Taiwan Sapphire Maker Shares Surge Upon Apple Watch Demands

Following the launch of the sapphire covered Apple Watch, Tawanese sapphire makers share value have soared over the last week. As the LED industry enters a peak season, sapphire industry shares value have reached new record high, reported Apple Daily.

LEDinside projects a total of 30.8 million millimeters of two-inch equivalent sapphire ingot will be used for Apple Watch covers in 2015. This accounts for 18% of sapphire ingots produced worldwide for the entire year, which has alleviated the sapphire ingot industry’s long term oversupply situation.

Apple Watch sapphire demands are driving up Taiwan's sapphire manufacturer share value. (Photo courtesy of Apple)

Chinese smartphone makers including Huawei and others have started to employ the material in their flagship phones. Since gross profit from smartphone optical applications is much better than LED substrates, it has spurred LED sapphire manufacturers Crystalwise Technology (Crystalwise) and Procrystal Technology (Procrystal) to transit into the optical industry.

Upstream sapphire ingot manufacturers such as Procrystal and downstream sapphire polish and cutting manufacturers including Crystalwise, Rigidtech, Crystal Applied, and Tera Xtal can be classified into LED, smartphone, and optical application suppliers. Sapphire manufacturers that used to solely be involved in LED applications, such as Crystalwise and Rigidtech now are also involved in supplying sapphire for smartphone home buttons and camera lenses about three years ago. Manufacturers involved in both LED and optical application industries include Crystal Applied and Tera Xtal. The industry estimates, sapphire smartphone optic applications gross profits are about 30% higher than LEDs.

Crystalwise and Rigidtech’s largest client is leading LED epiwafer manufacturer Epistar. As the LED industry enters peak season next month, the two companies are expected to see a boost in revenue. Crystalwise and Rigidtech reported increased revenue growth in January compared to February, and Crystalwise shares have soared 30% in the last 10 days. Rigidtech share prices have also shot up from rock bottom.

Crystalwise has been expanding this year, and its production capacity is expected to increase 30% after its new factory in Chunan in Northern Taiwan is completed. The company will begin operations in May 2015. The company will be shifting its focus from LED substrates and PSS applications to wearable devices this year and optical applications.

Listed PSS company Rigidtech’s revenues were affected by Epistar’s lower revenue performance during second half of 2014. The company’s revenue has been on a rollercoaster ride, and its share values were halved from NT$160 in June 2014 to the current NT$ 80.

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