LED light panel manufacturer and supplier

LED demand in China has seen a significant increase, driving up sapphire substrate demand for five consecutive months, according to financial firm UBS.

Despite sizable growth in demand, average selling price (ASP) has not risen, but instead has slightly dipped for 2 inch and 4 inch sapphire. With LED epitaxial manufacturers not profiting, upstream sapphire substrate manufacturers are unable to increase prices.

Sapphire substrate demand in the Chinese market has increased, reaching 5 million pieces in April (2 inch convert), half for mobile device and LED application the other, said UBS. Demand for application in mobile devices increased by 85 percent last month, including smartphone camera lens cover, smartphone case, and home buttons. Demand for LED application increased 25 percent last month.

Taiwanese sapphire substrate manufacturers mainly respond to LED demand. Manufacturers including Ridgetech, Crystalwise Technology, and Terxtal are starting to expand production capacity in China on back of market growth, in order to evade 11 percent in import tax. Main clients include LED upstream epitaxial manufacturers such as Taiwan manufacturers Epistar and Genesis Photonics Inc. (GPI), Chinese manufacturer San’an Optoelectronics and HC SemiTek. Sapphire substrate manufacturer’s business is mainly in crystal ingot, slicing, and PSS. While Ridgetech focuses on more profitable PSS OEM, Crystalwise Technology and Terxtal do both PSS processing and less profitable sapphire ingot and slicing.

PSS substrate can increase LED luminous efficiency, said Ridgetech. PSS substrate percentage used by clients has already reached 90 percent and above. This has therefore spurred Ridgetech’s single month revenue to reach a new record high this year.

In response to client demands, Ridgetech has already planned to start production expansion in June, focusing on 4 inch PSS substrate as it is able to better save production costs for clients compared with 2 inch substrate by around 30 percent. The order momentum is expected to be relatively strong as a result. Legal persons estimate that Ridgetech 2Q14 revenue can reach a new record, with this year showing gradual quarterly growth.

Despite good sapphire substrate demand, UBS believes that sapphire substrate April ASP in China will dip compared to March to around US $20.

Epistar Chairman B.J. Lee expressed that due to the epitaxial manufacturers’ profits not showing any obvious rebound, upstream sapphire substrate is not easily able to increase in price.

Aside from sapphire substrate in LED application, mobile device market has also seen sizable growth.

Demand for sapphire substrate for application in smartphone camera covers, home button, and smartphone display glass has increased, driving up sapphire substrate demand in mobile devices by 85 percent in April in China. Apple has recently used sapphire glass in their new iPhone 6. Chinese mobile manufacturer Xiaomi and Coolpad also have plans to use the material in their mobile devices. If Taiwanese manufacturers are able to grab opportunities afforded by the rising sapphire demand, revenue in the second half of the year will be sure to increase substantially.

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