Sapphire Substrate Market 2008

Sapphire product is serving mainly 2 applications in the electronics field: GaN-based LED and RF switch devices for mobile phones.

The sapphire substrate market for electronic applications has reached a market volume of 4.61 Million wafers (2″ equivalent) for LED augmented by several 10' s of thousands of 6″ wafers for SoS RF applications in 2007.

The overall sapphire material market is expected to grow at a +21% annual growth rate to $402M by 2012 (Fig. 1).

Nitride LED has been the main driver for the sapphire business for several years, today exhibiting a +15% CAGR to 2012 and a $100M+ revenues in 07.

Silicon-on-Sapphire (SoS) applications have ramped-up since 2006 with Peregrine take-off and have shown a tremendous start. 2007 revenue at the substrate level was in the sub-$35M range but is anticipated to cross the $100M line in 2011.

Sapphire business for the LED market is suffering from the huge pressure on prices in the main Asian regions. With a LED die-on-wafer now sold between 2 and 3 cents on the market the LED producers are requesting sapphire substrates down to $17 for a 2″ wafer. This situation has forced some sapphire producers to leave these regions to focus on western countries where market prices are more attractive. Demand for 4″ wafers is currently booming along with the recent announcements of some major companies such as Osram and Showa Denko to migrate part of the production to the larger diameter substrate. Plans for 6″ nitride LED production have been announced by Samsung in Sept. 08 and 8″ c-plan sapphire has been demonstrated by Monocrystal.

SoS Ultra-CMOSR technology is gaining momentum in the cell-phone business, trying to shift the established switch technologies such as PiN diodes and GaAs pHEMT.

Asia is collecting about 67% of the sapphire business revenues thanks to 5 leading companies of the TOP10 ranking. Monocrystal and Saint-Gobain are positioning Europe with 20% of the total revenues. North America sapphire business (~13%) is mainly driven by Rubicon activities.

Sapphire for LED usage is concentrated in Asia with more than 88% of sales. Taiwan solo is representing 58% of the demand and Japan is covering 19% of the substrate consumption (Fig. 2).

Sapphire for SoS-based devices was originally located in Australia, but is now moving to Asia as Peregrine is becoming fab-less and has inked several agreements with Korean semicon fabs to outsource the production.

Kyocera is still the #1 vendor on a world basis with estimated sales in 2007 of $100 M for both electronics and optical materials. Namiki and Rubicon are challenging Kyocera in the TOP 3.

Sapphire business is buoyancy very active market where M&A' s are crossing new entrants and companies exiting the business. The most significant recent news: Energomera Group (Monocrystal' mother company) acquisition of Russian compatriot Atlas that will place the company firmly in the TOP 3 suppliers and Honeywell tending to exit the sapphire business selling its Canadian plant to Chinese SilianTech (April 08).

This report provides a complete analysis of the 2 main applications targeted by the sapphire substrates along with key market metrics. It describes the involvement of the major material suppliers and gives a snapshot of the sapphire industry playground.

The report presents the $ and unit values on the 2005-2012 time scale for the GaN-based LED and SoS-based RF devices and their equivalence in substrate consumptions and related material market size.

• Analysis of the structure of the sapphire industry and evolution of the industrial food chain
• CCalculation of substrate volumes to be produced for every market segments
• Status of diameter currently in use and transition forecasted in the future

• Analysis of the current applications and detailed analysis of the future businesses
• Analysis of the competition from large companies to small start up
• Volume and price forecasts