Despite a take-off of the LED industry, pressure is mounting on suppliers of sapphire ingots for lower quotes in the second quarter 2011 as recent capacity ramps by makers, Korea-based vendors in particular, are likely to result in an oversupply of the ingots, according to industry sources.
The world’s top-seven sapphire ingot makers, including Rubicon Technology, Monocrystal, Sapphire Technology Company (STC), AsTEK, Hansol LCD and LG Siltron, will expand their production capacities by nearly 90% in 2011, according to Digitimes Research.
Just because capacity of sapphire ingots increases does not mean there will be an oversupply; you need to look at the other side of the coin: demand. Where is demand for LED coming from? My guess is a large portion is coming from LCD TVs with LED backlights. Some LCD TVs like the Toshiba 55ZL1 integrate more than 3000 LEDs. That’s a lot. And then there is speculation that LED backlights will get cheaper, too.
I could quote some market research firm but the in general 2011 is poised to be the year where LED backlit LCD TVs grab about 50% market share. In a LCD TV market estimated to be more than 200 million units, 50% of that is big. Will we see more LCD TVs with LED backlights later this year for rock-bottom prices. That doesn’t mean that all LED backlit LCD TVs are good, or even better than those with CCFL backlights in term of front screen performance, but it does mean sapphire ingot suppliers are not just randomly adding production capacity.