GT Advanced will only be able to meet 9%–16.6% of demand for sapphire glass used in the cover of the iPhone 6, a new report from Digitimes Research claims. It’s a fact that the partnership between GT Advanced and Apple to open a sapphire glass plant in Mesa, Arizona, went public only last year, but the Digitimes report is in sharp contrast with what others reported earlier this year.
Digitimes Research bases its estimates on GT Advanced’s forecast sales of $188 to $348 million. This led them to conclude that this translates to up to 11.6 million 5-inch sapphire-glass screen covers. Their math is simple: since the current cost of a 4-inch sapphire wafer is $30, they have divided those sales forecast numbers by 30 to find out the output.
The 11.6 million units is low compared to previous forecasts of 70 million iPhone 6 units, as it accounts only for 9%–16.6% of all future iPhone shipments.
However, it is worth noting that GT Advanced has a projected annual revenue of $800 million, and the sapphire segment accounts for more than 80% of the total revenue, the company stated earlier in February.
Also, you may recall that the goal behind the Apple-GT Advanced partnership was to significantly lower production costs by minimizing and, in some cases, eliminating the need for wafer saws, for example.
These are the same reasons why analyst Matt Margolis calls the Digitimes report meritless.