Sapphire substrate market on the up and up

ELECTRIONICS FIRMS can't get enough sapphire, according to a report which expects the market will grow 21 per cent annually to $402 million by 2012.

French firm Yole Développement, reckons in 2007, the market for gallium nitride (GaN) based LEDs reached a unit volume of 4.61 million wafers. This number is now predicted to grow at a 15 per cent compound annual growth rate until at least 2012, boosted by wafers for silicon-on-sapphire (SoS) RF switch devices in mobile phones.

SoS apps are also not thought to be in distress, as they make bigger strides in the cell phone industry, knocking switch technologies like PiN diodes and GaAs pHEMTs (pseudomorphic high electron mobility transistors) off their pedestals. In fact, according to Yole, revenue at the substrate level will exceed $100 million by 2011.

But that’s not to say that sapphire sales aren’t suffering a case of the blues somewhere in the world, and that somewhere happens to be Asia. With Asian pricing pressure on the up and LED die-on-wafer selling for only 2-3 cents in the region, makers of LEDs are now pushing hard to get sapphire substrates for as little as $17 for a 2-inch wafer.

Unhappy with having to sell their crown jewels off cheap, some sapphire suppliers have decided to shift their focus to Western markets instead, according to the report.

This could be a risky strategy, though, as Sapphire for LED usage is mainly concentrated in Asia (over 88 per cent of sales) and Asian suppliers have in the past dominated the sapphire market, snatching up approx 67 per cent of all its revenues. Europe follows with 20 per cent of revenues and the US takes only 13 per cent.

But the report notes optimistically there is huge demand for four-inch wafers and that recent announcements by big LED makers like Osram and Showa Denko indicate that they will be migrating some of their production to the larger-diameter substrate.

Also, just last month, Korean giant Samsung announced plans for six-inch nitride LED production.

So the future looks rock solid. µ

L’Inq
Sapphire Market 2008 Report