Taiwan LED companies lead demand for sapphire wafers

The market for sapphire materials in electronic applications looks set to reach $400 million by 2012, according to a report by Yole Developpement. Sapphire materials serve two main applications in the electronics field: GaN-based LEDs, and RF switch devices for mobile phones.

Sapphire is used as the starting material for the growth of nitride-based LEDs. Many companies use 2-inch wafers, while some use 3- or 4-inch substrates, and 6-inch manufacturing is on the horizon.

Yole Développement says that the sapphire substrate market for electronic applications has reached a market volume in 2007 of 4.61 million wafers (2-inch equivalent) for LED manufacturing, augmented by several tens of thousands of 6-inch wafers for silicon-on-sapphire (SoS) RF applications.

For LED manufacturing, the sapphire business is suffering huge price pressures in the main Asian regions. With LED die-on-wafer now sold for between 2 and 3 cents, LED producers are requesting sapphire substrates down to $17 for a 2-inch 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-inch wafers is growing rapidly, along with the recent announcements of some major companies such as Osram and Showa Denko to migrate part of their production to the larger diameter substrates. Plans for 6-inch nitride LED production have been announced by Samsung, and 8-inch c-plan sapphire has been demonstrated by Monocrystal, a leading supplier.

Five of the top ten sapphire suppliers are in Asia, which accounted for 67% of revenue, according to Yole. Asian countries also consume a huge proportion of the total sapphire inventory, with Taiwanese companies accounting for 58% of total sales and Japanese companies accounting for a further 19%.

Yole says that Kyocera is still the leading sapphire vendor on a global basis, with Namiki and Rubicon completing the top 3 in 2007. However, the acquisition in March 2008 by Energomera Group, Monocrystal’s parent company, of another Russian company, Atlas, has created another major supplier. Meanwhile, in April 2008, Honeywell exited the sapphire business, selling its Canadian plant to Chinese SilianTech.

The Yole report provides a complete analysis of the 2 main applications for sapphire substrates, along with key market metrics, and describes the involvement of the major material suppliers.

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