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Jacky Yuan

Jacky Yuan
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  • GT Advanced Technologies Sapphire Materials Business Goes Far Beyond Apple [View article]
    Hi Casual Analyst

    I don't work for this industry, so I am an outsider as well.

    A disclaimer I need to made is that, some of the information blow are obtained from some public internet BBS in China on crystal growth, I have looked most of the discussion threads about Sapphire growth from 2011-2014, i think most of the people participating this discussions come from this industry like LED/Sapphire growth companies, researchers, etc . This information is questionable or not accurate, which I also agree, but I do believe there's no reason for them to give false information.

    You have raised lots of questions, I'll probably not be able to response one by one, but I will give my take as follow

    1. Neither Ky nor HEM are new technology, they all have been invented for more than 80 years. Crystal System had been developing HEM methods for 40 years, in terms of HEM, I think GTAT has the state of art technology. But yet up to today, Ky is still the main stream method for growing LED wafer, Crystal System had never made itself to be the top 10 Sapphire supplier as I can see. GT acquired CS for only less than 30M, as well GTAT itself had never grow any Sapphire either, there're customers from Taiwan, China, Korean who had purchased GT's furnace since 2011, but I don't hear a lot from them today, they seems all failed to be a noticeable Sapphire supplier, I far as I can say. And if HEM is so good, then why GTAT acquired TT for its Ky growth technology, I don't know whether had discontinued Ky furnace, but I think it's still listed in GTAT's website. So I do believe HEM hold some disadvantages against Ky at least.

    2. There're many ways to determine the Sapphire quality. Purity, Etch pit density(EPG), Single crystal property (The more single crystal yielded, the better, cauz only single crystal offers the best physical and optical property). As well as yield, usually the central part of the Sapphire is better than the edge, as edge is often polluted by the chamber, so there's a yield rate as how many percentage of Sapphire from one result, can be used for LED, how many can be used for others. Sapphire growth is a complicated process, and a well developed industry, there're lots of different factors, so not all Sapphire are the same.

    3. I at least see three people saying the Sapphire produced by GT's furnace is not good enough to be used on LED, either they have tested it, but it failed to create enough luminance, or the purity is not enough, as the HEM process generate more C pollution. Again, I have not contacted any people working for the LED companies in person, and this is all read from Internet BBS, but I don't think this is completely untrue. Considering the LED market still dominated by Sapphire grown by Ky methods.

    4. With all the above, at least I can say, HEM is not good enough to be used to produce LED, as 1) it has never been widely adopted compared to Ky for so many years, 2) Neither CS nor GT had ever become a major Sapphire supplier, nor I see any companies that purchased GT's furnace has become a major supplier. 3) There're some source saying Sapphire grown by GTAT's furnace cannot be used for LED.

    5. So at least I can say GTAT is not going to benefit any from the booming LED industry. GTAT don't have any advantage over other Sapphire companies in terms of producing LED Sapphire Wafers .

    5. And I am not ruling out GTAT's HEM completely, it may suit the window usage or smart phone screen, who knows. But saying the booming LED usage will help GTAT seems wrong.

    6. I really don't know which is more cost efficient, Ky or HEM. HEM seems use more electric but requires less skilled workers. So I think the cost would probably the same for both methods.

    7. Rubicon may be having a hard time. It may went bankrupt in 1 or 2 years, no doubt about that. But that doesn't make GTAT a better player here. And I do think Rubicon have better technology, as they have been growing Sapphire for 10 years, it supplies 20% of the world Sapphire market. Neither GT nor CS, had ever done that.

    8. Apple's deal is a big deal for GTAT. And somehow, you got to admire the management team of GTAT, they realized the solar industry is going to an end years ago, so they managed to get into the Sapphire industry, even though they failed to attract enough customers from the LED sector, they somehow been pushing the smart phone screen adoption, and they managed to signed the deal with Apple. If everything works out, GTAT do have a very good future. But beyond Apple's deal, I see lots of risks.

    9. I am not particularly responding to your article. I have been long GTAT for a long time, only until recently I lost all my profit from the tank after iPhone 6 announcement. So I spend a lot of time digging more on this business, and just want to share with the people interested in the company.

    10. Somehow, things to keep an eye on:
    1) Whether GTAT can get more Sapphire furnace orders?
    2) How the Apple deal work out. Whether Apple can really apply Sapphire on iPhone? Somehow, if it failed to do that, or Apple decide to dump GTAT, and team up with another partner, which is not completely impossible, then, that's the end for GTAT, not saying GTAT will went bankrupt, but the stock price will certainly drop below 5 dollars.
    Sep 19, 2014. 03:16 PM | 3 Likes Like |Link to Comment
  • GT Advanced Technologies Sapphire Materials Business Goes Far Beyond Apple [View article]
    I got most of research/survey/inform... from Chinese sources. I have really tried hard to dig the same info in English resource, and I wish I could share it, but disappointingly I really didn't find too much besides research reports with a big price tag.

    Here're some research I have found so far,
    In Mandarin,
    http://bit.ly/XP4Lzm, A Chinese research survey of the Sapphire Industry

    http://bit.ly/XP4Lzo, News of GTAT lose law suit against ACTC Taiwan, because of low yield issue

    http://bit.ly/XP4Lzp, A Chinese blog discussing about Sapphire growth Technology

    In English
    http://bit.ly/XP4Lzv, A Chapter discussing about various Sapphire growth methods

    Something I am quite sure about is
    1. 70% of the world Sapphire supply currently are produced by Ky growth method, which is used by Rubicon and Monocrystal.
    2. China has been insanely ramp up Sapphire production in recent years, and as a result of that, the price for 2' Sapphire wafer has dropped from $30 to $7, significantly in the recent 4 years, and this is exactly why Rubicon has experiencing a really hard time. As that I don't really expect more demand from LED sector, as it's already over supplied.
    3. Crystal System had never been the top 10 Sapphire supplier in the last 10 years.
    4. The advantage of HEM method is that it's the best automated growth process, with which you can ramp up production very quickly, with less skilled workers, this is probably the reason why Apple choose GTAT. While on the other hand, Ky required highly experienced workers to achieve the best performance, however, it does generate better and cheaper Sapphire, with high yield.

    Some UN-confirmed info:
    1. GTAT is currently involved in law suit with some of its China customers, because its furnace cannot provide enough yield.
    2. Apple had talked with Rubicon and Monocrystal, but failed to reach a reasonable price, before they choose GTAT.
    Sep 18, 2014. 09:19 PM | 8 Likes Like |Link to Comment
  • GT Advanced Technologies Sapphire Materials Business Goes Far Beyond Apple [View article]
    GTAT doesn't have the best Sapphire growth technology. The best Sapphire growth technology is possessed by companies like Monocrystal, Rubicon, STC, they all develop furnace by themselves, and they never sell their furnace to other companies.

    The HEM method GTAT used to growth Sapphire generally produce less quality Sapphire compared to methods like Ky, CZ, most of the output will not be good enough to be used for LED, as well not the best Sapphire to be used for smart phone screen. However, it do have benefits like it's more automated procedure, which can ramp up large scale production very quickly.

    Someone want to jump on to the GTAT boat, should dig a little more of this industry. I won't really consider GTAT has any advantage over the other Sapphire companies, except it signed the Apple deal.
    Sep 18, 2014. 04:44 PM | 3 Likes Like |Link to Comment
  • Facebook And Twitter Diverge On A Valuation And Operational Basis [View article]
    Twitter's Q1 revenue is 250M, while stock-based compensation is 126M, that's almost half of their revenue, which is a lot. Their projected 2014 revenue is around 1200M, and expected stock compensation is around 600M.

    Anyone have any comments on this? Does all this went to their employee's pockets, or any other usage? This seems crazy, if this company keeps operating like this, how could they ever to make any profit?
    May 2, 2014. 02:25 AM | 1 Like Like |Link to Comment
  • Chinese E-Commerce Giant Alibaba And Its Smaller Brother JD.com File For U.S. IPOs [View article]
    One thing is wrong, Tencent is no way be an e-commence company, it's a social network company like FB, and most of it's revenue come from gaming. Tencent has been trying to enter the e-commence market, and so far hasn't been successful, if not a totally failure,
    Mar 22, 2014. 12:22 PM | Likes Like |Link to Comment
  • 8 Questions Each Cimatron Holder Shall Ask [View article]
    You don't have to be a 3D printing machine manufacture, in order to beinifit from this revolution. IMO, 3D printing software are more profitable than 3D printing machine manufacturing. CIMT has made it clear that they'll introduce 3D printing software in mid 2014.

    Besides all the above, CIMT is still a cheap stock with 20 P/E, while the other CAD stock like autodesk have 50 P/E.
    Mar 10, 2014. 05:55 PM | 1 Like Like |Link to Comment
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