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 Speculation had been rife in the weeks leading up to Tuesday's
unveiling of the iPhone 6 that some models would have the extra
protection after Apple partnered in November with U.S.-based GT
Advanced Technologies Inc, a mineral crystal specialist, to make
sapphire materials for its devices.
Apple said sapphire glass would be used on its first smartwatch. It
also continues to use the durable material to cover the iPhone's
camera lens and home button, but gave no hints as to if, or when,
the glass would be used on iPhone screens.
China's Huawei Technologies Co Ltd last week became the first major
handset maker to announce the use of sapphire screen covers, saying
it would release a limited edition version of its high-end phone
with such protection.
Sapphire glass is the hardest material in nature after diamonds. It
is used in LED lighting, high-end jewelry and military equipment
such as submarine and rocket windows.
According to a recent survey by used phone marketplace www.uSell.com,
the most wanted new iPhone 6 feature had been sapphire glass, which
is also more sensitive to the touch than other screen protectors.
JP Morgan expects the adoption of sapphire faceplates for
smartphones to rise several times next year, albeit from a very low
base.
Some Asian handset makers have been talking with the world's two
biggest suppliers of raw sapphire glass: U.S.-based Rubicon
Technology and South Korea's Sapphire Technology.
"All smartphone manufacturers have been meeting with all the major
sapphire producers including Rubicon," William Weissman, chief
financial officer of Rubicon, told Reuters by email.
Sapphire Technology said it had received inquiries from several
handset manufacturers, although it declined to identify any
prospective customers. Neither have secured big supply deals,
company officials say.
Companies such as Rubicon and Sapphire Technology usually sell big
chunks of glass to fabricators who then slice it into thin wafers
before polishing it.
Apple locked in exclusive supply of the material from GT Advanced
with a $578 million investment in a sapphire manufacturing facility
in Arizona.
MORE EXPENSIVE THAN GORILLA GLASS
Many analysts expect sapphire glass to be limited initially to
premium products due to high prices and the defect rates stemming
from difficulties in configuring the glass into smartphone covers.
Finished sapphire covers could cost as much as $40-$45, compared
with less than $10 for Gorilla Glass, the screen of choice for most
smartphones, according to analysts.
Another Chinese company, Xiaomi Inc, has ordered sapphire covers for
a limited edition premium smartphone, according to a recent report
by South Korea's Electronic Times. Xiaomi declined to comment.
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China's ZTE Corp would use sapphire glass on wearable devices it was
on the verge of pushing out, an executive said, but did not have
immediate plans to introduce such covers on smartphones.
"We believe it's not appropriate for large-scale use because the
sapphire supply chain remains complicated, the volume is not high
and production capacity is insufficient," said Qianhao Lv, global
marketing director of ZTE's mobile business group.
LG Electronics Inc spokesman Ken Hong said the South Korean company
had looked at sapphire screen protection but did not believe the
technology was ready yet.
Samsung Electronics Co and Taiwan's HTC Corp declined to comment.
Shenzhen-based Coolpad was not immediately available to
comment.
The sapphire industry has battled thin margins and falling prices
for years due to weak demand from the LED lighting sector, the
biggest driver of sapphire consumption. Prices of sapphire wafers
for LED lights have dropped to a quarter of where they were a decade
ago.
Sapphire crystals are created by applying high heat to purified
aluminum oxide in a cylinder called a boule, which is then sliced
into thin wafers and polished to form products.
"A major reason for the high cost is that sapphire has just begun to
catch on so the defect-free rate is not very stable ... but recently
players have been putting a lot of effort into solving this
problem," said Hsu Ya-ling, chief financial officer at Tera Xtal
Technology, a fabricator based in Taiwan.
Weissman said Rubicon was working on hybrid solutions that would
provide many benefits of sapphire as well as a couple of processes
that would eliminate the slicing and polishing steps.
Sapphire Technology is also making the boule in a rectangular shape,
which allows more smartphone faceplate cuts than bar-type boules.
(Additional reporting by Jeremy Wagstaff in SINGAPORE, Gerry Shih in
BEIJING, J.R. Wu in TAIPEI and Christina Farr in SAN FRANCISCO;
Writing by Miyoung Kim; Editing by Dean Yates)
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