Storm clouds are clearing for Taiwanese sapphire manufactures as sapphire substrate industry supply and demand returns to norm after years of financial loss. The rebounding industry has brought back investor confidence, which has spurred a wave of Taiwanese manufacturers to finance market strategies to acquire technological, capital, production capacity, and market share advantages.

The number of listed Taiwanese sapphire manufacturers on the local bourse is growing. Aceplux Optotech (Aceplux) will be listed on Taiwan’s Gretai Securities Market in early May this year, according to an announcement on March 5, 2014. Taiwanese sapphire manufacturers Crystalwise Technology and C Sun have already been listed for a couple of years. Soon to join their ranks are Ridgetech Microelectronics (Ridgetech) and Chrystal Applied Technology who are pushing to be listed by the end of this year. C Sun’s subsidiary Hwasun Quartek Corporation (Hwasun Quartek) has plans to follow suit in the near future. 

Operating performance for sapphire substrate and Patterned Sapphire Substrate (PSS) has been good so far this year, driven by expanding application in consumer electronics and LED lighting. LED bulb prices have been steadily dropping over the years, from US$30 in 2009 down to US$15 by 2012, with a penetration rate of 9 percent. Prices are estimated to drop below US$8 by 2016, with a penetration rate of 45 percent and up to 69 percent by 2020. 

PSS experienced a 30 percent manufacturing shortage in 1Q14, due to TV backlight and lighting market demands; the phase out of incandescent bulbs in Europe, U.S. and China, which raised PSS manufacturers operations. 

Sapphire manufacturers have initiated financing to expand production capacity to distant industry competitors and expand market share as market confidence recoups. Funds are mainly funneled into technology, production capacity, and large scale market strategy. The main battle ground this year is in large-sized products capacity expansion. 

Previously, 2-inch sapphire products was the mainstream product and made up 50 percent of the sapphire market. Despite Korean manufacturers switching to 4-inch substrate, technology limitations has restricted China, the global LED epitaxial production powerhouse to mainly use 2-inch products. Many manufacturers are making the move towards larger sized sapphire substrate products this year, however, pushing market share for 4-inch sapphire or bigger substrates to 70 percent, while 2-inch products dips to 28 percent. 

Rigidtech might be increasing 4-inch production capacity to 150,000 pieces per month. Hwasun Quartek’s target is to reach 40,000 pieces per month by the end of this year. Aceplux currently has production capacity of 20,000 pieces per month for 4-inch substrates.