Phecda Technology Vying for Top Three Global PSS Supplier Spot

Following listing on the Taiwan bourse on Dec. 19, 2014, leading sapphire manufacturer Phecda Technology announced its ambition of becoming one of the world’s top three Patterned Sapphire Substrate (PSS) supplier, according to a report by China Times.

Positive outcomes from the company’s 2013 business strategies led to high revenue growth in 4Q14, said company President Kuang-Ning Kuang. For example downstream clients formed strategic industry alliances, which supported the company’s operations.

Additionally, the company’s transition from a sole 2”sapphire wafer manufacturer and restructure of its product portfolio also supported the positive developments. The company’s 2”sapphire wafers now consist a 70% product share, while 4” wafers now make up 30%. The company aims to boost 4” wafer production to 50% by the end of 1Q15.

The company is ahead of the pack when it comes to 6” wafer production, and projects by 3Q15 2”, 4” and 6”wafer production distribution will be 10%, 80% and 10% respectively. Six-inch wafer prices have remained about the same, due to few suppliers on the market. Phecda Technology will continue to develop large sized sapphire wafers, and raise 6” sapphire production in accordance to client demands, which are expected to support operations.

Phecda Technology has been able to maintain operations by establishing an interest community through vertical integration. The company formed an alliance with seven to eight vertically integrated suppliers, when the economy soared all members had export markets and manufacturers secured raw supplies.

Moreover, the sapphire maker is working with Taiwanese equipment manufacturers to develop measurement equipment. This not only will lower manufacturing costs, but also boost Taiwanese equipment industry growth, and replace imported equipments. The new measurement equipment can boost production capacity and measurement accuracy. Manufacturers can also save up on installation costs with all-in-one measurement equipment which takes up less space in cleanrooms. The company will launch its first demo measurement equipment prototype in 2Q15.

In terms of production capacity, based on 2” sapphire wafer production capacity, the company’s monthly production capacity for 1Q15 is expected to reach 250,000 PCS. This is about 2.5 times the production capacity of Chinese manufacturers that are averaging 100,000 PCS. Phecda Technology is currently clearing out inventory, and estimates the economy will rebound after Chinese Lunar New Year, while production capacity expansions are expected to be completed by March 2015. The company’s 2”sapphire wafer monthly production capacity is estimated to reach 500,000 PCS by the end of 2015, which can supply about 10% global PSS demands, which will make it one of the world’s top three PSS suppliers.

Production capacity expansions has led to the company’s growing employee demands, and led to its aggressive training and headhunt for talent in the industry. The company also trains its own engineers and sent them to China to support operations there. As for processing, the company is still using the more stable and mature yellow light processing technology and focused on other advanced lighting technologies to maintain its leading market position.

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