At the long-awaited “Spring Forward” media event hosted by Apple on March 9, all eyes will be on the reveal of the Apple Watch, which will have a watch cover made of sapphire glass. By incorporating this material into its newest products, Apple has provided an unprecedented, game-changing opportunity for China’s sapphire industry. LEDinside, a division of TrendForce, anticipates sapphire market demand will multiply once these smart watches hit the market. LEDinside’s Senior Analyst Figo Wang further stated the sapphire manufacturing will likely become a globally competitive section of China’s materials industry.
According to LEDinside’s estimation, the total shipments of Apple Watch in 2015 will reach 20 million sets. Among the different Apple Watch models, only the Watch Sport series is not using sapphire on the watch’s cover display. To be fitted on the cover of an Apple Watch, the sapphire glass requires to go through double-sided polishing and 2.5D process, so the sapphire watch cover has to be thicker compared with that of other products. LEDinside projects a total of 30.8 million millimeters of two-inch equivalent sapphire ingot will be used for the Apple Watch covers in 2015. This accounts for 18% of sapphire ingots produced worldwide for the entire year. Facing this new surging demand, the sapphire industry can look forward to a dramatic improvement in the market demand and supply.
With Lens Technology and Biel Crystal as vanguards, Chinese sapphire makers join the Apple Watch supply chain
The sapphire covers for Apple’s smart watches are sourced from two Chinese suppliers: Lens Technology and Biel Crystal. Due to technology, costs, and geography, Chinese sapphire makers intend to work closely with these two major glass suppliers. Through cooperation, they will be able to get the most benefit from the supply chain.
Wang further noted, “Being the suppliers to Apple’s optical glass, Lens Technology and Biel Crystal have paid close attention to the application of sapphire glass in consumer electronics.” Lens Technology’s total revenue in 2014 reached RMB 14.49 billion. As its biggest client, Apple accounted for 47.44% of Lens Technology’s revenue for that year. Lens Technology’s official IPO is set on March 10th, when the company will be listed on ChiNext board of the Shenzhen Stock Exchange. Biel Crystal also has a long and established relationship with Apple that began earlier than Lens Technology’s.
China’s sapphire makers have the geographical advantage that allow them to work closely with these two major domestic glass processors during the R&D phase. This alliance with Lens Technology and Biel Crystal aims to improve the makers’ production and processing, so they will be able to increase their yield rates and satisfy Apple’s demands. One of these partners, Harbin Aurora Optoelectronics, has even netted orders from both Lens Technology and Biel Crystal, thus benefitting fully from orders for Apple Watch products. With these gains, Harbin Aurora will be able to position itself next to Russia’s Monocrystal as another global giant in the sapphire industry.