2016
From Technologies to Market
Status Of the Sapphire Industry
LED China conference
March 16th 2016
March 16th 2016
From Technologies to Market
Eric Virey - Senior Analyst
2copy2016 | wwwyolefr | About Yole Deacuteveloppement
MEMS amp
Sensors
OLED and
Displays
Compound
Semi - LED
Imaging Photonics
MedTech
Manufacturing
Advanced Packaging
Batteries Energy
Management
Power
Electronics
FIELDS OF EXPERTISE
Yole Deacuteveloppementrsquos 30 analysts operate in the following areas
3
A GROUP OF COMPANIES
Market
technology and
strategy
consulting
wwwyolefr
MampA operations
Due diligences
wwwyolefinancecom
Innovation and business maker
wwwbmorphocom
Manufacturing costs analysis
Teardown and reverse engineering
Cost simulation tools
wwwsystemplusfr
IP analysis
Patent assessment
wwwknowmadefr
copy 2016
Sapphire Industry Status
5
2015 APPLICATION BREAKDOWN
Therersquos more than just
LEDs
2015 Material Consumption Breakdown Per Applications
(Note excludes traditional watches aerospace defense medical industrial etchellip)
LEDOptical Wafers
Smartwatch
Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
Cell Phone
Cover Glass
HuaweiKyocera
SOS
6
SAPPHIRE SUPPLY AND DEMAND
Dramatic global excess capacity
But situation is complex
bull Leaders still operating at close to full capacity while tier-2 are idle
bull Large amount of capacity is not qualified for most applications
bull Overstated capacity sometimes difficult to verify
[1] Includes LED optical wafers SOS Apple Watch[2] Supply and demand for LED Optical wafers and SOS (excludes Apple Watch finishing capacity at Biel and Lens
which requires 25D and 3D capabilities)[3] Open market only excludes demand and capacity at LED makers
3x
22x
18x
Sapphire Supply and Demand(Exiting 2015)
copy2016 | wwwyolefr | Sapphire Market amp Technology
7
WHY CAPACITY IS SO HIGH AND KEEPS INCREASING
Anticipation of fast
growing LED applications
10rsquos of new entrants all
setting up capacity to become
1
2010-2011 Present
Vertical Integration
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Sanrsquoan 三安光電
Iljin Display
hellip
Duplication of capacity
Anticipation of new applications
(Smartphone display covers)
DARX 达瑞祥光电科技
EGing 亿晶光电科技
Kingsun 内蒙古鑫晟光电科技有限公司
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Aurora 奥瑞德hellip
Leaders with high
Utilization Rates
Monocrystal
Aurora 奥瑞德
hellip
No consolidation
copy2016 | wwwyolefr | Sapphire Market amp Technology
2013-2015
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
2copy2016 | wwwyolefr | About Yole Deacuteveloppement
MEMS amp
Sensors
OLED and
Displays
Compound
Semi - LED
Imaging Photonics
MedTech
Manufacturing
Advanced Packaging
Batteries Energy
Management
Power
Electronics
FIELDS OF EXPERTISE
Yole Deacuteveloppementrsquos 30 analysts operate in the following areas
3
A GROUP OF COMPANIES
Market
technology and
strategy
consulting
wwwyolefr
MampA operations
Due diligences
wwwyolefinancecom
Innovation and business maker
wwwbmorphocom
Manufacturing costs analysis
Teardown and reverse engineering
Cost simulation tools
wwwsystemplusfr
IP analysis
Patent assessment
wwwknowmadefr
copy 2016
Sapphire Industry Status
5
2015 APPLICATION BREAKDOWN
Therersquos more than just
LEDs
2015 Material Consumption Breakdown Per Applications
(Note excludes traditional watches aerospace defense medical industrial etchellip)
LEDOptical Wafers
Smartwatch
Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
Cell Phone
Cover Glass
HuaweiKyocera
SOS
6
SAPPHIRE SUPPLY AND DEMAND
Dramatic global excess capacity
But situation is complex
bull Leaders still operating at close to full capacity while tier-2 are idle
bull Large amount of capacity is not qualified for most applications
bull Overstated capacity sometimes difficult to verify
[1] Includes LED optical wafers SOS Apple Watch[2] Supply and demand for LED Optical wafers and SOS (excludes Apple Watch finishing capacity at Biel and Lens
which requires 25D and 3D capabilities)[3] Open market only excludes demand and capacity at LED makers
3x
22x
18x
Sapphire Supply and Demand(Exiting 2015)
copy2016 | wwwyolefr | Sapphire Market amp Technology
7
WHY CAPACITY IS SO HIGH AND KEEPS INCREASING
Anticipation of fast
growing LED applications
10rsquos of new entrants all
setting up capacity to become
1
2010-2011 Present
Vertical Integration
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Sanrsquoan 三安光電
Iljin Display
hellip
Duplication of capacity
Anticipation of new applications
(Smartphone display covers)
DARX 达瑞祥光电科技
EGing 亿晶光电科技
Kingsun 内蒙古鑫晟光电科技有限公司
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Aurora 奥瑞德hellip
Leaders with high
Utilization Rates
Monocrystal
Aurora 奥瑞德
hellip
No consolidation
copy2016 | wwwyolefr | Sapphire Market amp Technology
2013-2015
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
3
A GROUP OF COMPANIES
Market
technology and
strategy
consulting
wwwyolefr
MampA operations
Due diligences
wwwyolefinancecom
Innovation and business maker
wwwbmorphocom
Manufacturing costs analysis
Teardown and reverse engineering
Cost simulation tools
wwwsystemplusfr
IP analysis
Patent assessment
wwwknowmadefr
copy 2016
Sapphire Industry Status
5
2015 APPLICATION BREAKDOWN
Therersquos more than just
LEDs
2015 Material Consumption Breakdown Per Applications
(Note excludes traditional watches aerospace defense medical industrial etchellip)
LEDOptical Wafers
Smartwatch
Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
Cell Phone
Cover Glass
HuaweiKyocera
SOS
6
SAPPHIRE SUPPLY AND DEMAND
Dramatic global excess capacity
But situation is complex
bull Leaders still operating at close to full capacity while tier-2 are idle
bull Large amount of capacity is not qualified for most applications
bull Overstated capacity sometimes difficult to verify
[1] Includes LED optical wafers SOS Apple Watch[2] Supply and demand for LED Optical wafers and SOS (excludes Apple Watch finishing capacity at Biel and Lens
which requires 25D and 3D capabilities)[3] Open market only excludes demand and capacity at LED makers
3x
22x
18x
Sapphire Supply and Demand(Exiting 2015)
copy2016 | wwwyolefr | Sapphire Market amp Technology
7
WHY CAPACITY IS SO HIGH AND KEEPS INCREASING
Anticipation of fast
growing LED applications
10rsquos of new entrants all
setting up capacity to become
1
2010-2011 Present
Vertical Integration
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Sanrsquoan 三安光電
Iljin Display
hellip
Duplication of capacity
Anticipation of new applications
(Smartphone display covers)
DARX 达瑞祥光电科技
EGing 亿晶光电科技
Kingsun 内蒙古鑫晟光电科技有限公司
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Aurora 奥瑞德hellip
Leaders with high
Utilization Rates
Monocrystal
Aurora 奥瑞德
hellip
No consolidation
copy2016 | wwwyolefr | Sapphire Market amp Technology
2013-2015
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
copy 2016
Sapphire Industry Status
5
2015 APPLICATION BREAKDOWN
Therersquos more than just
LEDs
2015 Material Consumption Breakdown Per Applications
(Note excludes traditional watches aerospace defense medical industrial etchellip)
LEDOptical Wafers
Smartwatch
Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
Cell Phone
Cover Glass
HuaweiKyocera
SOS
6
SAPPHIRE SUPPLY AND DEMAND
Dramatic global excess capacity
But situation is complex
bull Leaders still operating at close to full capacity while tier-2 are idle
bull Large amount of capacity is not qualified for most applications
bull Overstated capacity sometimes difficult to verify
[1] Includes LED optical wafers SOS Apple Watch[2] Supply and demand for LED Optical wafers and SOS (excludes Apple Watch finishing capacity at Biel and Lens
which requires 25D and 3D capabilities)[3] Open market only excludes demand and capacity at LED makers
3x
22x
18x
Sapphire Supply and Demand(Exiting 2015)
copy2016 | wwwyolefr | Sapphire Market amp Technology
7
WHY CAPACITY IS SO HIGH AND KEEPS INCREASING
Anticipation of fast
growing LED applications
10rsquos of new entrants all
setting up capacity to become
1
2010-2011 Present
Vertical Integration
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Sanrsquoan 三安光電
Iljin Display
hellip
Duplication of capacity
Anticipation of new applications
(Smartphone display covers)
DARX 达瑞祥光电科技
EGing 亿晶光电科技
Kingsun 内蒙古鑫晟光电科技有限公司
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Aurora 奥瑞德hellip
Leaders with high
Utilization Rates
Monocrystal
Aurora 奥瑞德
hellip
No consolidation
copy2016 | wwwyolefr | Sapphire Market amp Technology
2013-2015
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
5
2015 APPLICATION BREAKDOWN
Therersquos more than just
LEDs
2015 Material Consumption Breakdown Per Applications
(Note excludes traditional watches aerospace defense medical industrial etchellip)
LEDOptical Wafers
Smartwatch
Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
Cell Phone
Cover Glass
HuaweiKyocera
SOS
6
SAPPHIRE SUPPLY AND DEMAND
Dramatic global excess capacity
But situation is complex
bull Leaders still operating at close to full capacity while tier-2 are idle
bull Large amount of capacity is not qualified for most applications
bull Overstated capacity sometimes difficult to verify
[1] Includes LED optical wafers SOS Apple Watch[2] Supply and demand for LED Optical wafers and SOS (excludes Apple Watch finishing capacity at Biel and Lens
which requires 25D and 3D capabilities)[3] Open market only excludes demand and capacity at LED makers
3x
22x
18x
Sapphire Supply and Demand(Exiting 2015)
copy2016 | wwwyolefr | Sapphire Market amp Technology
7
WHY CAPACITY IS SO HIGH AND KEEPS INCREASING
Anticipation of fast
growing LED applications
10rsquos of new entrants all
setting up capacity to become
1
2010-2011 Present
Vertical Integration
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Sanrsquoan 三安光電
Iljin Display
hellip
Duplication of capacity
Anticipation of new applications
(Smartphone display covers)
DARX 达瑞祥光电科技
EGing 亿晶光电科技
Kingsun 内蒙古鑫晟光电科技有限公司
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Aurora 奥瑞德hellip
Leaders with high
Utilization Rates
Monocrystal
Aurora 奥瑞德
hellip
No consolidation
copy2016 | wwwyolefr | Sapphire Market amp Technology
2013-2015
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
6
SAPPHIRE SUPPLY AND DEMAND
Dramatic global excess capacity
But situation is complex
bull Leaders still operating at close to full capacity while tier-2 are idle
bull Large amount of capacity is not qualified for most applications
bull Overstated capacity sometimes difficult to verify
[1] Includes LED optical wafers SOS Apple Watch[2] Supply and demand for LED Optical wafers and SOS (excludes Apple Watch finishing capacity at Biel and Lens
which requires 25D and 3D capabilities)[3] Open market only excludes demand and capacity at LED makers
3x
22x
18x
Sapphire Supply and Demand(Exiting 2015)
copy2016 | wwwyolefr | Sapphire Market amp Technology
7
WHY CAPACITY IS SO HIGH AND KEEPS INCREASING
Anticipation of fast
growing LED applications
10rsquos of new entrants all
setting up capacity to become
1
2010-2011 Present
Vertical Integration
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Sanrsquoan 三安光電
Iljin Display
hellip
Duplication of capacity
Anticipation of new applications
(Smartphone display covers)
DARX 达瑞祥光电科技
EGing 亿晶光电科技
Kingsun 内蒙古鑫晟光电科技有限公司
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Aurora 奥瑞德hellip
Leaders with high
Utilization Rates
Monocrystal
Aurora 奥瑞德
hellip
No consolidation
copy2016 | wwwyolefr | Sapphire Market amp Technology
2013-2015
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
7
WHY CAPACITY IS SO HIGH AND KEEPS INCREASING
Anticipation of fast
growing LED applications
10rsquos of new entrants all
setting up capacity to become
1
2010-2011 Present
Vertical Integration
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Sanrsquoan 三安光電
Iljin Display
hellip
Duplication of capacity
Anticipation of new applications
(Smartphone display covers)
DARX 达瑞祥光电科技
EGing 亿晶光电科技
Kingsun 内蒙古鑫晟光电科技有限公司
Biel-Roshow 伯恩露笑蓝宝石
Lens 藍思科技
Aurora 奥瑞德hellip
Leaders with high
Utilization Rates
Monocrystal
Aurora 奥瑞德
hellip
No consolidation
copy2016 | wwwyolefr | Sapphire Market amp Technology
2013-2015
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
8
IMPACT ON PRICES
Dramatic Price Decrease
copy2016 | wwwyolefr | Sapphire Market amp Technology
6rdquo
4rdquo
2rdquo
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
9
SOME COMPANY RESIST BETTER THAN OTHERS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Some companies resist Others are tumbling
bull CAT victim of BIEL + LENS vertical integration of CE wafers
bull PSS focus pays off (for now)
bull Russia and Japan-based companies benefit from exchange rate
bull Cost control performance qualityhellip
銳捷
鑫晶
兆遠
晶美
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
10
TOO MANY PLAYERS RATIONALIZATION IS REQUIRED
copy2016 | wwwyolefr | Sapphire Market amp Technology
Even leaders might be operating below cash cost strong balance
sheet (or access to capital) required to
survive in the storm
Some vertical integration
bull Finishing + PSS
bull LED makers
bull HC-Semitek + Crystaland
bull Sanrsquoan + CAT PSS operation
~ OK
(Revenue)
Gone
And many
more
Q1-2016 Status
Danger
Strong focus on non-LED
non wafer applications
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
copy 2016
Sapphire Application Trends
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
12
SAPPHIRE FOR LED
Oversupply and strong
inventory in H2-2015 now
improving
103
131
Strong growth in general lighting
Massive adoption + upgrade cycle from
smart lighting
Moderate decrease in large displays
4K High Dynamic Range Wide Color
Gamut need more LED per TV + OLED TV
delay slow down the decline
Strong decline in small displays OLED
copy2016 | wwwyolefr | Sapphire Market amp Technology
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
13
OPTICAL WAFERS CAMERA LENS COVERS
The HTC One M9
Sapphire camera lens
Huawei Honor 7 (华为)
Sapphire camera lens
2015 2015
蓝宝石
蓝宝石
Sapphire is not a
strong
differentiator
But cost
decreasing
Now lt US$050
Accelerate
adoption
copy2016 | wwwyolefr | Sapphire Market amp Technology
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
14
EVOLUTION TOWARD DUAL CAMERAS
copy2016 | wwwyolefr | Sapphire Market amp Technology
HTC M8
(2014)
HTC Butterfly
2 (2014)
Huawei Honor
6+ (2014)
HTC M9+
(2015)
ZTE Axon
(2015)
Huawei
P9 (2016)
iPhone 7
7Pro
2016
Artist
Rendition
Dual Camera
Improves depth of
perception brightness
low light and color
performance
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
15
DUAL CAMERA IPHONE 7 COULD INCREASE SAPPHIRE USAGE
copy2016 | wwwyolefr | Sapphire Market amp Technology
20 cm2 - 52 lenses
Previous iPhones
Circular lens covers extracted from 2rdquo wafers
36 cm2 - 28 lenses
iPhone 7
Oblong lenses from larger square wafers ()
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
16
OPTICAL WAFERS FINGERPRINT READER COVER
The Meizu MX4 Pro (魅族)
Fingerprint reader from Goodix with a
sapphire cover
2015
蓝宝石
All top line iPhone and
most iPad now have
fingerprint readers
蓝宝石
bull Sapphire is
expensive (~$19)
bull Apple has strong IP
very low adoption
outside Apple
bull New entry level 4rdquo
ldquoiPhone SErdquo
bull Fingerprint readers
will become as
popular as camera
phones
copy2016 | wwwyolefr | Sapphire Market amp Technology
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
17
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
2015
Button for
fingerprint sensor
Fingerprint sensor is under the display or into
the display stack
2017 ndash 2018
Invisible Fingerprint Sensor (IFSTM) Capacitive
SonicTouch Ultrasound
Snapdragon Sensetrade ID Ultrasound
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
18
WILL APPLE (AND OTHERS) ELIMINATE THE HOME BUTTON
copy2016 | wwwyolefr | Sapphire Market amp Technology
Iris recognition limited success in smartphones so far
(Makes sense in Laptops less in smartphones)
Fujitsursquos Arrows NX F-04G introduced in June 2015
features an iris scanner
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
19
SMARTWATCH VERY DISAPPOINTING (SO FARhellip)
bull Only ~10 of AppleWatches sold featured aSapphire display cover
copy2016 | wwwyolefr | Sapphire Market amp Technology
Total 22m
Units
2015 Smartwatch Shipments
bull Only other major brandusing sapphire Huawei
bull But sapphire strong withhigh lowvolume highmargin models from theSwiss Industry (TissotTAGHeuerhellip)
bull Will new Apple Watchstimulate the market andoffer strong use case
华为 300k units
Apple 蓝宝石 15m Units
Others
华为 300k units
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
20
OTHER APPLICATIONS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Smartphone
Display
Covers
Lens
FPR
Covers
Defense
amp Aero
POS
Others
Growth
Potential
Barriers to
Entry
Low
Low
High
High9020
Bubble size represents
potential 2018 revenue
Watch
Windows
Semi
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
copy 2016
Display Covers
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
22
Will New Applications Emerge
Cover Glass or No Cover Glass
copy2016 | wwwyolefr | Sapphire Market amp Technology
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
23
Drivers for
adoption
Superior scratch
resistance
Dielectric constant
Prestige appeal
Differentiation
Uncertain
Factors
Breakage
resistance
Weight
Reflectance
Unknown attributes
THE ROAD TO SAPPHIRE DISPLAY COVERS
Potential Stoppers
Higher cost
Manufacturability
Environmental footprint
Supply chain
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
24
APPLE 2013-2014 TENTATIVE SUPPLY CHAIN FOR gt 40 M UNITS YEAR
Total Investment gt US$15 billion Expected to operate at capacity from June 2014
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
25
APPLE 2013-2014 NO SAPPHIRE IN IPHONE 6
Crystal Growth
ldquoBrickingrdquo Slicing Shaping Finishing Coating
XSupply chain technology amp Apple not ready too early too fast too muchhellip
GTAT Bankruptcy
2138 furnaces
262 kg boules
bull 180+ Multi Wire Saws
bull 1000rsquos of lapping grinding polishing tools
bull 100+ Laser cutting tools
bull hellip
copy2016 | wwwyolefr | Sapphire Market amp Technology
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
26
RECENT NEWS IS THERE STILL HOPE
copy2016 | wwwyolefr | Sapphire Market amp Technology
2015
bull Apple stops collaboration with most sapphire companies
bull But Lens confirms plan for US$ 532m investment in sapphire capacity
bull Nov 25th GTAT sold 567 ASF furnaces to ldquoVast Billion Developmentrdquo
(浩億發展有限公司) for US$266m
2016
bull GTAT forecast 640 more ASF to sold over 3 years for a total of $26m
bull Remaining furnaces (~ 1170) to be scrapped
bull Biel-Roshow (伯恩露笑蓝宝石有限公司) acquires 1000 ASF ()
bull Aurora (奥瑞德) 10 in JV to install 2000 KY in Ordos in 2016 (5000 by 2018)
Massive adoption of
sapphire in display covers
now seems unlikelyhelliphellip but key players still
investing is there still hope
for 2017
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
27
APPLE STRATEGIC MOVE TO BROADER PRODUCT OFFERING
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Entry
Level
High
End
iPhone iPhone
3G
iPhone
3GSiPhone 4 iPhone 4S iPhone 5
iPhone 5S
iPhone
7
iPhone
7 Plus
iPhone
SE
2017
copy2016 | wwwyolefr | Sapphire Market amp Technology
iPhone 5C
iPhone 5S
iPhone 5C
Saturation of historic iPhone
segment Extension to entry level
since 2013
iPhone
7SiPhone
7S +
iPhone
XX
iPhone
XX
iPhone 6
iPhone
6 Plus
iPhone 6S
iPhone
6S Plus
Extend to ldquoPrordquo in 2016 and ldquoprestigerdquo categories in 2017
PrestigeiPhone
XXX
iPhone
7 Pro
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
28
HIGH END IPHONE WOULD BE GOOD CANDIDATE FOR SAPPHIRE
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull Sapphire anchors the product into the ldquoHighend Prestigiousrdquo phone category
bull Low volume easier on the sapphiresupply chain
bull High margin product better tolerance tohigh sapphire cost
2017
Premium
iPhone
With
Sapphire
Display
Cover
Wait for more signals in the supply chain through 2016hellip
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
copy 2016
Other Potential Applications
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
30
EMERGING APPLICATIONS IN DISPLAYS AND VIRTUAL REALITY
copy2016 | wwwyolefr | Sapphire Market amp Technology
100 PPI 200 PPI 600 PPI 2000 PPI
Increasing display
requirements for mobile
devices
4K TV (lt100 ppi) Smartphone 200 to 600 ppi Near Eye Displays VR ARhellip gt 2000 PPI
bull Low power consumption
bull High dynamic range
bull Wider color gamut
bull Fast response time
bull Wider viewing angles
bull Low cost
bull High pixel density (Pixel Per Inch)
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
31
MICROLED DISPLAYS
copy2016 | wwwyolefr | Sapphire Market amp Technology
Thin Film Transistor
(TFT) backplane
microLED Chips
Challenges
bull Pixel ldquopick and placerdquo
position accuracy throughput
costhellip
bull Interconnects
bull Chip driving (GaN InGaAlP)
bull Low green LED efficiency
Benefits
bull High brightness
bull Low power consumption
bull High Dynamic Range (contrast)
bull Wide color gamut
bull Curved flexible backplanes
bull Lifetime
bull Resolution Pixel density
Ostendo Microdisplay 5000 PPI
(picture Information Display)
Each pixel is an LED chip
(~ 10 microm or less area and pitch)
Illustration VerLASE
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
32
MICRODISPLAYS
Will it be about Apple again
copy2016 | wwwyolefr | Sapphire Market amp Technology
bull In 2014 Apple acquired
Luxvue a MicroLED display
Startup which had received
US$43m in VC funding
bull Many more players in the field
bull No commercial products yet
bull Limited to small displays (cost)
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
33
CONCLUSIONS
Apple
LED
Wafers
New
Applications
Consumer
Markets
Lens
covers
Biel
Lens
bull Sapphire industry in crisis
bull LED to remains the single largest application in
foreseeable future
bull Market for fingerprint + camera lens covers now mostly
captive (Biel + Lens)
bull Little hope left for display cover applicationshellip but not
gone completely some companies still investing
bull Many sapphire companies disappearing but some still
striving and increasing capacity To survive
bull Best cost position (yields product mix energyhellip)
bull Vertical integration or focus on PSS
bull Recognized quality and consistency + service
bull Strong balance sheet access to capital to operate below cash
cost until market is rationalized
bull More applications could emerge
copy2016 | wwwyolefr | Sapphire Market amp Technology
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract
34
THANK YOU
谢谢
Contact vireyyolefr
copy2016 | wwwyolefr | Sapphire Market amp Technology
Submit your abstract