Did you know that Apple will be the largest producer of synthetic sapphire, in the world? Here is a great Wall Street Journal Article on the new use for synthetic sapphires: New iPhone: A Sapphire Screen and a Higher Cost Apple Considers Using Harder Material in Pricier Models By Daisuke Wakabayashi Aug. 14, 2014 2:51 p.m. ET Apple is betting $700 million that sapphire, a harder and more expensive material, can replace glass and better protect the newest iPhone. WSJs Daisuke Wakabayashi joins the News Hub with Sara Murray. Apple Inc. created the blueprint for a smartphone when it covered the touch screen of its first iPhone in glass instead of plastic. Now, it is betting $700 million that sapphire, a harder and more expensive material, can replace glass and better protect future devices. Enlarge Image Close Synthetic sapphire is designed to replicate one of the hardest minerals on earth but is costly to produce, Pictured, a 15 diameter sapphire boule before it is cut into its final shape. GT Advanced Technologies The first sapphire display screens for the forthcoming larger iPhone and smartwatch are expected to roll off production lines this month at a Mesa, Ariz., facility that Apple opened with materials manufacturer GT Advanced Technologies Inc. At full capacity, the plant will produce twice as much sapphire as the current output from the nearly 100 manufacturers world-wide, says Eric Virey, a senior analyst at French research firm Yole Développement. More on iPhones • Poll: Would You Pay More for a Tougher Screen? • Apple to Introduce New iPhones Sept. 9 (Aug. 5) • IPhone Rollout Boosts Asias Component Makers (July 23) • Apple Readies Big Bet on Big-Screen Phones (July 22) • Apple Enters Pact for Arizona Sapphire Plant (Nov. 4, 2013) Nobody has ever invested this much money on sapphire, Mr. Virey says. GT and Apple are producing synthetic sapphire, designed to replicate the properties of one of the hardest minerals on earth. Sapphire doesnt crack or scratch as easily as glass. It withstands high temperatures and resists chemical corrosion. Manufacturing synthetic sapphire is costly, so the material has been used sparingly, in airplane windows and armored vehicles to protect against extreme conditions or as a scratch-resistant cover for expensive watches. Apple already uses sapphire to cover the iPhones camera lens and fingerprint reader. But broader use of the material could ease another big headache: damaged phone screens. Enlarge Image Close SquareTrade, which offers warranties for damaged screens, estimates that 11% of iPhone owners have devices with cracked or broken screens. Changing a component as important as the screen carries a fair amount of risk. Corning Inc., which makes the heavy-duty Gorilla Glass used in todays iPhones, has proven that it can meet Apples demands to speed production and churn out millions of phones ahead of a new product release. If Apple and GT run into problems producing sapphire on a large scale, that could throw a wrench into Apples supply chain, creating shortages during peak demand. It also isnt clear that sapphire will outperform current materials in real-world use. Analyst Mr. Virey estimates that a sapphire screen could cost $16 to produce, compared with about $3 for Gorilla Glass. Apple and GT declined to comment for this article. Apple is considering using sapphire screens in more expensive models of the two new, larger iPhones it plans to debut this fall, if it can get enough of the material, people familiar with the matter say. Some analysts expect Apple to charge more for the phones than previous new models, because of increased component costs. If the use of sapphire leads to fewer broken screens, Apple may save money in warranty costs. But Bernstein Research analyst Toni Sacconaghi says those savings likely wouldnt offset sapphires higher cost. If Apple doesnt raise prices, the higher cost could erode the iPhones profit margins, says Matt Margolis, an analyst at PTT Research and a GT investor. He says Apple may be willing to absorb the hit to separate its products from those of rivals. Apple has invested heavily in components to make its products stand out. It designed its own 64-bit processor for mobile devices, helping the company leapfrog competitors. The Cupertino, Calif., company acquired AuthenTec Inc., a maker of fingerprint-sensor technology, in 2012 and last year introduced a fingerprint reader in the iPhone 5S. For sapphire, Apple last year bought the 1.4-million-square-foot Arizona facility—about the size of two dozen football fields—from a solar-panel producer for $113 million and leased it to GT, a leading maker of furnaces used to produce sapphire. In November, Apple agreed to prepay GT $578 million to outfit the factory with cutting-edge furnaces. GT is operating the factory to produce sapphire exclusively for Apple. WSJD is the Journals home for tech news, analysis and product reviews. • Lenovo Takes On Apple, Samsung • In Africa, a Telco Disruptor Looks for Gaps Amongst Giants • Why the U.S. Cant Automatically Retaliate in Cyberspace, Yet • Is Encrypted Messaging Entering the Mainstream? GT Chief Executive Tom Gutierrez told analysts last week that the Arizona facility was nearly complete and was starting the transition to high-volume production. He said the plant wouldnt reach full operational efficiency until early next year. GT said it expected Apple to pay the last of its four prepayments, of $139 million, by the end of October, contingent on GT meeting certain operational targets. Sapphire is scratch-resistant. But it isnt clear if the material will better protect against screens breaking, since sapphires strength depends on its thickness and cut. Sapphire also is denser than glass, which will add to the phones weight. Corning says its Gorilla Glass has outperformed other materials, including sapphire, in tests in which screens are dropped from different heights. It also says Gorilla Glass reflects less light than sapphire, making the glass easier to view in sunlight. A few small smartphone manufacturers have already introduced handsets with sapphire screens. Britains Vertu Corp., which makes luxury phones costing more than $10,000, has two models with sapphire screens. Japans Kyocera Corp. introduced the Brigadier, a phone that the company says is virtually scratchproof. Natural sapphires are gem varieties of corundum, a crystalline form of aluminum oxide. Impurities such as copper or magnesium change the color, creating the gems used in jewelry. Without such impurities, sapphire is clear. Sapphire crystals are grown in massive furnaces at high temperatures. GT Advanced Technologies Mass-producing sapphire is complex. Sapphire crystals are grown in massive furnaces at high temperatures. After the ingredients crystallize in an energy-intensive process, the result is a giant hockey-puck-shaped cylinder called a boule, which is carved into different shapes. Apples Arizona plant is using next-generation furnaces capable of producing boules larger than 440 pounds. By forming boules more than 50% larger than produced by current machines, Apple and GT aim to drive down the price of sapphire and close the gap with glass. Before the Apple investment, I would have said sapphire is a great material with great potential but its a few years out from becoming a market reality, says Vinita Jakhanwal, director of mobile and emerging display technologies at research firm IHS Technology. But Apple has invested a significant amount, so it would be fair to say that the company probably expects a return on its investment pretty quickly. —Lorraine Luk, Eva Dou and Mayumi Negishi contributed to this article. Write to Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj
Posted on: Sun, 17 Aug 2014 03:14:21 +0000
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