Report Claims GT Advanced Will Only Supply 9% - 16% of iPhone 6 Sapphire Displays

MacRumors · Mar 14, 2014

A new report from DigiTimes Research is claiming that GT Advanced, the company that has partnered with Apple to open a sapphire plant in Mesa, Arizona, will only be able to produce anywhere from 9% to 16% of sapphire displays for Apple's next generation iPhone. The report's estimation was based on the company's forecast sales of $188 to $348 million, which indicates that Apple will be able to output roughly 6.3 to 11.6 million sapphire displays.

Assuming that the new-generation iPhone will have a 5-inch screen, then the forecast sapphire revenues are translated into output of 6.27-11.6 million 5-inch sapphire-made screen covers. As Digitimes Research estimates that Apple will ship 70 million units of the new-generation iPhone in 2014, the output of sapphire screen covers frm GTAT will account for 9.0-16.6% of the iPhone shipments.

However, the details in the report strongly contrast that of an account from analyst Matt Margoils last month, who stated that GT Advanced purchased and received a total of 518 sapphire furnace and chamber systems with another 420 machines on order.

The analyst estimated that with the sheer amount of the equipment contained in its factory, GT Advanced could produce between 103 and 116 million displays per year, with an additional 84 to 94 million possible. This would indicate that Apple could produce 100 to 200 million ~5-inch sapphire displays, which would be enough for its entire line of devices. For reference, Apple sold approximately 150 million iPhones in 2013.

The integration of a larger, scratch-resistant sapphire display is widely rumored to be one of the key new features for the iPhone 6, as the company currently uses the material for small iPhone elements such as the camera lens and the home button of the iPhone 5s.

Apple is also said to be in the process of a trial run for an iPhone using a sapphire display, as CEO Tim Cook indicated during last month's shareholders meeting that the company's sapphire production facility was for a "secret project" he could not talk about. Apple's next-generation iPhone is expected to be revealed later this year.

Update: Analyst Matt Margolis calls Digitimes' analysis "meritless", noting a number of issues such as a lack of any specific sapphire revenue disclosures from GT and Digitimes' unrealistically high estimated cost per display.

Article Link: Report Claims GT Advanced Will Only Supply 9% - 16% of iPhone 6 Sapphire Displays

jonyive4 · Mar 14, 2014

stupid DIGITIMES
NOT ONLY are they unreliable, I own a substantial amount of stocks in this company. **** DIGITIMES.

everything-i · Mar 14, 2014

The words DigiTimes and Research used together... Move along, nothing to see here.

jayducharme · Mar 14, 2014

I still can't understand why Apple would abandon Gorilla Glass in favor of sapphire for an iPhone screen. I wouldn't be surprised if the "secret project" turns out to be something different.

Gobeatty · Mar 14, 2014

This one may be easy. Top Secret Project = iWatch. Sapphire is a great choice for scratch-resistant watch glass.

Davmeister · Mar 14, 2014

Can someone explain the logic of this to me? Build most of the phone out in china and then ship it to the US and then fit the display? And then ship to Australia? Or ship displays to China, and then the whole phone back to the US? Or build it all in the US? Or just fit this glass to US sold phones? Eh?

kobyh15 · Mar 14, 2014

Gobeatty said:
This one may be easy. Top Secret Project = iWatch. Sapphire is a great choice for scratch-resistant watch glass.

On the money. Sapphire is used in watches. Makes sense Apple would use it on the iWatch.

scott911 · Mar 14, 2014

jayducharme said:
I still can't understand why Apple would abandon Gorilla Glass in favor of sapphire for an iPhone screen. I wouldn't be surprised if the "secret project" turns out to be something different.

Gorilla glass is hard to beat from a bunch of perspectives... Sapphire does however, have a cool name, and sometimes that's enough...

RichTF · Mar 14, 2014

scott911 said:
Gorilla glass is hard to beat from a bunch of perspectives... Sapphire does however, have a cool name, and sometimes that's enough...

Well, that and the fact that it's objectively harder (i.e.: scratch resistant). But discussing objective facts isn't as cool as casually dismissing stuff.

snebes · Mar 14, 2014

Davmeister said:
Can someone explain the logic of this to me? Build most of the phone out in china and then ship it to the US and then fit the display? And then ship to Australia? Or ship displays to China, and then the whole phone back to the US? Or build it all in the US? Or just fit this glass to US sold phones? Eh?

Its not uncommon. Micron DRAM is made here in the US and shipped to China for assembly on memory modules, among other products, then shipped back here.

I think its because the Chinese are shorter and are closer to the boards for assembly (can't find funny video to link

)

danfrumkin · Mar 14, 2014

Big and small iPhone differentiation

Although iWatch is the obvious place for sapphire, here is another thought.

iPhone 6, roughly same form factor, but sapphire screen.

iPhone 6c, 4.7 inch screen, plastic back, non-sapphire screen.

Both at same price point. iPhone 6 would would be the "executive" version. iPhone 6c would be the phablet version.

Dan

Boatboy24 · Mar 14, 2014

jonyive4 said:
stupid DIGITIMES
NOT ONLY are they unreliable, I own a substantial amount of stocks in this company. **** DIGITIMES.

Today may be a good day to increase that stake if the street reacts to this report.

MyopicPaideia · Mar 14, 2014

RichTF said:
Well, that and the fact that it's objectively harder (i.e.: scratch resistant). But discussing objective facts isn't as cool as casually dismissing stuff.

And there is no other objective advantage than scratch resistance.

Back to the article, how can these people be called analysts if they have absolutely zero deductions skills?

If GT is broadcasting a 2014 revenue number and that translates to so much volume of product, then the obvious conclusion is that we are looking at a product that is not a 5" screen. Why sensationalize the issue and turn it on its head and say that Apple will have to find someone else to compliment sapphire displays for the iPhone when it becomes clear that the whole sapphire screen thing for a phone just isn't happening? In what world is a sapphire screen for the phone a confirmed fact rather than a speculation in the first place?

Then of course there is a huge difference between having 500 furnaces with 400 more on order and having 900 furnaces on hand now. But of course this little subtlety is completely ignored.

Basically these guys just take whatever they want to hear and disregard the rest to make stupid baseless predictions.

tasty.

BigBeast · Mar 14, 2014

Seriously hoping Matt Margolis is right, and DigiTimes is effing wrong!

Also hoping that Apple either ditches the oleophobic coating on their sapphire display-- otherwise, you'll still see micro scratches on the display.

thebeans · Mar 14, 2014

Davmeister said:
Can someone explain the logic of this to me? Build most of the phone out in china and then ship it to the US and then fit the display? And then ship to Australia? Or ship displays to China, and then the whole phone back to the US? Or build it all in the US? Or just fit this glass to US sold phones? Eh?

Not really any different than the current situation. Gorilla glass is made by Corning in Kentucky and shipped to China for use in phones. This would be the same setup.

DonutHands · Mar 14, 2014

I highly doubt apple would be spending $30 per sapphire display cover

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Davmeister said:
Can someone explain the logic of this to me? Build most of the phone out in china and then ship it to the US and then fit the display? And then ship to Australia? Or ship displays to China, and then the whole phone back to the US? Or build it all in the US? Or just fit this glass to US sold phones? Eh?

It costs around $3k to ship a container to china. So $3k divided by however many little glass screens you can fit in a 40ft container.... The cost gets spread pretty thin.

kdarling · Mar 14, 2014

MyopicPaideia said:
If GT is broadcasting a 2014 revenue number and that translates to so much volume of product, then the obvious conclusion is that we are looking at a product that is not a 5" screen.

One reason for the difference of opinion is apparently that Digitimes is assuming $30 per slice, whereas Margolis is using much less. (Sorry, in a rush, can't look up details.)

Then of course there is a huge difference between having 500 furnaces with 400 more on order and having 900 furnaces on hand now. But of course this little subtlety is completely ignored.

+1

thebeans said:
Not really any different than the current situation. Gorilla glass is made by Corning in Kentucky and shipped to China for use in phones. This would be the same setup.

Used to be true. Now Gorilla Glass is also made in Japan and Taiwan.

\-V-/ · Mar 14, 2014

Update: Digitimes is full of morons.

charlituna · Mar 14, 2014

everything-i said:
The words DigiTimes and Research used together... Move along, nothing to see here.

Yep. They think they know what the sapphire is being used for, how much the plant can make, how many total units there will be etc.

They likely have zero info about any of this.

scott911 · Mar 14, 2014

RichTF said:
Well, that and the fact that it's objectively harder (i.e.: scratch resistant). But discussing objective facts isn't as cool as casually dismissing stuff.

nobody as cool as you Rich.

Yes - Sapphire has some benefits - but are they worth the significant cost and production complexity? For the whole screen of an i-device, my opinion is I don't think so. So, my point is that the main advantage is the marketing angle, the cool, new name.

Gobeatty · Mar 14, 2014

FWIW, I don't give two hoots about scratch resistance. We've never managed to *scratch* any of the numerous iPhones or iPads we've owned. Not saying others haven't, but for us the issue is shattering or significant cracking when dropped. If sapphire will increase drop strength against cracking and shattering, then I'm all in. If the benefit is only scratch resistance, then no benefit for us.

rotax · Mar 14, 2014

iPhone 6 is a head fake. Its for the iWatch

wigby · Mar 14, 2014

Davmeister said:
Can someone explain the logic of this to me? Build most of the phone out in china and then ship it to the US and then fit the display? And then ship to Australia? Or ship displays to China, and then the whole phone back to the US? Or build it all in the US? Or just fit this glass to US sold phones? Eh?

it's not like they have to fit each phone individually.

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scott911 said:
nobody as cool as you Rich.

Yes - Sapphire has some benefits - but are they worth the significant cost and production complexity? For the whole screen of an i-device, my opinion is I don't think so. So, my point is that the main advantage is the marketing angle, the cool, new name.

the great thing is that you don't have to worry about it. apple's not going to change the price of an iPhone and they're not going to change to a noticeably inferior material. there are pros and cons to every material. they are changing out hundreds of components in the next iPhone model that we don't know about. let them sort out the details and you can just buy or not buy your phone when it comes time.

mrxak · Mar 14, 2014

scott911 said:
nobody as cool as you Rich.

Yes - Sapphire has some benefits - but are they worth the significant cost and production complexity? For the whole screen of an i-device, my opinion is I don't think so. So, my point is that the main advantage is the marketing angle, the cool, new name.

But that's the thing. Sapphire isn't going to be used on an iPhone screen. It's going to be used for small things like watch faces, fingerprint scanners, and camera lenses. It's not a marketing gimmick, it's being used cost effectively for small things that need to not get scratched.

I doubt the advantages of sapphire will ever outweigh the cost for something like a 4" screen, unless new technology comes along that produces much higher yields. Apple may someday get there, but on nowhere near the sort of timetable Digitimes claims. It's sheer lunacy coming from a highly unreliable source. I actually cannot think of a single thing Digitimes has ever gotten right.

b0fh · Mar 15, 2014

Davmeister said:
Can someone explain the logic of this to me? Build most of the phone out in china and then ship it to the US and then fit the display? And then ship to Australia? Or ship displays to China, and then the whole phone back to the US? Or build it all in the US? Or just fit this glass to US sold phones? Eh?

Because shipping is cheap? Were you aware that Tyson flies chicken over to China to be cut up, and then fly those back to USA to sell?

And then it turns out that USA people prefer breast meat to thighs by such a large degree that the freezers full, so they fly the thighs and drumsticks back to China to sell...

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DonutHands said:
I highly doubt apple would be spending $30 per sapphire display cover

----------

It costs around $3k to ship a container to china. So $3k divided by however many little glass screens you can fit in a 40ft container.... The cost gets spread pretty thin.

Uh, it costs only hundreds to ship from China to USA, per container. Perhaps at your low volume it costs thousands.

Report Claims GT Advanced Will Only Supply 9% - 16% of iPhone 6 Sapphire Displays

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