US-based sapphire wafer manufacturer Rubicon Technology, Inc. (Nasdaq: RBCN) was enjoying sapphire wafers for the LED market price increasing and was paying more attention to own production capacity. In 3Q10, Rubicon's overall revenue grew by 30% sequentially to $20.5 million. Only in the LED market alone, revenue was $19.4 million, up 39% compared with $14 million in 2Q.

The company noted, the strong result thanked to substrates average selling prices (ASPs) increase approximately 30% in 3Q, which started increasing at the beginning of 2010. Especially, the price for 2-inch wafers had risen much more rapidly than for other wafer sizes, with estimates of 50-80% quarter-to-quarter price increases during 2010. And in 4Q, Rubicon estimated ASP would increase 15%.

A leader of Rubicon noted, in part the reason for the price rose was due to a market correction, but in part was also due to an imbalance in supply and demand, particularly for 2-inch wafers.

The leader explained that a lot of MOCVD growth capacity had increased at present, especially in china and Taiwan, which needed a massive amount of 2-inch sapphire and increased the imbalance. So recently, some Rubicon’s customers were moving or moved to larger-diameter (3- or 4-inch) wafers, in which several customers for 4-inch wafers were entering into the TV backlighting market.

The LED industry now required high-volume and stable supply, in order to meet the customers ‘demand, Rubicon had placed itself in a strong position to increase its output volume.

On November 5, 2010, Rubicon started to build the first boule (sapphire crystal) produced in its new facility in Batavia, Illinois, which was expected to double Rubicon's capacity and would be established in 4Q11.

Except the Batavia facility, Rubicon had also opened a slicing and polishing facility in Penang, Malaysia, which would produce polished 6- and 8-inch wafers for direct sale to customers. The company's revenue from 6-inch polished wafers was $4.7 million in 3Q10, of which $4.5 million was from the LED market, a sequential increase of $1 million.

For most smaller wafers (2-, 3- and 4-inch wafers), Rubicon would supply whole crystals to polishing companies in Asia as previously and some 4-inch polished wafers could be produced internally, depending on demand for larger wafers.