With persisting shortages for sapphire substrates, quotes are expected to trend up into the fourth quarter of 2010 and will exceed US$30/unit. To prevent idle production lines, some LED chipmakers are reportedly paying in advance to secure supply.

For 2-inch sapphire substrates, quotes were below US$15 in the first quarter of 2010 and went up to US$25-30 in the third quarter. LED chipmakers have begun price negotiation for the fourth quarter and expects quotes to rise to US$30-35. With sapphire substrate capacity gradually improving and demand projected to cool off around Chinese New Year in early 2011, sapphire substrate quotes could flatten around that time.

Some LED chipmakers have halted production lines and moved back delivery of MOCVD machines as a solution to the material shortage.