Under the "slump" of the sapphire market, is the crisis still a chance?

(Text / high-tech LED reporter Tang Guirong)

According to the statistics of the High-tech LED Industry Research Institute (GLII), as of the end of November last year, the planned investment amount of domestic sapphire substrates has reached 34.8 billion yuan, which is 1.53 times of the planned investment amount of domestic sapphire projects in 2010. . Such crazy irrational investment expansion is another evil caused by the crazy orders for MOCVD equipment that began in China in 2009.

Last year, the price of a 2-inch sapphire substrate went through a $45/piece from the beginning of the year, and all the way down to $8/piece of the "roller coaster." Although, according to the latest data, the price of 2-inch sapphire substrates at the end of December last year has been maintained at 7-8 dollars in November, the price of crystal sticks has remained at 5 to 6 dollars per millimeter, and finally stopped falling after 9 months. .

But recently, Li Bingjie, chairman of Jingdian, admitted that under the pressure of terminal prices, there will still be downward pressure on sapphire substrates in the future. He pointed out that Taiwan's sapphire substrate manufacturers have now fallen to near cost, but considering that the mainland government has introduced a series of preferential policies to support the investment of substrate projects, some mainland manufacturers have quoted as low as $6, which is already lower than Most industries generally have a $8 cost price bottom line.

On the one hand, the cost of producing 2 inch sapphire substrates for many newcomers is between $6 and $10 per millimeter. At current market prices, these manufacturers are already at a loss. At the same time, those first-pass manufacturers that already have high yields and high capacity can continue to reduce production costs to less than $5, so they can make profits and suffer in the future.

On the other hand, most newcomers have had little experience in the manufacture of sapphire crystals in the past. Although there are more and more long-crystal equipment suppliers on the market offering a complete solution and lowering the threshold, the high-quality, high-yield sapphire crystal technology still needs a lot of research and development investment. It is a big challenge for the entrants.

Recently, Dr. Zhang Xiaofei, CEO of Gaogong LED, and Mr. Qi Zhiwei, Chairman of Jiujiang赛翡Sapphire Technology Co., Ltd. (hereinafter referred to as “赛赛”), started a dialogue on sapphire substrates.

The ideal cost is $ 3

Zhang Xiaofei : The price of 2-inch sapphire substrate dropped to 8 US dollars/piece at the end of 2011. Did you predict this price at that time? What is the cost of your calculation now?

Qi Zhiwei: The price we predicted is also 8 dollars. At present, our production capacity is still small, and the cost is at least 6 US dollars.

Zhang Xiaofei : I don't think the price of 8 dollars can stand up. It may be around 5 or 6 dollars soon. This obviously exceeds your current cost. If 200 crystal growth furnaces are in place and the annual output of 26 million pieces can be realized normally, what is the estimated gross profit?

Qi Zhiwei: In the short term, it is about 50%. In terms of price, if the end product does not fall in price, don't worry. It is also good if the end product is priced, because this is a self-adjustment within the industry. If the lamps, displays, computers, mobile phones, etc. are not significantly reduced, we will not have to drop the price significantly, which will only affect the speed of our capacity release.

Zhang Xiaofei : The key is still the cost of the sapphire substrate. If the cost of celluloid is 4 dollars, even if the market price is 8 dollars, there is still 100% profit. This kind of profit will attract more people to invest, so I think 8 dollars can't stand.

Qi Zhiwei: It is still unclear. Why can I sell 6 US dollars now, which proves that his cost is only 4 US dollars, so this industry is a good industry.

If the sapphire substrate is mature, the ideal cost is $3, but it can certainly be lower. Our production costs are raw materials, electricity prices, human resources, equipment and so on. 3 US dollars is about 400 crystal growth furnaces, which can operate stably for 2 years, which is the bottom line of cost.

4 dollars or 8 dollars, even I hope to achieve 2 dollars in cost, sell 4 dollars, also have 100% profit.

Zhang Xiaofei : The cost is 3 dollars. Is it estimated that it will be realized in 2015? Assuming that the reasonable profit is 30% by then, will the price fall below $5?

Qi Zhiwei: I think that by 2015 or 2016, the price will be below $5.

In the past, the domestic situation was a shortage of sapphire substrate capacity. If MOCVD can be activated in the future, it is believed that overcapacity will be solved quickly in the short term.

In fact, our manufacturers still hope to drop prices, the key is cost control.

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