The second half of 2010 faces shortage conditions that should be resolved in 2011…

A comprehensive survey of the main market metrics and companies involvement in sapphire materials for electronic applications Feb. 9th, 2010 – Yole Développement updated its new markets & technological study dedicated to

sapphire industry. Yole’s report details major market metrics of the current and projected sapphire device and substrate business, describing the targeted applications, the key players, the supply‐chain, the volumes and related market size of each segment. Yole Développement’s analysis gives an estimation of the total market size from 2005 to 2013, highlighting

the strengths and weaknesses of sapphire materials industry. It also describes the current challenges of this market including the shortage risk at wafer level.

 

Sapphire material market will exceed $200M in 2010 despite the downturn

Sapphire product is serving mainly 2 applications in the electronics field: GaN‐based LED and RF devices, both for mobile phones (Silicon‐on‐Sapphire “SoS” technology). The sapphire substrate market for electronic applications has reached a market volume of approximately 9 million wafers (2” equivalent) for LED augmented by some 10’s of thousands 6” and 8” wafers for SoS RF applications in 2009. Despite the 2009 economic situation and thanks mostly to LCD LED backlight applications, the c‐plan sapphire wafer market grew +4% over 2009 compared to 2008 in the LED segment. On the other hand, r‐plan sapphire business for SoS applications has been strongly affected by the recession as the main application markets are related to consumer appliances (mainly mobile phones). “As a result, a ‐55% revenue decline has been observed on the r‐plan side”, says Dr Roussel, Project Manager at Yole Développement.

2” sapphire price as low as ever but shortage risk could generate turbulence

The price pressure on 2” remains critical and Yole Développement’s models showed that most of the suppliers are having a very tiny margin on that material and some of them are even losing money in that business. The 2” price level, especially in Taiwan, was extremely low and the psychological $10 threshold has probably been reached. “We are forecasting a ~ 5% price increase across the board. However, just like for cores, it will be unevenly distributed through the different diameters, with 2" price to increase up to 40% in 2010 while, on the other hand, we expect 3" and 4" price to remain stable compared to their low of 2009 and actually decrease another 20% compared to their ASP through 2009”, explained Dr Roussel. Indeed, Yole’s Demand‐Capacity analysis shows a “risk‐zone” that should occur during the second half of 2010, where all the planned capacity won’t be fully installed, facing a demand in LED that can create some turbulence. Now, Yole Développement feels comfortable saying that this stress period should end early in 2011 with the full ramp‐up of sapphire producers.

Companies listed in this report Acme Corporation, Alpha Crystal, Amberwave, Apeks, Arc Energy, Aixtron, Astek, Atlas, Azzurro Semiconductors, Bluglass, Comadur, Ching Mei Crystals, CREE, Crystal Applied Technology, Crystal GmbH, Crystal On, Crystal Q, Crystal Systems, Crystal Wise, Cyberstar, Epistone, Exiton, Fujimi, Group IV semiconductor, Gavish, Hrand Djevahirdjian, Hitachi ME, Honeywell, Iljin Display, International Rectifier, Impex, Insaco, Interoptec, Juropol, Kyocera,

Lattice Semiconductor …

Authors

• Philippe Roussel holds a Ph‐D in Integrated Electronics Systems from the National Institute of Applied Sciences (INSA) in LYON. He joined Yole Développement in 1998 and is leading the Compound Semiconductors and Power Electronics techno‐economical market analysis department.



• 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.



Sapphire 2010 report

Catalogue price: Euros 3,990 Publication date: February 2010

For special offers and price in dollars, please contact David Jourdan (jourdan@yole.fr or +33 472 83 01 90).

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