China LED sapphire substrate market demand continued to decline, accounting

Insiders said that the sapphire industry into an increasing amount of Lizzie good time, and now this time, we maintain the view of the same, even the phone to protect the screen prospects, but also optimistic than we expected.

Blue Synopsys listed fund-raising soon after the start of additional projects, fund-raising 6 billion, of which 3.4 billion will be invested sapphire fields, while Byrne also continued an additional subsidiary to a joint venture specializing in the production of sapphire Byrne Roshow investment, Apple's two major glass processing providers are clearly determined more clearly Apple sapphire cover for mobile phones on the market than most people. Apple phones largest foundry Foxconn to enter the sapphire industry is determined to win, it is a strong signal.

This conclusion seems to be just on the price trend of the sapphire substrate we observed there is a conflict, the price of the 2-inch ingot fallen compared to nearly 50% over the same period last year, which is why?

This involves the sapphire is actually a hierarchical market reasons. Only observation of the substrate market, beguilingly 4-inch ingot prices fall even more severe than 2 inches, but if you compare 2Q 2014 market prices high, 2-inch decline to 48%, far exceeding the 4-inch decline 38%.

To explain this phenomenon to build a simple model to illustrate the current dig rods sapphire industry in general way, we are the first to dig dig 4 inches 2 inches, corresponding to the different crystal, a fixed optimum dig rod scheme, production 4 Meanwhile inch ingot, the proportion of associated and other production will be 2 inch boule, so 2-inch and 4-inch production or supply is said to be a complementary relationship.

From the demand perspective, the current manufacturers are most extension capacity from 2 inches to 4 inches switch. 2-inch and 4-inch requirement is an alternative relationship.

Korea will be the first epitaxial manufacturers to switch production to 4-inch and 6-inch, so the Korean system vendors sapphire epitaxial vendor associated production out of 2 inches of the ingot had been in China for the export market. However, with Chinese manufacturers such as Saman, Huacan capacity have begun to shift most of the time 4-inch, 2 inches more sharply reduced market demand. As shown in Figure 4 inch when demand for the D4, 2 inches demand for the D2, at a time when the market in order to meet the needs of 4-inch, will produce a number of 4-inch S4, S2 simultaneously have to produce a number of associated 2-inch, At this point, the market supply far more than 2 inches 2 inches of demand, the excess amount is (S2-D2).

Conversion to the time axis, we can see that over time, 2-inch and 4-inch demands presented inversely related, and 2-inch and 4-inch supply is positively correlated, and more to the latter, 2 inches of excess supply the more severe cases. It is foreseeable that the demand 2-inch substrate sheet of the future will be a disappearing market, how to dig after the 4-inch stick the rest of the ingot use other ways to do more to enhance the added value is worth further study.

But also because the market is hierarchical, so if we turn to observe the market demand for mobile phone cover, you will find a completely different quite different. The market's supply and demand, the main problem lies in the production of sapphire industry can currently far from meeting as a mass consumer demand for hundreds of millions of phones a year, so now handset makers, including Apple introduced only very limited number of limited edition. The next period of time, the entire supply chain to do sapphire are continuing to increase production capacity to meet the reserve capacity as a mass product desired.

Sapphire market supply and demand in the future be made in the two cases modeling and prediction, without considering the needs of the mobile phone cover case, sapphire market have a certain degree of overall oversupply, but demand still accounted LED substrate continued to decline, Applewatch table cover market demand, accounting and other window films will continue to improve, but not enough to absorb the whole industry supply pressure.

Under another scenario, taking into account the mobile phone application sapphire protecting the screen, if possible in 2016 APPLE sapphire protect the screen will import iPhone7, the sapphire optics applications will quickly take off. Not only have the opportunity to go on the market of excess production capacity, even resulting in 2016 and 2017 short-term shortage.

Just need to guard against is that for businesses, in a single customer accounted for is too high, companies will face some risks. While the sapphire industry, the future is still the biggest variable iPhone, most of the market needs of the entire industry, a product from a company, is undoubtedly the greatest risk of this industry will face.


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