Siu Han, Taipei; Jackie Chang

 

Orders of 2- and 4-inch sapphire wafers have been rebounding slightly in first-quarter 2012, according to Rubicon. Industry sources indicated that orders have been showing signs of reviving but it is still too early for sapphire substrate makers to increase quotes.

The price of sapphire substrates dropped significantly in 2011. The price of 2-inch substrates fell below US$10/unit. LED chipmakers noted that the price drop in fourth-quarter 2011 eased with average price around US$7-8/unit.

The LED industry has yet to rebound strongly, according to industry observers. The average selling price (ASP) of LED products have been leveling off in first-quarter 2012. Nevertheless, most LED chipmakers have reported falling January revenues. Epistar reported a 12% on-month decrease while Huga, Genesis, and Epileds reported on-month decreases of 10%, 18%, and 19% respectively. Formosa Epitaxy marks the exception with January revenues reaching NT$270 million (US$9.14 million), up 16% comparing to December 2011. Formosa Epitaxy expects orders from the small- and medium-size segments to increase with capacity utilization rate around 80% in February.

Sapphire substrate makers reported mixed January revenues. Crystal Applied and Wafer Works Optronics saw revenues increase while Crystal Wise reported January revenues fall to NT$81 million, down 40% on month.

Rubicon pointed out that the growth of the LED market has been limited because the supply chain has been trying to adjust inventory levels. The sapphire substrates market can expect improvements as commercialization of LED backlighting and lightings continue to grow. Rubicon indicated the signing of a latest supply contract of US$20 million.