Prices for The Product in The Second Quarter of 2012 Are Expected to Remain

As production of sapphire wafers by China-based makers will gradually increase, prices for the product in the second quarter of 2012 are expected to remain at current levels, according to industry sources in Taiwan. Taiwan-based makers have increased prices for a 2-inch sapphire wafer from US$7-8 in the fourth quarter of 2011 to US$8-9 in the first quarter of 2012. However, China-based competitors, under the China government's subsidization and tax incentives, have the advantage of lower production costs and thus quotes are US$8 currently, posing competitive pressure on Taiwan-based makers, the sources indicated. Taiwan-based LED chip maker Formosa Epitaxy has received applications for sapphire wafer certification from four to five China-based makers and 2-3 have obtained certification and are expected to begin small-volume production in the first quarter of 2012, according to the company. As supply will increase, there will be no room for sapphire wafer prices to rise in the second quarter, Formosa Epitaxy pointed out. Epistar, another Taiwan-based maker of LED chips, has adopted China-made sapphire wafers to produce AlGaInP LED chips, the company indicated. In addition, there are China-based makers offering sapphire wafers used to make blue LED chips for its certification, and it will speed up the certification process to increase sources of supply, Epistar pointed out. In order to minimize production costs, Taiwan-based Crystal Applied Technology (CAT) and Alpha Crystal Technology will set up factories of sapphire wafers in China and Crystalwise Technology has done so. CAT on March 19 released its 2011 financial report, recording revenues of NT$1.948 billion (US$63.9 million, down 11.7% from 2010), gross margin of ��10.77%. net loss of NT$295 million and net loss per share of NT$5.39. Source: www.digitimes.com