US-based sapphire substrate maker Rubicon has announced fourth-quarter 2012 revenues with on-quarter increase. However, the contract between Rubicon and Korea-based LG Innotek ended in mid-December 2012, and this means sales of Rubicon's 6-inch sapphire ingots and substrates will be impacted.
In the past, 90% of LG Innotek's sapphire ingot came from Rubicon and as the two firms terminated the contract, South Korea-based sapphire makers such as Iljin Display, LG Siltron, DK Aztec and Biemt are likely to benefit.
According to Digitimes Research, LG Innotek began to expand its 6-inch production capacity in 2010 and Rubicon was the only sapphire ingot maker that provided 6-inch products. Therefore, LG Innotek and Rubicon signed a supply agreement to ensure steady supply of the upstream material.
However, the contract price did not get adjusted despite the weakening global demand for LEDs in second-half 2011. With other problems such as product quality issues, the two firms decided to terminate the supply contract.
Rubicon's first-quarter 2013 revenues are predicted to show a quarterly decrease of 60%.
