Earlier this week, Apple announced its plans to open a new facility with GT Advanced to help manufacture sapphire. Apple, of course, currently uses sapphire for the camera lens on the iPhone and on the Touch ID sensor because the material is incredibly durable and scratch-resistant.
Apple's agreement with GT Advanced, however, suggests that it has much bigger plans for sapphire than its current product lineup would otherwise suggest.
During a Monday earnings call, GT revealed a few bits of data that suggest it is rejiggering its entire business model around sapphire production. As Cantor Fitzgerald analyst Brian White noted today, GT's sapphire business accounted for 11 percent of its year-to-date sales - about $28.9 million in revenue. But, in forecasting 2014 revenue, the company said it expects to make $600 million to $800 million, with 80 percent of those sales attributable to its sapphire business.
Let's take a closer look at those numbers.
GT's sapphire business brought in US$28.9 million in revenue in 2013. Looking ahead to 2014, GT Advanced notes that its sapphire business will bring in anywhere from $480 million to $640 million.
That's an absolutely monumental increase in sapphire production and begs the question as to just what Apple plans to do with all that sapphire.
Not to get too swept away by the rumor winds a'blowin, but some folks have suggested Apple may feature sapphire more prominently on the iPhone 6, perhaps using it for the full display. This of course would certainly reduce the incidence of cracked and broken screens. At the same time, sapphire is more expensive and heavier than glass so there is a trade-off.
As a final point, it's worth pointing out this blurb from GT Advanced's press release:
GT has accelerated the development of its next-generation, large-capacity ASF furnaces to deliver low-cost, high-volume manufacturing of sapphire material. These R&D efforts will support its non-LED initiative with its new customer and are expected to enable the expansion of GT's LED, industrial and specialty sapphire businesses by positioning GT and its equipment customers as the industry's lowest-cost sapphire producers.
Accelerated development. Low cost. High volume.
Let the speculation begin.