: from LED to Consumer Electronics

5 990 €

Choose a minimum of three reports from Yole Group and receive a discount of at least 36% on your package – Contact us!



couv flyer Sapphire Applications and Market 2015After a false start in 2014, will Apple finally use sapphire display covers in 2016?


In 2014, Apple, its partners and their suppliers spent close to US$2B to set up a sapphire display cover supply chain. GTAT built and installed 2135 ASF furnaces, while Biel and Lens deployed close to 200 wire saws and thousands of finishing tools and ancillary equipment. But the projects faced many problems and Apple eventually gave up on sapphire for its iPhone 6. The many reasons can be summarized as “too early, too fast, too much”. The project was ambitious in its timeframe and targeted outputs while many of the necessary processes and technologies in crystal growth and finishing were still at an early stage of development.

Yet the venture still set the stage for the future: the partners have developed unrivalled expertise on how to work with sapphire in high volumes and a cost-controlled environment. A lot was also learned with the manufacturing of the complex 3D-shaped Apple Watch cover.

In 2015, Apple will still represent 20% of global sapphire consumption with its iPhone and watch components. Lens Technology recently announced plans to raise US$942M and invest US$532M of the proceeds to further increase sapphire growth and finishing capacity. But the question remains: why use sapphire?

At more than 5x the cost of glass, benefits in term of breakages are still far from obvious and high reflectivity washes out displays. Sapphire won’t sell for a premium and increase Apple market share just on glamour and cachet. If the company eventually adopts sapphire, it means that it would have either demonstrated that it can improve breakage resistance vs. glass and/or develop entirely new functionalities enabled by some unique properties of sapphire. To exist and thrive, the display cover market needs Apple to take the lead and to succeed. Besides Apple, only Huawei seems in a position to lift this market up, although not to the same level. But alternative technologies are emerging, for example with various OEM covers providing their phones with superior scratch resistance.

The report investigates the recent trends on this market, including cost structure, investments and alternative technologies. 

2015 material consumption breakdown per applications Sapphire report

In 2015, LED still represents 76% of sapphire consumption but oversupply affects revenue and profitability.

Capacity has been increasing non-stop since 2009, despite prices being at or below cost for most suppliers since late 2011. The market is oversupplied by a 2-3x factor depending on product category. But the situation is complex: tier 1 vendors often operate at high utilization rates and keep increasing capacity whereas tier 2 operate at low utilization rates or not at all. Companies such as BIEMT and Sumitomo Metal Mining recently disappeared or exited the business. But the big winners for 2014 were Monocrystal, Aurora, Namiki, Rigidtech and Crystalwise, which all managed to increase volumes and revenue. Global revenue from core, bricks and wafers reached US$1.1B. Adding finished components produced by Biel, Lens, Crystal Optech and others, revenue reached $1.8B with a notable performance from Saifei which supplied the Kyocera Brigadier’s sapphire display cover.

Under strong price pressure, the sapphire industry successfully reduced costs – but prices are falling even faster. An 18% average selling price decrease in 2015 wiped out potential gains from a 16% volume increase in LED wafer shipments. We expect prices to keep decreasing, resulting in an LED wafer market remaining essentially flat in revenue despite a 5.2% CAGR increase in volume expected through 2020. Optical wafers will hardly help if our scenario of Apple phasing out its current sapphire fingerprint reader technology for an “In Display” fingerprint sensor materializes in 2018. 

Finished patterned sapphire substrate price per unit surface

Who will set up capacity for Apple display covers?

As of July 2015, Apple is still actively working on the sapphire project and investigating the supply chain but hasn’t yet made a final decision. Our working assumption is that the company will launch a sapphire iPhone model in 2016. We estimate that this would require ~100M sapphire display covers over the year. We doubt that Apple will invest again in the supply chain the way it did with GTAT. This means that one or more suppliers need to step up and invest massively in growth capacity for a market that might or might not materialize. Despite the risk, many companies in China have announced large investments. Beside Aurora, DARX, EGing, Kingsun, Sunphire, and many more, Biel and Lens seem the most credible for now. Established sapphire makers have strong expertise and favorable cost positions but would need back up from investors or strategic partners to increase capacity. Whoever the winners are, the timeframe for a 2016 release is short. Capacity would need to be in place by spring 2016. The ~2,400 ASF furnaces available from GTAT and its affiliates remain an option worth considering. The current 165kg process cannot deliver the cost initially targeted by Apple but could still be competitive. But Kyropoulos is a moving target: Monocrystal just unveiled a 300kg process. Other technologies such as VHGF, EFG or ARC Energy’s new 300kg CHES design could also compete.

If the opportunity materializes, the sapphire market could increase more than 6x within the next 2 years. Otherwise, many suppliers that have been kept on life-support by investors or parent companies in the hope of seeing the market come to life will disappear rapidly. For now, brute force strategies are paying off: the survivors appear to be companies that can ship large volumes, sustain depressed pricing and maintain the ability to invest and position themselves for future growth while the weaker players disappear.

2014 sapphire companies revenue ranking sapphire report
What’s new

  • Status of the sapphire industry evolution vs. 2014
  • Recent capacity expansion plans, focus on China
  • 2014 wrap up: winners and losers
  • Sapphire display covers: do they make sense? Reviews of the pros and cons
  • Display cover manufacturing cost: where do we stand? What’s achievable and what’s not
  • Alternative technologies
  • Detailed analysis of Apple Sapphire ecosystem
  • How can Apple rebuild its supply chain to support display cover applications

Report objectives

The report provides a detailed analysis of:

  • The status and prospects of the sapphire industry for LED, camera lens & fingerprint reader covers, smartwatch & smartphone displays
  • Trends and drivers in established and emerging applications
  • Apple’s ecosystem and supply chain & Options for a sapphire iPhone launch in 2016
  • Sapphire supply & demand: Why so much capacity? Where are prices headed? What’s the impact on revenue? Who will survive?
  • The key players (established and emerging)
  • Geographical trends and characteristics
  • Technology trends: crystal growth, wafer diameters, PSS

Table of contents

Product categories and applications covered in this report   p5
Executive Summary  p7
•    The 3 page summary              
•    China dominates                      
•    Sapphire industry growth drivers: Historical perspective        
•    Application breakdown              
•    Consumer electronic applications
•    List of mobile devices with sapphire components
•    Smartwatches  
•    Sapphire display covers
•    2014 Sapphire company revenue
•    Sapphire supply and demand
•    LED applications
•    Alternative substrates 
•    Sapphire wafer forecast  
•    Core shipment forecasts  
•    What happened to silicon on sapphire?                    

Past year and Noteworthy News   p46

Introduction to the Sapphire Industry      p56
•    Industry Overview                  
•    Sapphire properties overview  
•    Sapphire properties vs. orientation
•    Value chain
•    Example: Sapphire wafer process
•    Material defects and slicing
•    Core / brick length 
•    Major industry players: crystal growth companies 
•    Major industry players: wafer slicing and finishing  
•    Major industry players: PSS                        
Status of the Sapphire Industry     p67

•    Price trends: cores for LED and optical wafers 
•    Material cost structure exemple: Aurora Sapphire
•    Price trends: Conventional sapphire substrates for LED
•    Price trends: Patterned sapphire substrates for LED (PSS) 
•    Discussion 
•    Price trends: bricks and optical wafers for consumer electronic 
•    2008-2020 price forecast
•    2014 top 20 Sapphire company revenue for core, bricks & wafers
•    Detailed breakdown by segment
•    Revenue structure: captive and open markets
•    2014 revenue breakdown for Core & bricks and polished wafers 
•    2014 revenue breakdown for optical and PSS wafers
•    Geographic breakdown per product category
•    Exchange rates impacts

Supply and demand analysis  p86

•    Definitions and metrics
•    Brick and core extraction
•    Geographic and product category geographic breakdown
•    Crystal Growth Capacity: 2012-2015 evolution by region
•    Crystal Growth Capacity: Top 20 ranking
•    Crystal growth technology breakdown (Q3-2015)
•    HEM furnaces
•    Finishing Capacity: 2012-2015 evolution by region
•    Finishing Capacity: Top 20 ranking
•    PSS Capacity: 2012-2015 evolution by region
•    PSS Capacity: Top 20 ranking
•    Material, finishing and PSS Supply vs demand
•    Attrition and consolidation
•    Why does capacity keep increasing?
•    Focus on China    / Taiwan / Korea / Europe / North America
•    Supply vs demand analysis: no sapphire display cover
•    Supply vs demand analysis: sapphire display cover adoption
•    Discussion

“Optical Wafers” market review and forecast: Camera lens, fingerprint readers and heart rate monitors covers p123 

•    Sapphire components at Apple  
•    Optical wafer manufacturing:      
•    Camera lens covers: overview and adoption trends                
•    Fingerprint reader covers: overview /     emerging technologies    / established technologies / alternative technologies    / sapphire use / adoption trends
•    Heart monitor sensor covers      
•    Optical Wafers 2012 -2020 volume and revenue forecast / ingot (core) forecast    

Smart watches market review & forecast   p138

•    Forecasting the Smartwatch market
•    Smartwatch volume forecast 2012-2020
•    Sapphire in Smartwatches: Apple Watch / other brands / sapphire adoption rate forecast
•    Sapphire smartwatch cover volume & revenue forecast
•    Sapphire covers design and slicing pitch
•    Smartwatch volumes and forecast

Sapphire display covers - market review and forecast     p148

•    Mobile devices display covers – Overview
•    Touch panels – technology overview
•    Display and touch sensor structures
•    Touch sensors and display panels supply chain
•    Display cover manufacturing process
•    Potential benefits of sapphire display covers: mechanical strength / dielectric constant
•    Putting sapphire to the test: GTAT vs Corning /    / impact of finishing process
•    Conclusions on mechanical testing
•    Major issues of Sapphire display covers
•    Summary
•    Current status
•    Apple sapphire patent portfolio overview
•    Which Strategy for differentiation?
•    Sapphire adoption trends
•    Display cover adoption scenario
•    Display cover adoption rate forecast 2015-2020.

Apple Sapphire ecosystem and strategy      p173

•    Apple supply chain: overview
•    2014 revenue from Apple
•    Optical wafers supply chain
•    Apple Watch supply Chain
•    Discussion
•    Display cover supply chain overview: GTAT, Biel and Lens.
•    GTAT – Apple partnership: what went wrong?
•    What’s next for GTAT and the mesa furnace
•    iPhone display covers: current status
•    Partial roll out in a premium model
•    Full roll out in major iPhone model(s)
•    Material supply chain requirements
•    Most significant capacity investments 2014-2016
•    Material capacity evolution 2014-2016
•    Who will supply Apple display covers?
•    Who will supply material for Apple display covers?
•    Conclusions
Crystal growth technologies for display covers      p198
•    Sapphire growth methods for display covers: KY etc…            
•    Sapphire technology – VHGF      
•    HEM CHESS                              
•    EFG Method                              
•    Orientation for display covers                        
Sapphire display cover manufacturing cost  p205

•    2014 cost model
•    Sapphire brick – GTAT ASF cost
•    Sapphire brick – Kyropoulos cost
•    Brick cost modeling Results
•    Discussions
•    Brick cost structure
•    Yields impact
•    Full display cover cost
•    Conclusions

Alternative technologies for display covers    p221

•    Strengthened glass - Gorilla glass
•    Alternative technologies – Coatings
•    Schott “Hard and clear” solution.
•    Alternative technologies – Exfoliation & laminates
•    Alternative technologies – DLC
•    Transparent ceramics: ALON TM & spinel

LED market overview  p229

•    LED market growth cycles
•    LED adoption trends per application
•    General lighting market segmentation and main drivers
•    Previous LED market forecast (2014)
•    Updated LED forecast
•    Discussion
•    LED bulb lifetimes
•    LED market Trends – Display

Alternative LED substrates p238

•    Gan-on-Si overview
•    GaN-on-Si cost of ownership
•    Gan-on-Si adoption
•    Key players and strategic positioning
•    GaN-On-Gan
•    Alternative substrates adoption forecast

LED Epitaxy (MOCVD) capacity trends      p245

•    Gan MOCVD capacity 2010-2015 evolution per region            
•    GaN MOCVD capacity supply vs demand trends                
•    Gan MOCVD Q3-2015 utilization rate per region                
•    Gan MOCVD Q3-2015 utilization rate in China                
•    Geographic breakdown and conclusions   
LED wafer market & forecast   p251

•    LED wafer forecast methodology
•    LED wafers value chain
•    Sapphire wafer consumption Q3-2015 geographic breakdown
•    Incentive for adoption of large diameter wafers
•    Challenges for the adoption of large diameter wafers
•    Q3-2015 Diameter breakdown per region
•    Q3-2015 Diameter breakdown – global
•    6” adoption and beyond
•    LED wafer diameter breakdown forecast 2012-2020.
•    2008-2020 sapphire wafer start by diameter
•    Patterned sapphire substrates – benefits
•    When are PSS used?
•    Pattern design
•    PSS manufacturing process overview
•    Lithography techniques for LED
•    Nano-Imprint Litography
•    PSS market: historical perspectives
•    Q3-2015 CSS and PSS consumption per region
•    PSS supply chain
•    2008-2020 CSS and PSS volume forecast
•    2008-2020 core shipment forecasts
•    2008-2020 LED wafer revenue forecast

LED filaments      p279

•    Overview                                
•    Filament material                      
•    Filament manufacturing process  
•    Performance and cost              
•    Analysis                                
•    LED filament 2012-2020 shipment and revenue forecast

Aurora Sapphire (哈尔滨奥瑞德光电技术股份有限公司)                p288

•    Overview
•    2011-2015 revenue and gross margins trends
•    Growth technology and cost control
•    2012-2015 ASP and gross margins trends per product
•    2012-2014 capacity and utilization rates trends
•    2015 capacity expansion plans
•    2012-2014 revenue by product & application
•    2014 revenue breakdown by product & application
•    2012-2014 revenue geographic breakdown
•    Major customers 2012-2014

LENS Technology (蓝思科技股份有限公司)      p301

•    Overview                                
•    Capacity                                
•    Revenue breakdown by product and customers            
•    Sapphire revenue breakdown  
•    Sapphire investment status and future plans      
Other Company Profiles    p309

•    BIEL Crystal (伯恩光学有限公司)
•    Biel-Roshow Sapphire (伯恩露笑蓝宝石有限公司)
•    Sapphire technology
•    Rubicon technology
•    Monocrystal
•    Saifei (广东赛翡蓝宝石科技有限公司)
•    Crystal Optech (浙江水晶光电科技股份有限公司)
•    NJC (南京京晶光电科技有限公司)
•    Kama Crystal


Companies cited

Aceplux Optotech
AND Corporation
Astra Crystal
Aurora Sapphire
Baltic Crystal
Bengbu North Technology
Biel Roshow
Crystal Applied Technology
Crystal Optech
DK Aztec
Electech (ETI)
Ever Lumin Incroporation
Focus Lighting
Formosa epitaxy
Fujian Crystal Technology
Fujian Sanan

Guangdong Saifei Sapphire Technology
Hansol Technics
Hualei LED
Huijing Optoelectronic
HC Semitek
Hyperion Geocrystal
Iljin Display
Insput Huaguang
JM Crystal
Kama Crystal
Lattice Power
Lens Tech
LG Innotek
LG Siltron
Meyer Burger
Nanjing J-Crystal Photoelectric (NJC)
Nantong Tongfan
Peregrine Semiconductor
Sapphire Technology (STC)
Seoul Viosys
Shangcheng Science & Technology
Silan Azure
Silian Sapphire
Sumitomo Chemical
Sumitomo Metal Mining
TDG Core
Tera Xtal (ACTC)
Toyoda Gosei
Trinity Materials
TXC Quartz
Union Light Technology
USI Opto
Vivo BBK
Yangzhou Zhongke
Zhuma Sapphire



  • List of applications analyzed: LED sapphire wafers and consumer electronics such as camera lenses, fingerprint readers, smartwatches and display covers
  • Forecasts per application from 2014­-2020 in units, $ and wafers
  • Detailed 2014 revenue analysis per product and region
  • Market share analysis and evolution of the competitive landscape
  • LED Market: MOCVD capacity & wafer start analysis and forecast, including data such as region and diameter
  • Supply and demand per product category: cores and bricks, sapphire wafers, PSS
  • Price trends & forecast
  • 2015-2020 volume & revenue forecast
  • Status of the sapphire industry: China, Taiwan, Korea, North America & Europe
  • Capacity analysis per region & product