Tom Guitterez – November 7, 2012 while discussing the fabrication costs related to sapphire cover screens:
And finally, several new technologies are being brought to market that will further drive cost reductions and optimizations. One such example is Meyer Burger’s recently introduced bricking wire saw, which is expected to make the harvesting of bricks from a sapphire boule economically feasible and significantly less expensive than the current rotary blade saw processes in use. Through our partnership, we’re also aware of several other fabrication technology improvement and second-generation techniques currently in development that could have a very significant impact on the cost of producing sapphire screens.
So why is this important? December 19, 2013, Meyer Burger announced they had received a $80m Diamond Wire Saw and Consumable order from a new customer, delivery of wire saws would begin in January and and be completed by mid-year 2014. Meyer Burgers has a an existing partnership with GTAT.
Meyer Burger Technology Ltd (SIX Swiss Exchange: MBTN) announced today that it has successfully concluded an important strategic contract with a new customer. The contract includes delivery of high precision industrial slicing systems for about CHF 40 million. Meyer Burger signed an additional framework contract for diamond wire material from Group Member Diamond Materials Technology that has a potential value of about CHF 30 million in consumables during fiscal year 2014 (consumables to be called on an order-to-order basis). Both, the systems (equipment) and the consumables (diamond wire) are being used for cutting and slicing applications in specialised non-PV technologies.
Delivery of the system solutions is scheduled to begin in January 2014 and will be completed by the end of the first half of the year. The scheduled single-orders and corresponding deliveries from the framework agreement (diamond wire consumables) cover the entire fiscal year 2014.
TG ‘s comments on November 7, 2012 also referenced a fabrication technology improvements underway, that would have a significant impact on the costs of cover screens by lowering them even further.
Through our partnership, we’re also aware of several other fabrication technology improvement and second-generation techniques currently in development that could have a very significant impact on the cost of producing sapphire screens.
As it turns, out Meyer Burger was showcasing their new DW 288 Sapphire Wafering system at the 2013 CIOE (China International Optoelectric Expo) in August of 2013, less than a year after TG’s commentary at the Q3 2012 conference call.
The Obscure Takeaway:
GT management knew the sapphire cover deal was coming as far back as 2012 and already had their eye on existing partnerships to further reduce the cost of sapphire screens. They knew Meyer Burger, a key partner related to sapphire screen fabrication, was not going to deliver their new product until the the middle or late 2013. The $80m order Meyer Burger received for non PV was significant in size and the timing of delivery lines up nicely with the Mesa 2014 ramp up. It might be worth keeping an eye on Meyers Burger’s Q1 results because it may shed some light on the timing diamond wire saw deliveries to Mesa. If the majority of these diamond wire saws were delivered in Q1, is it possible, that GTAT and Apple could be prepping for a summer release of the iPhone 6.
It’s amazing what you can learn by looking at the past and then realizing where you are in the present and where you will be in the future.
My review of the past indicates that we have not arrived at the future. The present is a lot grander than anyone can understand today.
In the future we will learn what we missed from the past. We will learn that clues from the past were absolutely a sign of things to come.
~The Obscure Analyst 2/28/14