Japan Display Inc (JDI) Display Yield Issues have nothing to do with Sapphire Cover Screens

Posted: April 7, 2014 by mattmargolis24 in Apple Investor Information, GTAT Investor Information, Mesa Sapphire Plant
Tags: , , , , , , , , , , ,

by Matt Margolis

I pride myself in my research and attempting to sift through the noise, the rumors and stuff that just doesn’t make any sense.  Reuters published a story nearly a work ago titled: New iPhone 6 screens to enter production as early as May, citing supply chain sources for their information.  Furthermore the report clearly indicates this production is related to display panel screens and has nothing to do with sapphire cover screens for the upcoming iPhone 6 launch. Below are some of the key points made from the Reuters story:

Apple Inc suppliers will begin mass producing displays as early as May for the next iPhone, expected to be launched this autumn, with a 4.7-inch screen likely to be produced first while a 5.5-inch version could be delayed, supply chain sources said.

Both iPhone 6 screens are expected to use in-cell touch panel technology – built into the screen and allowing for thinner construction than with standard touch panel films – that was introduced with the iPhone 5, the sources said.

But due to difficulties with in-cell production technology for the larger 5.5-inch size, one of the sources said, a decision was made to begin mass production with the 4.7-inch version alone.

Production of 5.5-inch screens is expected to start several months later, with the possibility of a shift to a film sensor instead of in-cell technology for that size, the source said.

Japan Display will be the first supplier to start production, at its flagship plant at Mobara, east of Tokyo, as early as May, the sources said. The others are due to begin output around June.

Below is an image of the front of an iPhone 5 that breaks down the different layers including a Display Panel, Touch Panel and lastly the cover screen.  Reuters is claiming the iPhone 6 display panels will be made by Japan Display Inc, Sharp Corp and South Korea’s LG Display Co Ltd.  According to International Business Times, the 4.7″ and 5.5″ iPhone 6 models are expected to use in-cell touch panel technology, which is built into the screen to allow for thinner construction versus standard touch panel films.  GT Advanced Technologies is on target to deliver sapphire cover screens for both the 4.7″ and 5.5″ models replacing Corning’s Gorilla Glass, which has covered the iPhone since it first came off the assembly line in 2007.

Screenshot - 4_6_2014 , 9_56_55 PM

Most of Today’s Media Coverage Doesn’t Pass the Sniff Test

For clarity, none of the points above provided by Reuters have anything to do with sapphire cover screens but everything to do with display panels.  This leads me into the latest rumor that just doesn’t make any sense.  The latest iPhone 6 sapphire rumor claims that sapphire will not be in the iPhone 6  for either the 4.7″ or 5.5″ models.   The rumor seems focused on the same JDI yield issue I detailed out above from Reuters as well as chattering among the supply chain.  The JDI display yield issues are related to the iPhone 6 integrated touch/display panel and have nothing to do with sapphire cover screens.

So where does the media confusion begin?  Well, as you can see from the Reuters summary they were discussing touch panel screen delays.  If we follow the bouncing the ball and look at an article Business Insider, you will notice that the author talks about the delays in the production of the 5.5″ phone but only refers to the delay as screens.  Ut oh? Screens, does that mean sapphire cover screens or touch panel screens?  This is how rumors start and confusions sets but I’m here to set the record straight.  Below is some of the wording from Business Insider’s coverage of the Reuters breaking report on touch panel screen delays:

Apple is also exploring a 5.5-inch iPhone, says Reuters, but it’s having trouble making those screens. As a result, Apple has reportedly delayed production of the 5.5-inch screen. We’re not sure what this means for the release time line of the 5.5-inch iPhone.

Another media post that was made baseless claims was a report from Gforgames, who cited low yield and the high cost of a sapphire screen would cause the price of the iPhone to skyrocket.  Some wording from Gforgames is below:

The problem is not necessarily due to low yield (which still is a problem, at least until Apple’s Arizona plant will be fully operational), but mainly because fitting a sapphire screen on the next iPhone would make its price skyrocket.

Putting the Rumors, the Noise and the Stuff that just doesn’t make any sense to bed

I’ve been very due diligent over the past few years researching sapphire screens, the cost and who might be the first to put them on their device by the millions., etc.  I posted an article a few days ago titled: GTAT’s Sapphire Screens: Unscratchable, Unbreakable and coming Soon!  In this article, I provided excellent media coverage of the Mobile World Congress including an interview with GT’s COO Jeff Squiller.  My article covers a Digitaltrends article from 2013 written by Jeff Van Camp.  GT’s Dan Squiller provided cost estimates as of February 2013  for cover screens  (see quote below) and they certainly would not cause the iPhone price to skyrocket like Gforgames is reporting.

“Based on the conversations we’ve had with OEMS [Original Equipment Manufacturers], they’re willing to pay up to $15 or $20 for a better screen,” explained Squiller. “This will be $10 to $15 more expensive than Gorilla Glass. I think that [Gorilla Glass] display – that display that you just ruined – I think that was about $5 or $6 and we’re going to be at about $15 or so.”

Apple’s continuous sapphire growth patent coupled with Apple’s heat exchangers in sapphire processing patent are game changing inventions.  The inventions should lead to improved yield, 24/7 growth, sapphire yield and easier processing due to less cuts to name a few.  The biggest advantage to the continuous sapphire growth invention will be the elimination of unloading the completed sapphire boule, prepping and adding the raw materials and restarting the furnace.  If you are picturing a pit crew at a NASCAR race waiting to ready the ASF equipment for the next boule run then you are greatly mistaken.  The current process takes time and needs to be done right over and over again.  Additionally, I recently learned that Apple has been hiring Sapphire experts left and right over the last few years, which likely explains why Apple has been granted an array of sapphire patents over the last 6 months, including the two above.

If you are still having doubts on whether or not GT can make sapphire screens for the iPhone 6,  then you need to head over to my Secret Design of the Mesa Matrix article,  for my most detailed overview of Apple’s sapphire plant operations located in Mesa, AZ.  This article is my most informative one yet related to the Mesa sapphire operations and contains everything I have decided to share with you so far related to the Mesa facility operations.

If you are interesting in following my tweets, asking me a question or just want to give feedback or say hello you can follow me @sapphirecover24 on Twitter.

 

Full Disclosure: I am long GTAT and have no plans to buy or sell any holdings over the next 72 hours

Advertisements
Comments
  1. VivianRoberson says:

    Thanks Matt. I have learned a lot reading your posts and really appreciate the hard work that goes into each article.

    Like

    • millsy says:

      I still think that aapl might only put the saphirre covers on the bigger 5.5 inch phone and not the smaller 4.7 iphones. I also think the bigger iphones will come with upgrades that will pressure the consumer to upgrade and pay more for the bigger better phone. In the U.S. and Asia it seems that the mantra bigger is better is the truth when it comes to smart phones. I think sapphire will also be used on the new iwatch, both camera lenses on the new iphones and just the finger scanner on the smaller iphone. This is just a guess but aapl already did this last time when they came out with 2 phones. The lowered price phone was junk and i feel it was done intentionally so most people would buy the more expesive phone because it was more bang for your buck. I truelly hope saphirre covers the entire front of both phones since i am a shareholder but i think it will not happen. It still will not change my bullish outlook on gtat. Saphirre will be the “NORM” before we know it. Thanks matt.

      Like

      • I still think phones (both), iPod, iPad and iWatch are in play. Ramp up will determine how many come in 2014 with sapphire but I will not fall off my chair if everything is covered with sapphire.

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s