As LED enters conventional peak season in March it will initiate the LED lighting cycle, with demands estimated to return to peak heights in 2010, according to latest research by Guotai Junan Securities. The Chinese financial institute projected sapphire substrate prices will continue its upward climb in 2014 and enter the big LED trend.

“We noted earlier that the new iPhone is likely to use sapphire substrate panels, making it a widely used new material in 2014,” wrote Guotai Junan Securities analysts Xiong Jun and Mao Ping. However, the market has neglected another major trend: the kick off of the LED lighting cycle, which will create a momentum for the spread of sapphire substrate in the consumer electronic market. The LED lighting sector will be the first to rebound. The analysts noted sapphire substrate will become a new material in mainstream electronic applications, and were optimistic that the sapphire industry would have the largest room for growth.

Driven by LED lighting demands, the coming peak season is expected to show stronger price upticks. Related supply chain research organization noted 2-inch sapphire ingot prices have risen from US$ 3.50 in early 2014 to US$ 4, while 4-inch sapphire ingot prices increased from US$ 12.5 to US$ 15 during the same period. As March enters traditional LED peak season, with growing utilization rates analysts projected future prices will continue to rise quarterly 10 to 20 percent. Sapphire substrate manufacturers gross profit margin will reach above 40 percent (in 2013 it was about 20 percent), wrote the analysts.

Sapphire substrate demands will be better than market expectations as technology improves. Spurred on by technological advancements, larger sapphire substrate demands will increase. In 2014, 4-inch sapphire substrate growths are expected to increase nearly 70 percent, growing demand for larger sapphire substrate will eventually increase demands for Kyropoulos method crystal growth furnaces. The analysts estimated large chamber sapphire growth furnaces high growth will continue for at least two years.

In conclusion, the sapphire substrate industry’s growth momentum will be led by LED in the first half of 2014, followed by consumer electronics in the second half of 2014.