LYON, FRANCE--An analysis released by Yole Développement on the sapphire-substrate industry includes an estimate of the total market size from 2005 to 2013, highlighting the strengths and weaknesses of the sapphire materials industry. One of the report's most important conclusions is that the second half of 2010 could experience shortage conditions, although by 2011, these conditions should resolve themselves. But the sapphire-material market should exceed $200 million in 2010, despite the economic downturn.
Sapphire wafers serve multiple purposes in the photonics industry: sapphire is used in ultra-high-strength windows, IR and other optics, and (when doped) as the gain medium for Ti:sapphire lasers. In addition, sapphire is the substrate on which a portion of the gallium-nitride (GaN)-based LEDs produced today are grown. The analysis by Yole Développement is largely concerned with this last market segment.
The largest market segment
The sapphire-substrate market for electronics applications (which, in addition to LED substrates, includes radio-frequency electronics for cell phones) has reached a market volume of approximately 9 million wafers (in units of equivalent 2 in. wafers) for LED substrates in 2009, augmented by some tens of thousands of 6 in. and 8 in. wafers for radio-frequency applications.
Despite the 2009 economic situation, and thanks mostly to LCD LED backlight applications, the c-plane sapphire-wafer market grew 4% in 2009 in the LED segment as compared to 2008. On the other hand, r-plane sapphire business for radio-frequency applications was strongly affected by the recession, as the main application markets are related to consumer devices (c-plane and r-plane refer to two different sapphire crystal-lattice orientations).
The price pressure on 2 in. sapphire wafers remains critical, and Yole Développement's models show that most of the suppliers have a tiny profit margin on that material; some suppliers are even losing money in that business. The price level for 2 in. wafers has been extremely low, especially in Taiwan. "We are forecasting an approximate 5% price increase across the board," says Philippe Roussel, a project manager at Yole Développement. "However, it will be unevenly distributed through the different diameters, with 2 in. price to increase up to 40% in 2010 while, on the other hand, we expect 3 in. and 4 in. prices to remain stable compared to their low of 2009 and actually decrease another 20% compared to their average selling price through 2009."
Indeed, Yole's demand-capacity analysis shows a "risk zone" that will likely occur in the second half of 2010, in which all the planned additional manufacturing capacity won't be fully installed yet, conflicting with the ever-burgeoning demand in LEDs and possibly creating some turbulence. But Yole Développement feels comfortable in saying that this stress period should end early in 2011 with the full ramp-up of planned sapphire production equipment.
In addition to Roussel, Eric Virey of Saint-Gobain Crystals (Paris, France) put together the report. More information on the report, which includes companies familiar to those in the photonics field, such as Aixtron (Aachen, Germany), Cree (Durham, NC), and Crystal Systems (Salem, MA), can be found at www.yole.fr.
The high end
One section of the sapphire-materials market not covered by the report is the Ti:sapphire crystal market. Crystal Systems (Salem, MA) is a leader in this area, and especially in crystals grown for some of the highest-power Ti:sapphire lasers being built in the world, which will produce pulses with petawatt peak powers.
For these lasers, the larger the crystal, the better. Based on heavy research and drawing upon its many years of experience growing its own sapphire boules, Crystal Systems has already grown high-quality 170 mm Ti:sapphire crystals, will be putting 200 mm crystals in production, and is aiming to fabricate 250 mm crystals. For this leading-edge segment of the sapphire market, business is looking good indeed.
