As PSS (patterned sapphire substrate) makers have been expanding production capacities, PSS supply has significantly increased and therefore Taiwan-based LED epitaxial wafer and chip makers have asked PSS makers to lower quotes for a 4-inch PSS to US$40, according to industry sources in Taiwan.
Taiwan- and China-based PSS makers have been shifting mainstream production from 2-inch PSS to 4-inch models and have focused capacity expansion on 4-inch PSS, the sources said. For example, Taiwan-based Rigidtech Microelectronics and Crystalwise Technology have been expanding monthly PSS production capacities to 1.2 million and 800,000 2-inch equivalent units respectively, and Taiwan-based ITO glass maker AimCore Technology has stepped into PSS production with planned monthly capacity of 100,000 units initially, the sources indicated. Consequently, PSS prices have dropped from US$51 in the first quarter of 2014 to US$42-45 currently, the sources said.
Russia-based sapphire ingot and wafer maker Monocrystal and Japan-based fellow maker Kyocera have brought price competitive pressure on Taiwan-based fellow makers due to devaluation of the Russian Ruble and Japanese Yen respectively, the sources indicated. Many Taiwan-based LED makers have procured sapphire wafers produced by Monocrystal and/or Kyocera for being processed into PSS in Taiwan, the sources said.
In order to obtain more orders, many Taiwan-based PSS makers have tapped the China market through setting up factories there to avoid customs tariffs of about 11%, the sources indicated. For these makers, revenues from the China market are expected to increase to 15-20% of total revenues in 2015, the sources said.
