Chinese-language online media STCN.Com reporters interviewed Ji Yong, General Manager and Chairman of Guizhou Haotian Optoelectronics Technology Co. (Guizhou Haotian Opto), during the 10th OfWeek LED Seminar 2013 and OfWeek LED Awards in Shenzhen on Nov. 15, 2013. Ji shares his observations on the sapphire substrate market developments and the impact from GT Advanced Technology (GTAT) and Apple partnership.
GTAT recently signed a multi-year agreement with Apple worth US$ 578 million to supply high-end sapphire substrates. This agreement has once again stirred up the investment market, and put sapphire substrate industry under the lime light.
Apple and GTAT’s partnership is an indicator that Apple will be basing sapphire substrate smartphone display technology on it existing camera protection cover and home button technology, according to Ji. This will require large sapphire substrate demands that will be way above current supply. This will be a huge stimulant for the sapphire substrate market, and might become a momentum for other smartphone component manufacturers to use sapphire substrates as raw material.
Guizhou Haotian Opto uses GTAT’s HEM furnace to make sapphire substrate crystals, and is the U.S. company’s strategic partner, according to sources. As early as 2011, Ji, who was one of the U.S. optoelectronic film and material industry’s four musketeers, discovered and predicted large volumes of sapphire substrates will be used in smartphone displays. To propel the sapphire substrate smartphone display market, Ji had talked with GTAT CEO Tom Gutierrez on numerous occasions, and has been advocating Apple and other smartphone manufacturers to use sapphire substrate material in smartphone displays.
Ji remains optimistic about Guizhou Haotian Opto’s future Despite of GTAT and Apple’s agreement, and the fact that GTAT is building its new factory in Arizona, U.S. “If Apple needs a Chinese manufacturer to provide sapphire substrate material, it will definitely be Guizhou Haotian Opto,” said Ji. He went on noting China is an important global consumer electronic market. Once Apple decides to use large volume of sapphire substrate and chooses GTAT as the main supplier and deliverer, its labor costs will be relatively high. In addition, sapphire is considered a luxury item in China, and has a 10% import luxury tariff. This is where Chinese suppliers can offer Apple more advantages, he added.
Guizhou Haotian Opto has invested RMB 420 million in sapphire substrates, and is planning to expand productions by the end of 2014. Upon completion, the company will reach annual production of 30 million pcs sapphire substrates for LED applications. Currently, the company’s manufactured sapphire substrates will be used for LED substrates, windows, smartphones, and watches. Its main markets will include Taiwan, South Korea, Europe, U.S., and also has some clients in China. About 90 percent of Taiwan’s sapphire substrate manufacturers are using the company’s sapphire substrate material.
Ji also pointed out sapphire substrate shortages began in summer 2013. Sapphire substrate prices and volumes have increased in 3Q13, mostly due to high-power LED epiwafer market demands and hot demands from the smartphone market. Guizhou Haotian Opto has already entered sapphire substrate shortage. Although, the industry has been expanding productions, the shortage condition is expected to continue for awhile.
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