Why Your Smartphone Screen Will Be Made of ASF -Grown Sapphire

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2 Table of Contents Executive Summary The Future of Cover Glass isn t Glass Expanding Sapphire beyond Traditional Markets Sapphire Crystal Growth Furnaces Looking at Sapphire Growth through a Value Metric Sapphire Crystal Growth Value Metric KPIs Why Uniform Boule Geometry Matters Beyond the Boule Factors Impacting Cost of Ownership ASF - The Path to Low Cost Sapphire Production 1 P a g e

3 Executive Summary Consumers have long complained of scratched and broken screens on their smartphones. Yet, in spite of improvements in strengthened glass, the problem still persists, and consumers and brand owners are looking for a better solution. Sapphire crystal offers long-proven advantages in scratch-resistance and durability over reinforced glass, and smartphone and wearable brand owners are beginning to introduce products with sapphire cover screens. For sapphire to achieve a bigger share of the cover screen market, brand owners have to be reassured that the material will be available at high volumes and at the price points they need to drive broader adoption within their product lines and meet their bottom line needs as well. Getting there depends on two important factors creating a supply chain with an abundance of high quality bulk sapphire crystal and an optimized fabrication supply chain capable of turning that bulk crystal into high performing sapphire cover screens. Building a supply chain capable of producing sapphire crystal at the volumes needed to meet the demands of the cover screen market poses a different set of crystal growth challenges over traditional, lower volume markets such as LED and other industrial application segments. The cover screen market favors a growth method that can deliver the highest amount of yielded material from each boule. Bulk crystal growers are facing significant capital expenditures as they increase their capacity to meet the expected future volume of sapphire material for the cover screen market. It is critical that they make the right choice of crystal growth equipment to ensure they not only optimize their production capability, but also ensure the highest return on their investment. But which type of sapphire growth equipment is best optimized for the cover screen market? The authors look at the two most widely used growth methodologies Kyropoulos (Ky) and GT s ASF process based on the heat exchanger method (HEM) to understand which one is best optimized to meet the needs of the cover screen market. The authors present a Value Metric that compares the critical key performance indicators between ASF and KY furnaces. By looking at the most important bulk crystal growth factors, GT s ASF furnaces deliver more value to sapphire producers targeting the smartphone cover screen market. The ASF furnace not only produces more yielded material from each boule, but it requires fewer furnaces and operators than a KY plant of equivalent capacity. 2 P a g e

4 How often has this happened to you, or to someone you know? Too often many of us have experienced the feeling captured on the woman s face in this picture as our smartphone screen shatters from an accidental drop or gets scratched during everyday use. We try to prevent this from happening by spending up to $40 USD or more on a wide range of aftermarket products to protect our devices. Yet in spite of this, cover screens still crack and shatter. A PV Advisor poll conducted in July of 2013 of 1,500 UK adult iphone users with damaged devices revealed that their phones were damaged on average within10 weeks from the purchase date the most common issue being a broken screen. Advances in strengthened glass material have improved the performance of the screen, but the problem still persists, and it is a problem for both users and brand owners alike. The Future of Cover Glass Isn t Glass Why not eliminate the problem in the first place with a better cover screen material? A survey conducted by usell.com (via NBC News) in the fall of 2014 ahead of the Apple iphone 6 rollout asked over 1,000 US smartphone owners what current smartphone features they thought were the most important. Thirty seven percent of the people surveyed wanted longer battery life, and 19 percent wanted a larger screen. Topping the list of new features, at 45.5 percent, were people asking for sapphire cover screens. Though the iphone 6 did not launch with a sapphire screen, other device makers are not waiting to follow Apple s lead and are turning to full crystal sapphire cover screens to replace strengthened glass on their current or future products. Despite efforts to improve the screens on our smartphones they still scratch and break in everyday use causing a problem for users and brand owners alike. The use of solid crystal sapphire for luxury watches is well known. As figure 1 shows, a growing number of brand owners are turning to sapphire to sapphire as the cover screen material to protect not only smartphones, but also the fast-growing number of smartwatches entering the market. Much has been written about the properties of sapphire that make it a ideal material choice for products such as smartphones and wearable devices. It is an extremely durable material that resists cracking and scratching. There are only a few other materials that can actually scratch solid crystal sapphire making sapphire a superior material for products that undergo the kind of daily wear and tear our smartphones go through. A few smartphone manufacturers are marketing a poorer quality sapphire-like product using an amorphous coating, usually aluminum oxide, applied to glass. These screens offer little or no improvement over strengthened glass screens and come nowhere close to providing the scratch resistance of a full, solid sapphire crystal cover screen. So why is sapphire not more widely used in these products? The adoption of sapphire for these high volume devices depends on many factors. This paper focusses on the role that bulk crystal growth plays in making sapphire material more widely available and at price points that will drive its adoption into the consumer electronics market. Figure 1 A growing number of device makers are turning to sapphire as the material for their cover screens 3 P a g e

5 Expanding Sapphire beyond Traditional Markets The ability to deliver high quality sapphire material in volume and at the prices brand owners need begins with bulk crystal growth. There are a number of well-known crystal growth methodologies such as Kyropoulos (KY) and Heat Exchanger Method (HEM), to name two of the most widely used, that have been producing quality sapphire material for many decades. Until recently, the need for high volumes of large diameter sapphire material didn t exist since most of the material being produced was targeting lower volume niche applications with relatively high margins serving the optical, aerospace and other industrial markets. The historical best-known-methods for producing boules and fabricating sapphire parts were optimized around the material requirements driven by these respective applications. The introduction of LED lighting in the early 2000s created an inflection point in the growth of the global sapphire industry. Crystal growers and fabricators quickly increased capacity to meet the fast-growing demand for 2-inch sapphire epi-ready wafers. At the time, LED light bulbs were significantly more expensive than traditional incandescent light bulbs driven mostly by a supply chain that had been optimized around traditional, lower volume sapphire markets. Walk in today to your local home improvement store and see a wide range of LED light bulb choices at prices that have dropped significantly compared to 10 years ago. Technology improvements, along with supply chain optimization and an overcapacity of sapphire production contribute to these lower costs. Sapphire Crystal Growth Production Equipment The demand for small diameter, 2-inch LED material fueled the growth of the global sapphire industry and created opportunities for material producers to increase production to meet rising demand. This growth also created an opportunity for the development of a merchant sapphire equipment market where none existed before. This dynamic favored KY equipment over other crystal growth equipment such as HEM. Up until 2010, most of the global bulk sapphire crystal was produced using KY or modified KY crystal production furnaces. Much of this equipment was provided by a small number of Russian-based suppliers who provided the basic KY system, but offered little in the way of installation services and ongoing product service and support to the customer. That changed with GT Advanced Technologies acquired Crystal Systems in July of Sapphire (9) ranks second in hardness on the Mohs scale, a long accepted measurement of material hardness. Created in 1812 by the German geologist and mineralogist Friedrich Mohs, the scale rank orders from hardest (diamond) to softest (talc) materials in terms of their resistance to scratching by a harder material. Scratch resistance is only one measure of a material s suitability for use as a cover screen. Other factors that impact performance are the material s dielectric constant, flexure strength and optical clarity. In addition to these mechanical properties, the cost of producing sapphire is another important driver for sapphire cover screen adoption. Crystal growth and fabrication techniques can greatly impact the overall cost of sapphire. GT has extensive experience in sapphire crystal growth and the fabrication of sapphire for use as cover screen material. GT, in partnership a leading sapphire fabricator, will be publishing a series of white papers in the coming months that will examine the metrics that matter most in bulk crystal growth and sapphire fabrication optimization that deliver optimal performance of sapphire cover screen material. At the time of the acquisition of Crystal Systems, the HEM growth process, developed by Fred Schmid and Dennis Viechnicki in 1967, was a captive crystal growth process being used at Crystal Systems where Fred was the CEO. Unlike KY equipment, HEM production equipment was not commercially available to other crystal growers. As a result, more of the LED sapphire material was being produced on KY systems than other growth methods. However, as the industry demand for higher volumes of 2-inch cores grew, Crystal Systems was already delivering LED-grade sapphire material to 4 P a g e

6 some of the most demanding customers in the industry. In fact, by the time GT Advanced Technologies acquired Crystal Systems in July of 2010, they were providing large diameter 4-inch and 6-inch cores and receiving excellent quality reports from its customers. The reason more LED material is based on KY material has more to do with the fact that most of the LED epi-ready wafer suppliers had already standardized their MOCVD processes around 2- inch KY material. There was little incentive for a wafer provider to disrupt their qualified epitaxy process by introducing a new material into the mix. The strategic driver for GT s acquisition of Crystal Systems was to commercialize a highly scalable and easy-to-operate sapphire growth system based on the HEM process to meet the growing demand for more bulk sapphire crystal. GT had already demonstrated success in developing market-leading technology, implementing service and support resources and developing a robust, scalable Asia-based global supply chain in the solar industry with its DSS multicrystalline ingot furnaces. GT successfully leveraged this experience by installing over 300 ASF furnaces within the first two years of the Crystal Systems acquisition. The dimensional requirements of 2-inch LED wafers does not necessarily favor one growth method over another since each of the most widely used methods can deliver high quality 2-inch diameter cores at reasonable cost. But this changes as material diameter increases. Now, the scalability of the growth process and its ability to produce more uniform and larger boules becomes more critical in the equipment purchase decision. Yielded material per production run, becomes more important as the application drives the need for large area products. For the LED industry this means material cost goals will favor a highly scalable process such as HEM to deliver material as the industry transitions from 2-inch wafers to 4-inch and 6-inch wafers in the coming years. For mobile devices where volume requirements are extremely high and costs are low, delivering the highest amount of useable material per boule is not an option, it is a requirement. These application requirements will favor the HEM process over existing growth processes because of its ability to scale to much larger boule sizes that deliver high yields. GT s ASF sapphire furnaces are installed at customer sites throughout Asia producing high quality material for a range of applications including LED, optical, watch crystals, smartphones and other consumer products. The ASF furnace produces large boules with uniform geometry that are optimized for delivering the highest amount of yielded material at high volumes for consumer electronic applications. Looking at Sapphire Growth through a Value Metric One of the arguments often heard from the suppliers of strengthened glass is that sapphire will never be cost competitive with glass cover screens because of the high cost of manufacturing. Delivering low-cost sapphire material begins with boule growth. Understanding the relationship between cost and crystal growth and the differences between the various growth methods can be expressed in the concept of a Value Metric. A Value Metric is a way to quantify a certain value derived from a set of key performance indicators (KPIs) that are the most important criteria affecting the data you are trying to measure in terms of comparative value. For the purposes of this paper, we will use a Value Metric to demonstrate which sapphire growth method, KY or GT s ASF process is best optimized for producing large area cover screen material for high volume production environments. 5 P a g e

7 A Value Metric based on the key performance indicators (KPIs) that impact sapphire growth and the resulting yielded material will help to reveal the answer. To determine the answer to our question we have constructed the following Value Metric (see figure 2). ASF 165 Kg Boule KY 85 Kg Boule KY 30 Kg Boule Our scenario begins with a phone call from a customer that wants to place an order for 10 million sapphire cover glass screens per year. To deliver this quantity of material you will need to increase your current KY production capacity with additional sapphire growth furnaces. Your choices are either standardizing your production around KY furnaces or GT s ASF furnaces. As a crystal grower, you have experience with the KY growth method, but are concerned that small boule sizes these furnaces produce will require a significant number of new furnaces to meet the targeted production volume. You have some general information about ASF furnaces and the HEM process from your conversations with people in your engineering and operations teams, and from your industry peers. What you have been told is that KY furnaces are much less expensive than ASF furnaces, but ASF furnaces typically produce a larger boule than a KY furnace. To help you make this business-critical decision you develop a Value Metric based on the most important crystal growth KPIs. For our comparison in this scenario the KPIs include the following: Sapphire Crystal Growth Value Metric KPIs Charge size the size of the boule each furnace is capable of producing on a repeatable basis at volume production measured in kilograms. Cycle time the amount of time it takes to produce a boule. Number of boules produced in a year for our value metric formula we will use 350 days divided by the cycle time. Yielded cover screens per boule this is a critical number as it measures the amount of good material that can be fabricated into cover screens that each boule is capable of producing. Yielded cover screens per furnace per year this will reveal how many cover screens each furnace is capable of producing on an annual basis by multiplying the number of boules it produces by the number of yielded cover screens per boule. Number of furnaces needed to meet customer delivery by simply dividing the number of screens that need to be delivered by the number of yielded screens for each furnace you can calculate the number of furnaces that will need to be purchased to satisfy the customer order. Number of operators needed to run factory this is important as it impacts personnel costs and overall plant operations. Annual screen production (millions) Charge size (kg) Cycle time (days) Boules per year Screens/boule 2,364* 1,050* 420* Screens/furnace 35,974 21,618 12,250 /year Boule run yield 90% 60% 80% Adj. screens/ 32,377 12,971 9,800 Furnace/year Total furnaces ,020 Furnaces per operator Operators per hour shift Total Operators (3 shifts / week) Figure 2: *estimated output after production optimization (result will vary based on customer-specific processes and requirements) 6 P a g e

8 Figure 2 compares three sapphire crystal growth scenarios based on the KPIs we have developed for our Value Metric comparison. The chart compares a standard 165 kilogram production boule produced in a GT ASF furnace and two standard production boules, one 85 kilograms and one 30 kilograms, produced in KY furnaces. There are several important points one can see when comparing the data between the three growth scenarios. The most obvious is the number of furnaces you would have to purchase (309 ASF furnaces vs 771 or 1,020 KY furnaces) to meet the annual production goal of 10 million cover screens. Secondly, and even more significant, is the operating cost difference between running a factory with 309 furnaces vs a factory with 771 or 1,020. Operating a factory with 309 ASF furnaces will be significantly easier and less costly on many levels than operating a factory with times more KY furnaces lower utilities, building infrastructure and consumables to name a few. Additionally, the value metric chart shows it would take about five to six times more highly skilled operators to run the KY factories compared to the ASF factory. Clearly, the value metric comparison demonstrates the advantages of ASF over KY in this scenario, but why? What is it about the ASF equipment and growth process that so clearly demonstrates better value to the crystal grower? The answer is uniform boule geometry and higher yielded material from each boule. Figure 3 A typical cover screen brick harvest pattern from a 165 kg boule produced in an ASF furnace. The uniformity of the boule optimizes the amount of yielded material which lowers the cost of manufacturing. Why Uniform Boule Geometry Matters The path to delivering good crystal at high volumes and at the lowest cost for cover screen applications requires a growth methodology that can scale to produce large diameter boules. Of the current growth methods, GT s ASF HEM-based architecture, is best positioned to deliver the most uniform, large-diameter boule geometry compared with other growth methods. As our Value Metric chart shows, GT s ASF sapphire growth method delivers the highest amount of yielded material per boule or furnace. This is particularly important if the material will be used as cover screens for smartphones. In the case of high volume markets such as cover screens, lowering the cost of manufacturing is the most important factor that contributes to a company s bottom line since margins on these products are much lower than traditional industrial sapphire markets. To meet these price points the growth equipment must be able to produce high yielding, high quality material at the lowest cost. Based on our extensive research and experience, we believe that the ASF architecture provides the best overall Value Metric compared with other methods to meet the needs of this fast-growing market. Figure 3 shows a 60mm x 125mm brick harvest pattern from a large diameter ASF boule. The uniform geometry of the boule produces the greatest number of rectangular-shaped bricks as shown in the diagram. Figure 4 The lack of uniformity of a KY boule limits the amount of material that can be harvested for large area material such as bricks for cover screen applications. Bubbles running vertically through the center of the boule may also limit the amount of material that can be harvested for bricks. Figure 4 shows an 85kilogram KY boule brick harvest pattern. The difference in the amount of yielded material that can be achieved between ASF and KY becomes obvious when we look at a similar brick harvest pattern from a typical KY boule. Because of the irregular shape of the boule there is less material available for an optimized brick harvest, which leaves higher amounts of scrap material and 7 P a g e

9 complicates downstream cutting of bricks making it difficult to standardize uniform length bricks. Another contributing factor, other than the shape of the boule, is the quality of harvestable material. One of the inherent challenges with the KY growth process is producing a boule with minimal bubbles. Thermal patterns in the KY material during melt and crystal growth typically concentrate bubbles towards the center of the boule in a vertical pattern from top to bottom. Unlike LED material, which is harvested in the C-plane axis across the width of the boule, cover screen material is harvested in the A- plane axis or the vertical orientation of the boule. A brick harvested from the center of KY boule would more than likely have bubbles present throughout the entire length of the brick rendering it useless for cover screen material. The bricking pattern would have to exclude this material, which would significantly reduce the amount of yielded material from the KY boule. There is an obvious economic advantage in producing a larger boule and equipment providers of all types are developing product roadmaps that indicate they will deliver larger boules in the coming years. The challenge today for companies that are fabricating finished products such as cover screens for mobile devices and want to establish their market leadership now is how long will they have to wait? With ASF, the answer is you don't. Large diameter ASF boule production is available today. You don t have to wait for the promise of a bigger boule announced in the headline of a press release to become a product that can actually be delivered at volume with a production-ready, repeatable process. ASF is already providing this today. And for companies that want to establish a competitive advantage now and build a high volume sapphire production operations the ASF platform is the obvious choice. GT s ASF crystal growth process is known for its ability to produce large diameter boules of uniform geometry a significant factor in lowering the cost of sapphire material for high volume applications such as cover screens. The uniform shape of the boule delivers higher yields of large diameter material when compared with KY boules. This benefits crystal producers by lowering the cost of manufacturing, a critical factor in delivering low cost material for high volume markets. Beyond the Boule Factors Impacting Cost of Ownership The ASF furnace and HEM crystal growth process has proven to be highly scalable in producing ever larger boules. In 2010, when GT acquired Crystal Systems, the standard production ASF boule was 85 kilograms. Today, in just a little over four years, the standard production boule size has grown from 85 kilograms to 165 kilograms. GT s ASF product roadmap will continue along this path delivering boules well over 200 kilograms in the next few years. This is good news for customers who want to invest today with current technology and then take advantage of the scalability of the ASF platform to upgrade their operations as new technology becomes available in subsequent generations. As important as the size of the boule is to running a profitable sapphire production business, there are other factors beyond the size of the boule that manufacturers need to consider. There are also some significant differences in how KY and ASF furnaces operate that will impact the overall throughput and productivity of your manufacturing operations. While these differences don t impact material yield or material quality, they greatly affect productivity, throughput and overall cost of ownership. Here are several of the most important: 8 P a g e

10 Seeding The seeding process of a KY furnace is notoriously difficult often requiring a trained technician to spend up to as many as eight hours to set the seed properly. By comparison, seeding an ASF furnace is greatly simplified and takes a less skilled technician only minutes to set the seed. Automated Growth Process The KY growth process is a highly manual operation requiring more highly trained operators per furnace to manage a high volume production facility. The ASF furnace, on the other hand, is a highly automated growth process. This greatly simplifies manufacturing operations and saves significant amounts of overhead since it takes many fewer operators to run a high volume ASF production facility than a KY facility. Power Consumption The ASF furnaces consumes 50% less power than a KY furnace saving the operator a significant amount of money in energy usage on an annual basis. Hot Zones The ASF furnace uses an inexpensive graphite hot zone that that can last up to five years in production. KY furnaces use refractory or metal hot zones made from expensive molybdenum or tungsten which have to be swapped out with a new hot zone after only three or four runs. This adds unnecessary costs to consumable expenses. Crucibles One of the advantages often touted by KY equipment providers is that the cost of a crucible for a KY furnace is much less than those used in ASF furnaces. The main reason for this is that the tungsten crucible can be used over multiple runs and thus the cost can be amortized across the number of runs whereas the crucible in an ASF furnace can be used only one time. GT has made significant advances in closing the crucible cost gap between ASF and KY crucibles in the past two years by leveraging the cost-down supply chain optimization with crucible suppliers who were part of the Mesa, AZ project. One example of this is the recovery costs achieved by recycling the Molybdenum crucible material back to the crucible manufacturers. This cost-down advantage also extends to the cost of melt stock where again, optimization with melt stock suppliers has resulted in cost-savings for this important material. Scaling up a high volume ASF sapphire production plant entails far less risk and significantly lower operating costs than a similarly-sized KY plant. The ASF plant will require many fewer furnaces, fewer personnel to operate the plant which saving on building costs, utilities and facility costs, lower capital expense and lower personnel costs. GT s ASF furnace produces large diameter boules that are optimized for the production of sapphire cover screens. The ASF produces 165 kilogram boules with uniform geometry that yield more material when compared to KY furnaces for high volume applications that require large diameter finished material. ASF The Path to Low Cost Sapphire Production The use of sapphire material for smartphones and wearables is growing. The material offers superior durability and scratch-resistance over the strengthened glass cover screens found on most devices today. Early adopter market leaders, such as Huawei, have already introduced brand extension products that use this remarkable material as the cover screen on their Ascend P7 phone. Other phone makers are following their lead. Demand for large area sapphire material continues to grow. Sapphire producers investing today in new greenfield production facilities or adding capacity to their existing factories are looking to gain early mover market advantage in this fastgrowing segment. To take advantage of this opportunity, they must choose a sapphire 9 P a g e

11 equipment supplier with a proven and scalable production furnace, and a process capable of delivering the volume of large area material at the price points needed to meet the product delivery demands of the brand owners and run a profitable manufacturing operation. GT s ASF sapphire furnaces offer customers a path forward in delivering high volume material at costs that will allow them to successfully compete in the market place. GT s ASF sapphire furnace has proven to be a highly scalable architecture that can consistently deliver large diameter boules with the best uniform boule geometry of competing sapphire growth methodologies. Standardizing sapphire manufacturing operations on the ASF platform will allow companies the ability to utilize GT s current volume production 165 kilogram technology today knowing their investment is protected as GT introduces subsequent generations of future ASF furnaces with the capability to produce even larger boules. For bulk crystal growers looking to establish leadership in one of the fastest growing markets the choice is clear. That s why we say your next smartphone will have a cover screen made with ASF-grown sapphire. About the Authors Jeff Nestel-Patt is Senior Director of Marketing at GT Advanced Technologies where he leads the company s branding and external communications programs in support of GT s strategic business initiatives. Henry Chou is Director of ASF Product Marketing responsible for the company s ASF sapphire furnace product roadmap and product marketing initiatives. Scott Kroeger is Vice President, Business Development for GT s Advanced Crystal Systems and is responsible for corporate product and strategic development initiatives related to crystal growth and supporting downstream manufacturing process technologies. 10 P a g e

12 GT Advanced Technologies 243 Daniel Webster Highway Merrimack, NH GTAT Corporation. All rights reserved. ASF is a registered trademark of GTAT Corporation. Subject to change without notice. ASFCS042015