Taiwanese LED Sapphire Manufacturers Struggle from Oversupply Issues

The sapphire substrate application industry hit a low point when Apple abandoned employing sapphire screens in its new generation iPhones, many Taiwanese sapphire manufacturers have bear the brunt from the abrupt decision, reported Chinese-language newspaper Commercial Times.

Taiwanese manufacturer Rigidtech shutdown one of its sapphire manufacturing facilities in Taiwan. Acme Electronics, a manufacturer of magnesium zinc ferrite cores, subsidiary USI Optronics incurred losses nearing half of its contributed capital, reflecting its dire business operation situation. Another manufacturer Crystal Applied retracted its application to be listed on Taiwan’s Over The Counter (OTC) Exchange in July 2016.

Sapphire substrate manufacturers especially Taiwanese companies have suffered from the industry downturn this year.

Hot money poured into sapphire substrate, ingots and other related industries shortly after Apple announced interests in applying the robust material for iPhone displays back in late 2013. However, high manufacturing costs, low yield rates led to a shortage that made it difficult for the sturdy material to replace Dow Corning glass. U.S. sapphire maker GTAT was Apple’s leading partner until it filed for bankruptcy in October 2014. Moreover, the slowdown in LED industry, the main driver for sapphire applications, further hurt upstream sapphire ingot and substrate suppliers.

Rigidtech recently shutdown its Wenhua factory in Taiwan, and its production capacity has been supported by Nationstar instead. Based on the company’s compiled statistics the shutdown factory mainly produced 2-inch sapphire wafers, and had a production capacity of 275,000 wafers, but was only pumping out 14,000 wafers per month. Revenue from sapphire amounted to less than 4.82% revenue share.

Patterned sapphire substrate manufacturer Rigidtech’s PSS products could raise blue LED brightness by 30%, its clients include top Taiwanese LED chip maker Epistar and Genesis Photonics Inc. (GPI). The company’s LED chip factory operations plummeted at the start of 2016, its losses for the first three quarters even exceeded market estimations. Most manufacturers have scaled back production or transformed their business models, which impacted upstream material suppliers. There does not seem to be an immediate solution for the sapphire market, Epistar noted the sapphire substrate industry was still in oversupply situation.

USI Optronics accumulated losses equaling half of its contributed capital in 2016. During an interim shareholder meeting last Friday, parent company Acme Electronics announced USI Optronics was transforming its business model in directing investments into monocrystalline sapphire production facilities because of incremental changes in sapphire prices and market demands. Acme Electronics holds an 84% stake in USI Optics, and reported its losses for the first three quarters of 2016 amounted to NT $256 million (US $ 8 million).

Disclaimers of Warranties
1. The website does not warrant the following:
1.1 The services from the website meets your requirement;
1.2 The accuracy, completeness, or timeliness of the service;
1.3 The accuracy, reliability of conclusions drawn from using the service;
1.4 The accuracy, completeness, or timeliness, or security of any information that you download from the website
2. The services provided by the website is intended for your reference only. The website shall be not be responsible for investment decisions, damages, or other losses resulting from use of the website or the information contained therein<
Proprietary Rights
You may not reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate to any third party, any materials contained on the services without the express prior written consent of the website or its legal owner.

TSLC Corporation, a subsidiary of SemiLEDs, launched sampling of its tri-color Mini LED series, targeted to provide LED display manufacturers with surface-mounting (SMT) compatible devices. The first product in the tri-color multi pixel series... READ MORE

The German chemistry giant BASF has revealed its development of dark automotive paint colors that are reflective to LiDAR for enhancing the detecting function of autonomous cars. LiDAR plays a critical role to the development of autonomous veh... READ MORE