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The Semiconductor Industry Association (SIA) today announced worldwide sales of semiconductors were $27.9 billion for the month of July 2015, a decrease of 0.9 percent from July 2014 when sales were $28.1 billion. Global sales from July 2015 were 0.4 percent lower than the June 2015 total of $28.0 billion. Regionally, sales in the Americas were roughly flat in July compared to last year, while sales in China increased by nearly 6 percent. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Global semiconductor sales have slowed somewhat this summer in part due to softening demand, normal market cyclicality, and currency devaluation in some regional markets,” said John Neuffer, president and CEO, Semiconductor Industry Association. “Despite these headwinds, year-to-date global sales through July are higher than at the same time last year, which was a record year for semiconductor revenues.”

Regionally, year-to-year sales increased in China (5.6 percent), Asia Pacific/All Other (1.0 percent), and the Americas (0.8 percent), but decreased in Europe (-12.5 percent) and Japan (-13.3 percent), in part due to currency devaluation. On a month-to-month basis, sales increased in Japan (2.7 percent), China (0.6 percent), and Europe (0.4 percent), but fell slightly in the Americas (-0.3 percent) and Asia Pacific/All Other (-2.5 percent).

“One key facilitator of continued strength in the U.S. semiconductor industry is research, the lifeblood of innovation,” Neuffer said. “SIA and Semiconductor Research Corporation this week released a report highlighting the urgent need for research investments to advance the burgeoning Internet of Things and develop other cutting-edge, semiconductor-driven innovations. Implementing the recommendations in the report will help the United States harness new technologies and remain the world’s top innovator.”

July 2015

Billions

Month-to-Month Sales                               

Market

Last Month

Current Month

% Change

Americas

5.53

5.52

-0.3%

Europe

2.83

2.84

0.4%

Japan

2.57

2.64

2.7%

China

8.13

8.18

0.6%

Asia Pacific/All Other

8.94

8.71

-2.5%

Total

27.99

27.88

-0.4%

Year-to-Year Sales                          

Market

Last Year

Current Month

% Change

Americas

5.47

5.52

0.8%

Europe

3.24

2.84

-12.5%

Japan

3.04

2.64

-13.3%

China

7.75

8.18

5.6%

Asia Pacific/All Other

8.63

8.71

1.0%

Total

28.13

27.88

-0.9%

Three-Month-Moving Average Sales

Market

Feb/Mar/Apr

May/Jun/Jul

% Change

Americas

5.61

5.52

-1.7%

Europe

2.89

2.84

-1.8%

Japan

2.54

2.64

3.8%

China

7.77

8.18

5.2%

Asia Pacific/All Other

8.74

8.71

-0.3%

Total

27.56

27.88

1.2%

Related news: 

Tech, academic leaders call for robust research investments to bolster U.S. tech leadership, advance IoT

The U.S. Department of Defense (DoD) today awarded FlexTech Alliance a Cooperative Agreement to establish and manage a Manufacturing Innovation Institute (MII) for Flexible Hybrid Electronics (FHE MII). The award is for $75 million in federal funding over a five-year period and is being matched by more than $96 million in cost sharing from non-federal sources, including the City of San Jose, private companies, universities, several U.S. states, and not-for-profit organizations. FlexTech Alliance’s winning proposal results in the first of seven MIIs to be headquartered on the West Coast. The DoD’s Manufacturing Technology Program Office (ManTech) oversees the MIIs.

U.S. Secretary of Defense, Ashton Carter, delivered today’s announcement at National Full-Scale Aerodynamics Complex at NASA’s Ames Research Center in Moffett Field. FlexTech Alliance, a research consortium and trade association, successfully proposed a San Jose-based hub and node approach to create the FHE MII, which comprises 96 companies, 11 laboratories and non-profits, 42 universities, and 14 state and regional organizations.

The Institute’s activities will benefit a wide array of markets beyond defense, including automotive, communications, consumer electronics, medical devices, health care, transportation and logistics, and agriculture. While the Institute will be headquartered in San Jose, existing nodes around the country already have in place an infrastructure ready to solve some of the known manufacturing challenges. The Institute will distribute R&D funds via competitively-bid project calls. Industry-generated technology roadmaps will drive project calls, timelines and investments.

Additionally, education and training in FHE manufacturing will be emphasized in order to expand the available workforce. A “Flex School” concept will be developed through partnerships with community colleges, teaching and research universities, trade associations, and professional societies.

Michael Ciesinski, president and CEO of FlexTech Alliance, said, “FlexTech is privileged to accept this award from the Defense Department to stand up and lead the FHE MII. Our partners collaborated on a superb proposal that links a national hub in San Jose to a network of centers of excellence throughout the U.S. We are excited by the FHE manufacturing challenge and eager to get operations underway.”

Flexible hybrid electronics, an emerging manufacturing capability, enables the integration of thin silicon electronic devices, sensing elements, communications, and power on non-traditional flexible substrates. FHE has the potential to re-shape entire industries, from the electronic wearable devices market, to medical health monitoring systems, to the ubiquitous sensing of the world around us – also known as the Internet of Things. To be successful, the Institute will need to engage aspects of the integrated circuit (IC) industry, the graphics printing industry, and the electronic assembly/packaging industry.

FlexTech

Click to view full size.

The new institute is part of the National Network for Manufacturing Innovation program (NNMI). The FHE MII is the seventh MII announced—the fifth under DOD management. The NNMI program is an initiative of the Obama Administration to support advanced manufacturing in the U.S. Each institute is part of a growing network dedicated to securing U.S. leadership in the emerging technologies required to win the next generation of advanced manufacturing.  Bridging the gap between applied research and large-scale product manufacturing, the institutes bring together companies, universities, other academic and training institutions, and Federal agencies to co-invest in technology areas that benefit the nation’s commercial and national defense interests.

“The intent of the MII is to draw in the country’s ‘best of the best’ scientists, engineers, manufacturing experts and business development professionals in the field of flexible hybrid electronics,” stated Dr. Malcolm Thompson, Executive Director-designate of the Institute. Under the FlexTech proposal, the Hub provides overall program direction, is the integrator of components, creates prototypes, and matures manufacturing readiness levels (MRLs). “Fast start” projects for equipment, materials, devices and other vital components will make use of existing node facilities and key personnel from around the country.

Manufacturing provides well-paying job opportunities at a range of educational levels in occupations spanning engineering, production, logistics and sales. Commenting on the Institute’s local impact, San Jose Mayor Sam Liccardo noted, “San Jose ranks number one in the nation for Advanced Technology Industries, and is in the top two for Advanced Manufacturing.  Here in Silicon Valley, our extensive advanced manufacturing capability is essential for new product innovation across a range of growth areas—including wearable electronics, medical devices, connected vehicles, and clean tech.  The Manufacturing Innovation Institute for Flexible Hybrid Electronics will accelerate growth of companies and good jobs in San Jose. This decision affirms San Jose’s role as global hub for innovation advancing the Internet of Things.”

To complement the San Jose hub, key technology nodes will be linked and include IC thinning, system design and fabrication, integration and assembly, and FHE applications. Several regional nodes have been recognized and more are expected.  Those currently aligned to the institute are centers and educational institutions throughout California, along with Alabama, Arizona, Arkansas, Connecticut, Georgia, Indiana, Massachusetts, Michigan, New York, North Dakota, Ohio and Texas.

Congressman Mike Honda (D-17) said, “Congratulations to the FlexTech team and Silicon Valley for being selected as the latest Manufacturing Innovation Institute.  As the epicenter of American innovation, Silicon Valley is uniquely poised to be the leader in advanced manufacturing. Headquartering this Flexible Hybrid Electronics hub in San Jose ensures that the best of Silicon Valley’s tremendous academic, commercial, industrial, public, and labor resources are available to bridge the technology transfer gap and develop this emerging, game-changing technology as it reshapes the electronics industry and brings good-paying, middle-class manufacturing jobs to the Bay Area.”

FlexTech Alliance is an industry association focused on growth, profitability, and success throughout the manufacturing and distribution chain of flexible, printed electronics, and displays. By facilitating collaboration between and among industry, government, and academia, FlexTech Alliance develops solutions for advancing these technologies from R&D to commercialization.

Cima NanoTech, a developer and manufacturer of transparent conductive film solutions, announced today that it has entered into a joint venture with Foxconn, the world’s largest ICT technology provider and vertically integrated device manufacturer, to deliver the industry’s first cost-competitive, projected capacitive (pro-cap) solution for large format touch screens. Both companies will sell SANTE ProTouch modules through Cima Touch, the company formed under this joint venture.

Foxconn’s expertise in the mass production of reliable, high-quality products, coupled with Cima NanoTech’s proprietary SANTE self-assembling nanoparticle technology, delivers a cost-competitive solution for customers looking to shift from infrared (IR) touch technology to pro-cap multi-touch solutions and systems.

“SANTE ProTouch modules will be manufactured at our newly established manufacturing facilities,” said Jon Brodd, CEO of Cima NanoTech. “Having a full, in-house supply chain for large format projected capacitive touch solutions is an industry first, and ensures that we have full control over the quality and reliability of SANTE ProTouch modules.”

SANTE ProTouch modules provide users with ultra fast response for an intuitive multi-user, multi-touch experience, making it an ideal solution for interactive digital signage, interactive kiosks, interactive tabletops and interactive whiteboards. The overall design and product appeal of the touch system is also enhanced with edge-to-edge cover lens and narrow bezel.

“Cima NanoTech has a cutting-edge, disruptive technology which puts them at the forefront of high performance innovations.” said Kevin Chen, Director of Foxconn Technology Group. “Our partnership with Cima NanoTech enables us to break new ground and address the rapidly growing large format touch market.”

SANTE ProTouch modules are available in sizes ranging from 40” to 85”. The non-moiré characteristic of SANTE self-assembling nanoparticle technology makes it compatible with all LCD display models in the market; the highly customizable nature of SANTE ProTouch modules also provides manufacturers and system integrators with the freedom to design features such as cover lens thickness, glass type and bezel width.

SUSS MicroTec, a global supplier of equipment and process solutions for the semiconductor industry and related markets, and the Singh Center for Nanotechnology at the University of Pennsylvania (Penn) are announcing a cooperation agreement in the field of nanoimprint technologies. As part of this cooperation, Penn has recently received the equipment set and the technology know-how for Substrate Conformal Imprint Lithography (SCIL), that will expand the capabilities of the recently installed MA/BA6 Gen3 Mask Aligner from SUSS MicroTec at Penn.

Substrate Conformal Imprint Lithography (SCIL) is a nanoimprint technique combining the advantages of both soft and rigid stamps, allowing large-area patterning and sub-50nm resolution to be achieved at the same time. SCIL is applied in diverse fields, ranging from HB LEDs, Photovoltaics, MEMS, NEMS and mass production of optical gratings for gas sensing and telecommunications.

The Singh Center for Nanotechnology will implement SCIL for use in plasmonic devices, semiconductor nanowires, flexible nanocrystal electronics, biodegradable sensors and MEMS batteries.  In addition, Lithography Manager Dr. Gerald Lopez will lead the Center’s efforts in qualifying new nanoimprint materials and related process technology development in close cooperation with SUSS MicroTec.

As a further important part of the cooperation, SUSS MicroTec`s customers will gain direct access to the cleanroom facilities and the equipment set installed at Penn, serving as a demonstration center for North American customers. The experience and high technology level of Penn allows the customer to see the entire process flow, the imprinting process itself and the subsequent steps up to a finished device.

“We are pleased to collaborate with SUSS MicroTec for developing applications with SCIL. By combining our strengths in micro- and nanofabrication, we are able to provide superior nanoimprint capabilities to our researchers,” stated Professor Mark Allen, Scientific Director of the Singh Center for Nanotechnology and Alfred Fitler Moore, Professor of Electrical and Systems Engineering. “This industrial partnership enhances our ability to demonstrate how nanoimprint technology serves as a catalyst in research and its translation into the commercial sector.”

“We are very happy about the cooperation with the Singh Center for Nanotechnology. Their work will contribute strongly to further commercialize this large area nano-patterning technique in order to accelerate the adoption for volume production. In addition, our customers do not just benefit from the possibility to use Penn’s facilities and get insights to the entire imprinting process, but also from Penn´s knowledge, by having an experienced partner at hand”, says Ralph Zoberbier, General Manager Exposure and Laser Processing of SUSS MicroTec.“

Due to decreased information technology (IT) demand, and global currency issues that resulted in higher import prices in most regions, overall large-area TFT LCD unit shipments in the first half (H1) of 2015 fell 2 percent year over year to reach 340 million units. Display shipments for tablet PCs fell 17 percent, notebook PC displays declined 6 percent, and PC monitor displays fell 8 percent, while LCD TV panel unit shipments increased by 11 percent, according to IHS Inc. (NYSE: IHS), a global source of critical information and insight.

“IT panel makers suffered from poor demand and excess inventory from last year, while aggressive procurement by global TV brands kept TV panel demand high,” said Yoonsung Chung, director of large area display research for IHS Technology. “Actual TV sell-in over the first half of this year is still lower than expected, however, due to frozen demand caused by global currency exchange issues.”

TV panel prices were high in H1 2015 and, as a result, TV brands suffered, while IT panel pricing followed market demand, according to the latest IHS Large Area Display Market Tracker.  “With the lower-than-expected TV sell-in, TV makers are expected to have higher inventories. This will result in a decrease in TV panel demand, which will weigh on TV panel prices in the second half of 2015,” Chung said.

Large_Area_TFT_LCD_1H15_result

Large-area TFT LCD shipments in terms of area grew 8 percent year over year, reaching 77 million square meters in H1 2015. TV panels comprised three quarters (77 percent) of all TFT LCD area shipments, but only 39 percent of unit shipments. “Comparatively stable TV shipment area in the first half of 2015 helped TFT LCD panel makers maintain utilization and profits despite declining IT panel demand,” Chung said

The Semiconductor Industry Association (SIA) today announced worldwide sales of semiconductors reached $84.0 billion during the second quarter of 2015, an increase of 1.0 percent over the previous quarter and 2.0 percent compared to the second quarter of 2014. Global sales for the month of June 2015 reached $28.0 billion, an uptick of 2.0 percent over the June 2014 total of $27.4 billion and a decrease of 0.4 percent from last month’s total of $28.1 billion. Year-to-date sales during the first half of 2015 were 3.9 percent higher than they were at the same point in 2014. All monthly sales numbers are compiled by the World Semiconductor Trade Statistics (WSTS) organization and represent a three-month moving average.

“Macroeconomic headwinds and softening demand have slowed global semiconductor market growth somewhat, but the industry still posted its highest-ever second-quarter sales and remains ahead of the pace of sales set in 2014, which was a record year for semiconductor revenues,” said John Neuffer, president and CEO, Semiconductor Industry Association. “The Americas market continues to post solid year-to-year sales increases, and the global market has now grown on a year-to-year basis for 26 consecutive months.”

Regionally, sales increased compared to June 2014 in China (7.8 percent), the Americas (5.6 percent), and Asia Pacific/All Other (5.2 percent), but fell in Europe (-11.5 percent) and Japan (-13.6 percent). Sales were up slightly compared to last month in Japan (1.0 percent) and China (0.6 percent), but down somewhat in Asia Pacific/All Other (-0.6 percent), the Americas (-1.6 percent), and Europe (-1.7 percent). Sales figures in Europeand Japan have been impacted somewhat by currency devaluation.

“Global semiconductor sales are one indicator of the strength of the U.S. industry, which accounts for more than half of total global sales,” Neuffer said. “Policymakers in Washington should enact policies that do more to promote innovation and allow our industry to compete more effectively globally. We applaud the newly formed Congressional Semiconductor Caucus – led by Sen. James Risch (R-Idaho), Sen. Angus King (I-Maine), Rep. Pete Sessions (R-Texas), and Rep. Zoe Lofgren (D-Calif.) – for working to advance pro-growth policies that will strengthen the U.S. semiconductor industry and our economy.”

June 2015

Billions

Month-to-Month Sales                               

Market

Last Month

Current Month

% Change

Americas

5.62

5.53

-1.6%

Europe

2.87

2.83

-1.7%

Japan

2.54

2.57

1.0%

China

8.08

8.13

0.6%

Asia Pacific/All Other

9.00

8.94

-0.6%

Total

28.11

27.99

-0.4%

Year-to-Year Sales                          

Market

Last Year

Current Month

% Change

Americas

5.24

5.53

5.6%

Europe

3.19

2.83

-11.5%

Japan

2.97

2.57

-13.6%

China

7.54

8.13

7.8%

Asia Pacific/All Other

8.50

8.94

5.2%

Total

27.44

27.99

2.0%

Three-Month-Moving Average Sales

Market

Jan/Feb/Mar

Apr/May/Jun

% Change

Americas

5.81

5.53

-4.7%

Europe

2.96

2.83

-4.4%

Japan

2.55

2.57

0.8%

China

7.83

8.13

3.8%

Asia Pacific/All Other

8.57

8.94

4.4%

Total

27.70

27.99

1.0%

Sapphire is the key material for LED manufacturing. But in 2015, 20 percent of sapphire will be used in Apple’s iPhone, for the camera lens, fingerprint readers and heart rate monitors covers, and the Apple watch’s window. The new Yole Développement (Yole) report on Sapphire Applications & Market 2015: from LED to Consumer Electronic provides a complete update of all sapphire uses, from LED substrates to consumer applications.

Today, the sapphire industry looks very different, depending on your perspective. The market for sapphire wafers for LED manufacturing is depressed. Wafer prices often fall below manufacturing cost. There is excess capacity that will be able to supply the needs of the industry through to at least the end of the decade. Consequently, companies are shutting down one after the other.

By contrast, the use of sapphire is booming for non-LED applications, driven by Apple’s choice of this material to protect various sensors, and this may be just the beginning. The company decided not to use sapphire for the iPhone 6 family’s display covers, a decision that led to the bankruptcy of GTAT. But now there are signs in the industry that the mobile phone maker is again looking at sapphire as the solution for display covers. Multiple companies are apparently attempting to position themselves in the potential future supply chain. The moves include Lens Technology investing US$532 million investment in a new Chinese sapphire facility, a US$98 million injection in GTAT, the plans of Biel’s joint venture with Roshow for a huge expansion in Inner Mongolia, and several other initiatives.

sapphire companies

Click to view full size.

There were many reasons for Apple’s 2014 decision not to use sapphire in display covers, but they can be summarized as “too fast, too much, too soon.” The project was ambitious in its timeframe and targeted outputs, but many of the necessary processes and technologies in crystal growth and finishing were still at an early stage of development. Yet the venture still set the stage for the future. The partners have developed unrivalled expertise in working with sapphire in a high-volume, cost-controlled environment. A lot was also learned in manufacturing of the complex 3D-shaped Apple Watch cover. But the question remains: why use sapphire?

At more than five times the cost of glass, benefits in term of breakages are still far from obvious and its high reflectivity washes out displays. Sapphire won’t sell for a premium and increase Apple’s market share just on glamour and cachet. If the company eventually adopts sapphire, it means that it would have either demonstrated that it can improve breakage resistance compared to glass and/or developed entirely new functionalities enabled by some unique properties of sapphire.

To exist and thrive, the display cover market needs Apple to take the lead and to succeed. Otherwise, only Huawei seems in a position to propel this market, but not at the same level. And alternative technologies are emerging. Various phone manufacturers recently adopted alumina-coated glass display covers to provide superior scratch resistance. Sapphire Applications & Market 2015: from LED to Consumer Electronic report from Yole presents and analyzes the recent trends in this market, including cost structures, investments and alternative technologies.

In 2015, LEDs still consume 76 percent of the sapphire supply, but oversupply is affecting revenue and profitability. Capacity has increased non-stop since 2009, despite prices being at or below cost for most suppliers since late 2011. The market is oversupplied two or threefold, depending on product category. But the situation is complex. Tier one vendors often operate at high utilization rates and keep increasing capacity. Tier two companies operate at low utilization rates or not at all.

Companies such as BIEMT or Sumitomo Metal Mining recently disappeared or exited the business. The big winners in 2014 were Monocrystal, Aurora, Namiki, Rigidtech and Crystalwise, which all managed to increase volumes and revenue. Global revenue from sapphire cores, bricks and wafers reached US$1.1 billion. Adding finished components produced by Biel, Lens Technology, Crystal Optech and others, revenue reached US$1.8 billion, including the notable performance of Saifei, which supplied the Kyocera Brigadier’s sapphire display cover.

Under strong price pressure, the sapphire industry successfully reduced its costs – but prices are falling even faster. An 18 percent average selling price decrease in 2015 wiped out potential gains from a 16 percent volume increase in LED wafer shipments. “We expect prices to keep decreasing, resulting in an LED wafer market remaining essentially flat in revenue despite a 5.2 percent CAGR growth in volume expected through to 2020,” said Eric Virey, Senior, Technology & Market Analyst at Yole. Optical wafers may also struggle if Yole’s scenario of Apple phasing out its current sapphire fingerprint reader technology for an “In Display” fingerprint sensor materializes in 2018.

IC Insights’ new 185-page Mid-Year Update to The McClean Report, which will be released later this week, examines the recent surge of M&A activity, including China’s aggressive new programs aimed at bolstering its presence in the semiconductor industry.

It would be hard to characterize the huge wave of semiconductor mergers and acquisitions occurring in 2015 as anything but M&A mania, or even madness.  In just the first six months of 2015 alone, announced semiconductor acquisition agreements had a combined total value of $72.6 billion (Figure 1), which is nearly six times the annual average for M&A deals struck during the five previous years (2010-2014).

Figure 1

Figure 1

Three enormous acquisition agreements in 1H15 have already catapulted 2015 into the M&A record books.  First, NXP announced an agreement in March to buy Freescale for $11.8 billion in cash and stock.  In late May, Avago announced a deal to acquire Broadcom for about $37 billion in cash and stock, and then four days later (on June 1), Intel reported it had struck an agreement to buy Altera for $16.7 billion in cash.  Avago’s astonishing deal to buy Broadcom is by far the largest acquisition agreement ever reached in the IC industry.

In many ways, 2015 has become a perfect storm for acquisitions, mergers, and consolidation among major suppliers, which are seeing sales slow in their existing market segments and need to broaden their businesses to stay in favor with investors.  Rising costs of product development and advanced technologies are also driving the need to become bigger and grow sales at higher rates in the second half of this decade.  The emergence of the huge market potential for the Internet of Things (IoT) is causing major IC suppliers to reset their strategies and quickly fill in missing pieces in their product portfolios.  China’s ambitious goal to become self-sufficient in semiconductors and reduce imports of ICs from foreign suppliers has also launched a number of acquisitions by Chinese companies and investment groups.

IC Insights believes that the increasing number of mergers and acquisitions, leading to fewer major IC manufacturers and suppliers, is one of major changes in the supply base that illustrate the maturing of the industry.  In addition to the monstrous M&A wave currently taking place, trends such as the lack of any new entry points for startup IC manufacturers, the strong movement to the fab-lite business model, and the declining capex as a percent of sales ratio, all promise to dramatically reshape the semiconductor industry landscape over the next five years.

The Semiconductor Industry Association (SIA) today commended the launch of the Congressional Semiconductor Caucus. SIA recognized members of the caucus at a reception on Capitol Hill Tuesday evening and honored the caucus’s co-chairs, Sen. James Risch (R-Idaho), Sen. Angus King (I-Maine), Rep. Pete Sessions (R-Texas), and Rep. Zoe Lofgren (D-Calif.).

“Semiconductors form the foundation of America’s technological and economic strength, national security, and global competitiveness,” said John Neuffer, president and CEO, Semiconductor Industry Association. “The Congressional Semiconductor Caucus will provide a venue for Members of Congress and industry professionals to share ideas and work collaboratively to advance policies that preserve and strengthen the semiconductor industry and our country. We applaud Sen. Risch, Sen. King, Rep. Sessions, and Rep. Lofgren for leading the caucus and for their longstanding support of policies that promote growth and innovation.”

Semiconductors are the brains of modern electronics, making possible the myriad devices we use to work, communicate, travel, entertain, harness energy, treat illness, and make scientific discoveries. SIA is the voice of the U.S. semiconductor industry, uniting companies that account for 80 percent of America’s semiconductor production.

The semiconductor industry directly employs nearly a quarter of a million people in the U.S. and supports more than 1 million additional U.S. jobs. In 2014, sales from U.S. semiconductor companies accounted for more than half of the $336 billion in total global semiconductor sales. Semiconductors are America’s third-leading manufactured export, behind aircraft and automobiles. The industry is highly research-intensive, investing one-fifth of revenues in R&D annually – more than any other industry.

“In the semiconductor industry and across the tech sector, innovation is made possible through the hard work and ingenuity of the industry’s scientists and engineers and is aided by smart public policy from the federal government,” Neuffer said. “SIA looks forward to working with members of the Semiconductor Caucus to advance policies that facilitate free trade and open markets, modernize America’s tax system, strengthen America’s technology workforce, advance university research, and protect intellectual property, among other priorities.”

With screen sizes increasing, smartphones continue to lead total area demand in the cover glass market; however, as the markets for smartphones and tablets mature, cover glass industry revenue growth is declining from 39 percent year over year in 2013 to 11 percent in 2015. While the overall cover glass market growth is falling, increasing popularity of the Apple Watch is leading to growth in smart watch cover glass shipments, according to IHS Inc., a global source of critical information and insight.

“Although the average display size for tablets is increasing, simpler industrial design and weak device demand are causing average selling prices for cover glass to fall quickly,” according to Terry Yu, senior analyst for small and medium displays for IHS. “Cover glass makers are now pinning hopes on smart watches, as a way to shore up flagging revenue growth caused by the maturation of the smartphone and tablet segments.”

Smartphones are forecast to comprise more than half (55 percent) of all cover glass area demand in 2015, followed by tablet PCs. More complicated requirements for smartphone cover glass — including higher aluminosilicate glass penetration, more drilling holes and more ink layers — are causing average selling prices (ASPs) to rise faster than area demand; smartphone cover glass is therefore expected to make up 63 percent of revenues in 2015. By way of comparison, tablet cover glass is expected to reach 29 percent share of total area demand in 2015, but will only comprise 25 percent of all cover glass revenue, according to the most recent Touch Panel Cover Glass Report from IHS.

cover_glass_data

Due largely to consumer demand for the Apple Watch, overall smart watch cover glass area demand is forecast to increase by five-fold in 2015, reaching 33,000 square meters. That is still only a tenth of a percent of total cover glass area shipments, as cover glasses for wearable devices are much smaller than those used in smartphones and tablet PCs. The slightly curved design known as 2.5D, along with higher sapphire glass penetration, will keep ASPs significantly higher, which will help smart watch cover glass revenue share rise to 3 percent of the total market in 2015.

Higher costs for aluminosilicate glass and sapphire glass can significantly affect total cover glass costs. In fact sapphire glass material costs in smart watches can be up to 12 times higher than the cost of aluminosilicate glass.

“Sapphire glass used in wearable devices commands a premium price, so growth in that area would help shore up industry revenues,” Yu said. “In addition, sapphire glass is already used in the traditional watch industry, which makes it easier to adopt by smart watch cover glass manufacturers.”

Note that this market analysis from IHS covers only front cover glass, and does not include glass used in rear covers, such as the Gorilla glass used on the back of the Galaxy S6.