Taiwan-based sapphire substrate maker Tera Xtal Technology will establish two subsidiaries in eastern China, each with investment of US$15 million. Sapphire substrate production at the subsidiaires will begin in the second half of 2013 at the earliest, according to the company.
Many LED firms have noted positive outlook for 2013. Tera Xtal said demand for sapphire substrates in January has been healthy and prices stable, and will continue to be so in February.
Tera Xtal recently announced plans to receive capital injection from a Hong Kong-based investment group through private placement. This investment group was established by Gong Shan Zhu, executive director, chairman, and CEO of China-based polysilicon provider GCL-Poly.
Tera Xtal stated it has signed no agreements with GCL-Poly yet. The deal is currently being reviewed by Taiwan's Investment Commission under the Ministry of Economic Affairs. If the deal obtains approval, the investment group will hold 15% of Tera Xtal shares and become the largest shareholder of the firm. It is also likely for the investment group to become a board member.
Sapphire substrate prices reached a peak in the second quarter of 2012 but as demand weakened, prices fell in the second half of 2012. According to statistics, the price for 2-inch sapphire substrates in the fourth quarter of 2012 was around US$7-7.5/unit while the prices for patterned sapphire substrates (PSS) fell from US$18/unit to US$13-14/unit.
Despite the fact that LED demand is expected to rise in 2013, industry sources pointed out that this is unlikely to help sapphire substrate prices to rebound significantly. Some sapphire substrate makers have been searching for other distribution channels such as those for handset and consumer electronics applications.
