Apple Inc.’s sapphire material supplier GT Advanced Technologies Inc. (GTAT) is reported to have started shipping small quantities of sapphire to one of Apple’s foundry partners in mainland China as early as March, and is preparing to start mass production in the second half of this year (2014).
AppleInsider, 9to5Mac and many other foreign sources reported on April 30 that Stephen Chin, an analyst at UBS AG, published a research report this week stating that a supply chain survey showed that JITE's sapphire plant in Arizona apparently began mass production of sapphires as early as March, but the initial output was not large. It is said that only 100 crystal growth furnaces have been activated. It is estimated that 1,500 more crystal growth furnaces will be installed in the second half of the year.
According to the investigation, JITE shipped only about 2,200 kilograms of sapphire crystal ingots to the mainland in March. Analyst Matt Margolis, who previously broke the news about JIT's purchase of Apple's sapphire crystal growth furnace, said on his blog on April 30 that based on UBS's report, 2,200 kilograms of sapphire crystal ingots can produce approximately 100,000 to 115,000 sapphire screens, and JIT may price these sapphire screens at between US$8.50 and US$10 per piece.
However, Chin believes that Apple’s mainland OEM partners should currently use these limited sapphire materials to make the scratch-resistant protective layer of the iPhone 5s “Touch ID” home button and the protective cover of the camera lens.
In addition, Chin also estimated in the report that JiTe’s sapphire shipments in March were only about US$1 million. Once the Arizona factory reaches full production capacity, Apple’s mainland foundry partners will receive approximately US$50 million worth of sapphire materials every month.
JiTe just confirmed receipt of the third advance payment from Apple for the sapphire supply contract last week, and Chin believes that JiTe will receive the fourth and final advance payment in May. According to Chin's investigation, the sapphire material quotation provided by JITE is about 25% cheaper than that of other Apple suppliers.
According to market rumors, JITE began to expand the operating scale of its Arizona sapphire factory in March, possibly to accommodate unknown components with increased production yields. In addition, documents submitted to the U.S. International Trade Administration (International Trade Administration) in January also showed that Apple will actively expand the production capacity of a certain key sapphire component by the end of February, and the components will be sent out of the United States for assembly.
ANNA