By BizLED Bureau
September 7, 2015: Observing the rapid growth of the LED market, many sapphire ingot manufacturers have entered the LED market since 2011, and have expanded their production capacities. However, over the years, the competition in the LED market intensified to such an extent, that there were rumors in the industry that while some major sapphire suppliers are facing no-capacity growth, the smaller companies are considering to exit the market.
According to HIS, in 2013, 95% of GaN LEDs were manufactured on sapphire wafers and only 1% on silicon wafers. However, over the years demand for gallium nitride-on-silicon (GaN-on-Si) LEDs started increasing significantly. IHS predicted significant growth in manufacturing capacity of GaN-on-Si LEDs between 2013 and 2020.
IHS now predicts that by 2020, there will be 40% penetration of GaN-on-Si in the GaN LED market. This development will significantly impact the sapphire industry.
This shift is taking place because while manufacturing large sapphire ingots is difficult, silicon wafers are cheaper and more abundant. Also, there is a large pre-existing market for silicon-based products that is being leveraged to create economies of scale and reduce cost of LEDs.
Currently, there are only a few manufacturers of silicon based LEDs. These companies are likely to increase their production capacities over the coming years.
As a result of this shift to silicon wafers, and also because of the stiff competition in the LED market, sapphire ingot and wafer suppliers need to take some good strategic decisions to stay in the business. Many sapphire suppliers, in order to make for their loss in the LED market, have turned towards other markets like protection covers for consumer electronic devices like smartphone, digital camera, tablets, etc.
Sapphire has physical properties of a higher dielectric constant and it is a better medium-wave infrared transparency than glass. It is also the second hardest material in the world after diamond. Hence, sapphire is good for consumer electronics. The sapphire market is, therefore, banking on this market to make profits. While Apple has plans to use sapphire for its iPhone 6, iWatch and 4th generation iPad, iPhone 5s already uses sapphire crystal in the home button fingerprint sensor. Other smartphone and tablet manufacturers may follow the path led by Apple.
Photo caption: GaN-on-Si wafer, Courtesy: Bridgelux
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