Patterned sapphire substrate market value in 2014 to reach US$711 million, says LEDinside
Press release, July 1; Alex Wolfgram, DIGITIMES [Tuesday 1 July 2014]
Strong LED market demand in 2014 has led to expanded patterned sapphire substrate (PSS) production capacity, according to LEDinside. The 4-inch PSS market is currently facing supply shortages caused by Taiwan- and China-based LED chip makers introducing large volume PSS into products. However, since makers are expected to expand PSS production by the end of 2014, tightened market supply conditions are expected to ease.
PSS market value in 2014 is expected to up 8% on year to reach US$711 million. The industry is mainly benefiting from leading Taiwan chip maker Epistar's patent license alliance with Philips, which has torn down previous patent barriers. Additionally, Taiwan and China LED chip makers are allocating more production capacity to 4-inch wafer production, which is leading to supply shortages.
Under PSS supply shortage conditions triggered by high market demand, Taiwan and China makers have all responded with plans of scaling up PSS production capacity, the firm said. Taiwan sapphire maker Crystalwise Technology aims to boost PPS production capacity expansion from 510K/M in 2013 to 800K pcs/M in 2014. Another Taiwan maker Rigidtech Microelectronics plans to raise production to 1200K pcs/M before the end of 2014, while Crystal Applied Technology 260K pcs/M during the period. Other makers including Tera Xtal Technology, Sino Nitride Semiconductor and Zhejiang Crystal-Optech are planning to raise production capacity through strategic alliances or production expansions. LEDinside said it estimates that PSS production capacity will expand 8% on year to 52.9 million pieces in 2014 as a result.
Despite tightened PSS supply, there has not been any significant price upticks. Prices for 2-inch PSS have remained at US$12.40-12.90 during second quarter of 2014, while 4-inch PSS prices have remained at around US$52-55. Due to intense market competition from China makers, LED chip makers are in a difficult spot when it comes to profitability, and are strongly against PSS makers raising prices, added LEDinside.
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