17 March 2014

Ramp up of GaN on-Si LEDs over coming year to drive shift from sapphire to silicon wafers

Last November, market research firm IHS Inc forecast 40% penetration of gallium nitride-on-silicon (GaN-on-Si) into the GaN light-emitting diode market by 2020. But will this affect the sapphire industry, questions Dkins Cho (principal analyst for IHS Technology) in a research note on a new report (examining the impact the transition GaN-on-Si LEDs will have on the sapphire industry)?

There are currently just a few players publicly manufacturing silicon-based LEDs. However, these companies and others joining the market are likely to ramp up production capacity over the coming year at a relatively low price compared with conventional GaN LED chips (grown on sapphire). The result will be a shift from sapphire towards silicon wafers, forecasts IHS.

Since 2011, many sapphire ingot makers have entered the LED market and have expanded production capacity steadily. However, as competition has intensified, there are rumors in the industry that many of the major suppliers have no more capacity growth and some smaller companies are looking to exit the market, notes IHS.

As a result of the shift to silicon wafers and increased competition, sapphire ingot and wafer suppliers will have to make some hard decisions to remain in business, reckons the research note. One option is to replace their loss in the LED industry by diversifying into other markets such as a protective covers for consumer electronic devices (i.e. smart phones, digital cameras and tablets).

Sapphire possesses the physical properties of a higher dielectric constant and better medium-wave infrared transparency than glass when applied in sensor applications. Sapphire is also the second hardest material in the world (after diamond).

On 10 September, Apple filed a patent with the US Patent and Trademark Office (USPTO) that revealed its intention to add a sapphire laminate to future devices. This would potentially provide the new iPhone 6, 4th generation iPad and iWatch with a stronger glass that is ultimately scratch resistant, notes IHS. The iPhone 5s already uses sapphire crystal in the home button fingerprint sensor. Other smart phone and tablet manufacturers are likely to follow suit in the future.

IHS concludes that the LED value chain will experience a dynamic industry restructuring over the coming years that will have wider implications in the consumer electronics market.

See related items:

GaN-on-Si LEDs to grow at 69% CAGR from 1% market share in 2013 to 40% in 2020

Tags: LED market GaN-on-Si

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