© 2016

From Technologies to Market

Sapphire Applications & Market 2016

LED and Consumer Electronics

Report

From Technologies to Market

2

REPORT OBJECTIVES

The report provides a detailed analysis of the status and prospects of the sapphire industry for LED camera lenses and

fingerprint reader covers, smartwatch and smartphone displays:

• Trends and drivers in established and emerging applications

• LED chip manufacturing industry evolution

• Sapphire supply and demand: will global capacity decrease? Where are prices headed? Impact on revenue.Who will survive?

• Identify and describe the key players, both established and emerging

• Geographical trends

• Technology trends: crystal growth, wafer diameters, and patterned sapphire substrates (PSS)

• Emerging applications

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REPORT METHODOLOGY

©2016 | www.yole.fr | Sapphire Applications and Market 2016: LED and Consumer Electronics | Sample

Market segmentation methodology

Market forecast methodology

4

REPORT METHODOLOGY

Technology analysis methodology Information collection

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TABLE OF CONTENTS

• About p8

• Acronyms p9

• Product categories and applications covered in this report p10

• LED wafer forecast methodology p11

• Exchange rates p12

• What we saw, what we missed p13

• Executive Summary p14

• Sapphire Application breakdown

• LED Substrates

• LED filaments

• Consumer Electronic Applications

• Apple Supply Chain

• Smartwatches

• Display covers

• Supply and Demand

• Price Trends

• Captive and open markets

• 2015 Revenue

• Long Term Revenue forecast for Finished Products

• Noteworthy News for the Last 18 Months p50

• Introduction to The Sapphire Industry p58

• Sapphire industry overview

• Sapphire properties overview

• Sapphire properties vs. orientation

• Value chain

• Example: Sapphire wafer process

• Crystal Growth Geometric Yield

• Crystal Growth Process Yield

• Material defects and slicing

• Core / brick length

• Major industry players: crystal growth

• Major industry players: wafer slicing and finishing

• Major industry players: PSS

• Status of the Sapphire Industry p71

• Overview

• Price trends: cores for LED and optical wafers

• Impact of 2” Market Disappearance

• Grey Market

• Price trends: Conventional sapphire substrates for LED

• Price trends: patterned sapphire substrates for LED

• Discussion

• Price trends: bricks and optical wafers for consumer electronic

• Long Term price forecast

• 2015 top 20 Sapphire company revenue for core, bricks & wafers

• Detailed breakdown

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TABLE OF CONTENTS

• Revenue structure: captive and open markets

• 2015 revenue breakdown for Core & bricks and polished wafers

• 2015 revenue breakdown for optical and PSS wafers

• Geographic breakdown per product category

• Exchange rates impacts

• Status of the LED Industry p95

• Status of the LED Industry: 2015

• Status of the LED Industry: 2016

• 2011-2021 Nitride LED Substrate Breakdown Per Application

• LED Market Trends - Lighting

• LED bulb lifetimes

• LED Market Trends - Displays

• LED Video Displays

• LED Epitaxy (MOCVD) Capacity Trends p104

• Gan MOCVD capacity 2010-2016 evolution per region

• Top 10 Global LED Chipmakers by Capacity

• Top 20 LED Chipmakers In China

• Focus on China

• GaN MOCVD capacity supply vs demand trends

• Gan MOCVD Q3-2016 utilization rate per region

• Capacity and Wafer start - Geographic Breakdown

• LED Wafer Market & Forecast p113

• LED wafers value chain

• Vertical Integration

• Sapphire wafer consumption: Q3-2016 geographic breakdown

• Incentive for adoption of large diameter wafers

• Challenges for the adoption of large diameter wafers

• Conclusion

• Q3-2016 Diameter breakdown per region

• Q3-2016 Diameter breakdown - global

• 6” adoption Status

• LED wafer diameter breakdown 2008-2021.

• 2011-2021 sapphire wafer start by diameter

• Patterned sapphire substrates – benefits

• When are PSS used?

• PSS market: historical perspectives

• Pattern Design

• PSS manufacturing process overview

• Lithography techniques for LED

• Nano-PSS

• Nano-imprint Litography (NIL)

• Random structure NPSS

• NPSS Status

• Q3-2016 CSS and PSS consumption per region

• PSS Supply chain

• PSS Consumption and Sourcing Strategy

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TABLE OF CONTENTS

• PSS Capacity Breakdown by Region and Company Type

• 2011-2021 CSS and PSS volume forecast

• 2011-2021 Core shipment forecasts

• 2011-2021 PSS Revenue Trends

• 2011-2021 CSS revenue Trends

• 2011-2021 Revenue summary

• Alternative LED Substrates p150

• LED-on-si Overview

• LED-on-si cost of ownership

• LED-On-Si status Update

• Key players and strategic positioning

• GaN-On-Gan

• Alternative substrates adoption forecast

• “Optical Wafers” Market Review and Forecast: p160

• Introduction

• Sapphire Components at Apple

• Optical Wafer Manufacturing

• Camera lens covers: overview

• Recent Flagship Phones

• Dual Cameras

• Dual Camera for iPhones

• Lens cover Extraction Schemes

• Camera lens covers: adoption trends

• Sapphire Camera Lens Cover – 2022 Adoption forecast

• Fingerprint reader covers: overview

• Fingerprint reader Technology Trends

• Fingerprint reader covers: alternative technologies

• Fingerprint reader covers: sapphire use

• Fingerprint reader covers: Sapphire Cover adoption trends

• Heart Monitor Sensor covers

• Optical Wafers 2012 -2021 volume and revenue forecast

• Optical Wafers 2012 -2021 ingot (core) forecast

• Smart Watches Market Review & Forecast p182

• Introduction

• Forecasting the Smartwatch market

• Sapphire in Smartwatches: Apple Watch

• Sapphire in Smartwatches: Other brands

• Sapphire in Smartwatches: sapphire adoption rate forecast

• Apple Supply Chain 2015-2016 and Excess Inventory

• Sapphire covers design and slicing pitch

• Sapphire smartwatch cover volume & Revenue forecast

• Sapphire Display Covers p192

• Mobile devices display covers - Overview

• Touch panels – technology overview

• Display and touch sensor structures

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TABLE OF CONTENTS

• Touch sensors and display panels supply chain

• Display cover manufacturing process

• Potential Benefits of Sapphire display covers: mechanical strength

• Potential Benefits of Sapphire display covers: dielectric constant

• Putting Sapphire to The Test: GTAT vs Corning

• Putting Sapphire to The Test

• Impact of finishing process

• Conclusions on Mechanical Testing

• Major issues of Sapphire display covers: cost etc…

• Major issues with Sapphire display covers: reflectivity

• Anti-Reflection coating

• Can Ion Implantation Solve the Reflectivity Problem?

• Summary

• Current status

• Apple sapphire patent portfolio overview

• Rugged or Curved Displays: Which Strategy for Differentiation?

• 3D displays

• Sapphire Adoption trends

• Motorola Shatterproof Display

• Motorola Shatterproof Display

• Status At Apple

• Scenario: partial roll out in a Premium model

• Conclusions

• Display cover adoption rate forecast 2015-2021.

• Display cover volume forecast 2015-2021

• LED Filaments p225

• Overview

• Filament material

• Filament manufacturing process

• Performance and cost

• Industry Trends

• LED filament 2012-2021 shipment and revenue forecast

• Supply and Demand Analysis p236

• Definitions and metrics

• Brick and core extraction:

• Definitions and metrics: TIE

• From TIE to FIE (4 inch equivalent)?

• Finishing, CSS and PSS Geographic Capacity breakdown

• Crystal Growth Capacity: 2012-2016 evolution by region

• Crystal Growth 2015 to 2016 Capacity Bridge

• Crystal Growth Capacity: Top 20 ranking

• Crystal growth technology breakdown

• Finishing Capacity: 2012-2016 evolution by region

• Finishing: 2015 to 2016 Capacity Bridge

• finishing Capacity: Top 20 ranking

• PSS Capacity: 2012-2016 evolution by region

• PSS: 2015 to 2016 Capacity Bridge

• PSS Capacity: Top 20 ranking

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TABLE OF CONTENTS

• Material, finishing and PSS Supply vs demand

• Year On Year Capacity Trends

• Why is capacity still increasing?

• The zombie companies

• Attrition and consolidation

• Recent Attrition and Casualties In The Sapphire Industry

• Supply vs demand analysis: no sapphire display cover

• Supply vs demand analysis: sapphire display cover adoption

• Discussion

• Focus on China p269

• Overview

• 2014 vs 2015 Revenue

• Recent Projects

• Aurora Sapphire: Recent Trends

• Aurora sapphire: 2011-2015 revenue and gross margins trends

• Aurora sapphire: 2015 ASP and gross margins per product

• Apple Supply Chain Evolution: Biel and Lens

• Recent Events: Lens

• Recent Events: Biel

• LED Vertical Integration: San’an and Crystaland

• Crystaland 2015 Revenue and Gross Margin Breakdown

• Leading established companies

• Tier-2 and emerging companies

• Focus On Taiwan p288

• Overview

• 2011-2016 Revenue Trends

• 2015 vs 2014 revenue

• Recent Revenue Trends: CAT and Tera Xtal

• Recent Revenue Trends : Crystalwise and Rigidetch

• Recent Revenue Trends : Aceplux and Phecda

• Recent Revenue Trends: Procrystal

• Leading and emerging companies

• Focus On Korea p299

• Overview

• 2014 vs 2015 Revenue

• Recent Revenue Trends (iljin, STC, Hansol)

• Major companies

• Focus On Japan p304

• Overview

• Major companies

• Focus On Europe & Russia p307

• Overview

• Major companies

• Monocrystal

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TABLE OF CONTENTS

• Focus On North America p3012

• Rubicon

• Rubicon: 2014 and 2015 Revenue Breakdown

• GTAT

• Emerging Applications p317

• Introduction

• Example: Traditional Watch Industry

• Augmented Reality

• MicroLED displays

• Overview

• MicroLED Benefits

• Challenges: Overview

• Challenge in LED epitaxy and chip technologies

• Chip Separation Technologies:

• Chip Handling and Hybridization

• Color Conversion

• Conclusions

• Yole Presentation p332

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Biography & contact

ABOUT THE AUTHORS

Eric VIREY received a Ph-D in Optoelectronics from the National Polytechnic Institute of Grenoble. He’s held various R&D,engineering, manufacturing and marketing positions with Fortune 500 company Saint-Gobain in France and the United States. Inits most recent position, he was Market Manager Optoelectronics in charge various product lines and serving the LED, opticaltelecommunication and display industries. In parallel, he was leading the corporate “Lighting Community” effort, acting as amarket and technology competitive intelligence evangelist to identify and develop new business opportunities in solid statelighting and displays (LED/OLEDs) across multiple business units.

Eric has a broad knowledge of the solid state lighting and display value chains. In 2009, he joined Yole Developpement as a SeniorMarket and Technology Analyst for Solid State Lighting and Displays

Eric is also author / co-author of multiple reports (examples below) and contributed to various custom projects.

• LED Packaging

• LED Front End Manufacturing

• III-V Epitaxy

• Bulk GaN

• GaN on Silicon

• Status of the LED Industry

• Sapphire Market & Applications

• Phosphors and Quantum Dots

• …

Contact: virey@yole.fr

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PRODUCT CATEGORIES AND APPLICATIONS COVERED IN THIS REPORT

Volume and revenue

forecast for the check marked

items are covered in this report.

Cores

Bricks

Single side polished Conventional

Sapphire Wafers (CSS) for LED and

Silicon On Sapphire epitaxy

Patterned Sapphire Substrates

(PSS) for LED epitaxy

Double Side Polished

Optical Wafer

Covers for camera lens, fingerprint

reader and heart rate monitor

Covers for camera lens, fingerprint

reader and heart rate monitor

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LED WAFER FORECAST METHODOLOGY

Our methodology is based on both top bottom and a bottom up approach with dozens of interviews of companies across the entire value chain (sapphire, LED…)

LED Demand by application(9 Segments / 24 sub segments)

LED Die surface per segment (assuming typical sapphire based LED lm/mm2 output)

Substrate surface per application segment

2” wafer demand* (TIE)

2” material demand

(mm of TIE)

General

Lighting

Personal

Lighting

Projectors Sign and Large

Displays

Automotive Cell Phone Other

displaysLCD TV

Monitors

Netbooks

notebooks

Account for in process and binning yields for each application

Wafer Diameter breakdown

3” wafer demand (TIE) 4” wafer demand (TIE) 6” wafer demand (TIE)

3” material demand

(mm of TIE)

4” material demand

(mm of TIE)

6” material demand

(mm of TIE)

Account for thickness + core extraction yields

Sapphire Material Demand (mm of TIE)

Substrate type: Sapphire / Silicon / GaN – convert surface based on lm/mm2 for each material

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SAPPHIRE APPLICATION BREAKDOWN

LED remains the dominant application in 2016 as smartwatches disappoint and decrease below 2015 levels and the smartphone display cover opportunity doesn’t take off.

LED SubstratesOptical Wafers

Smartwatch

Cover Glass

Cell Phone

Cover Glass

Huawei

2016 Material Consumption Breakdown Per Applications.

(Note: excludes traditional watches, aerospace, defense etc…)

Kyocera

Total:

XXXM

mm of

TIE

Apple

Apple

Osram

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LED SUBSTRATES

• China experienced significant attrition and

some consolidations among smaller, tier-3

LED chipmakers. Nevertheless leading

companies such as XXXX and XXX both

kept increasing capacity in a bid to establish

dominance on the domestic market and cash

in on government subsidies about expire and

the end of 2016.

• XXXX now boasts the #1 MOCVD capacity

worldwide ahead of Taiwan-based rival Epistar.

• Overall, despite attrition in most regions

(Taiwan, China, Korea) worldwide MOCVD

capacity has increased by another XX% over

the last 12 months.

• Most companies also increase capacity

through process yield and efficiency. This

includes a reduction of the epilayer thickness,

often enabled by the use of an AlN PVD

buffer layer.

XXX is now the #1 company in term of MOCVD capacity and 4 Chinese companies are in the top 10.

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CONSUMER ELECTRONIC APPLICATIONS

Dual Cameras improve depth of perception, brightness, low light and color performance

HTC M8

(2014)HTC Butterfly 2

(2014)

Huawei Honor

6+ (2014)

HTC M9+

(2015)

ZTE Axon

(2015)

Huawei P9

(2016)

Xiaomi Redmi

Pro (2016)LG G5

(2016)

• Dual cameras are emerging as elements of differentiation in flagship cell

phones but have yet to demonstrate that the image quality improvement is

able to drive significant competitive advantage vs the extra cost of

implementation.

• Yole scenario is that dual rear cameras will not see large adoption. On the

other hand, a front dual camera may provide significant improvement in terms

of features such as video calling enhancement capabilities: background removal,

eye contact, parallax correction, avatars, gesture control etc. Front dual

cameras are already featured in the LGV10 introduced in February 2016.

• But adoption in front face camera won’t have any impact on sapphire demand

since the module seats behind the display cover. The LG V10 Front camera

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TDG

APPLE SUPPLY CHAIN

2014 Camera lens and Fingerprint Reader Material Fluxes 2014 Apple Watch Material Fluxes

Material (Bricks) Slicing + PolishingCoating + Laser Cutting – Silk

PrintingAssembly

2016 Camera lens, Fingerprint Reader and Apple Watch Material Fluxes

2014 S

upply

Chai

n

< 40%Others?

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SMARTWATCHES

• So far most major smartwatch models beside the Apple Watch have been using glass. Only a few models

of Smartwatches offered by consumer electronic companies so far feature Sapphire: Huawei Watch, Garmin fēnix® 3

Sapphire and a few more anecdotic models.

• Sapphire has been more popular among traditional luxury (or high end) watch makers that are attempting to provide

products in the tradition of the Swiss watch industry, yet incorporating connected or smartwatch-like features. This

include for example the TAG Heuer Connected.

Overall adoption of sapphire was

limited in 2015 and driven by

Apple.

Brand

2015 Unit

Shipped

Estimates

% SapphireTotal

Sapphire

Apple XXM XX% XXM

Google

/MotorolaXXM XX% XX

Samsung XXM XX% XX

Pebble XXM XX% XX

Sony XXM XX% XX

LG XXM XX% XX

Garmin XXM XX% XXM

Huawei XXM XX% XXM

Others XXM XX% XXM

Total XXM XXM The Huawei Watch features

a sapphire window2015 smartwatch shipment breakdown (Yole estimates)

Garmin fēnix® 3 Sapphire

features a sapphire window

The TAG Heuer

Connected feature

a sapphire window

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PRICE TRENDS

• Continuous excess supply

combined with a significant drop in

LED wafer demand in Q3 and Q4

2015 led to an acceleration of ASP

decrease over the last 12 months.

• We expect ASP to stabilize in Q4-

2016. Price will resume a

downward trend in 2017 but most

likely at a slower pace than in 2015

and 2016.

• For 4” wafers, most companies are

operating with very low or

negative gross margins. There is still

room for decrease of 6” products

where companies able to grow

larger crystals (>80 or 100kg)

while maintaining high yields are at

an advantage.

• Chinese suppliers capture higher

ASP (10% of more) because their

products are no subject to duty

taxes on their domestic market

ASP have decrease more than 30% per year in 2015 and 2016 with cores the hardest hit.

Cores Average

2014

Average

2015

Average

2016 (F)

2015 vs

2014

2016 vs

2015

2" $ 3.6 $ 2.0 $ 1.0 -44% -51%

4" $ 14.9 $ 9.3 $ 5.5 -38% -40%

6" $ 40.3 $ 31.0 $ 21.2 -23% -32%

Average: -35% -41%

CSS Average

2014

Average

2015

Average

2016

2015 vs

2014

2016 vs

2015

2" $ 6.9 $ 5.2 $ 3.3 -25% -38%

4" $ 30.0 $ 22.0 $ 14.4 -27% -35%

6" $ 121.0 $100.0 $ 73.8 -17% -26%

Average: -23% -33%

PSS Average

2014

Average

2015

Average

2016

2015 vs

2014

2016 vs

2015

2" $ 12.8 $ 9.6 $ 6.0 -25% -38%

4" $ 51.0 $ 36.0 $ 23.9 -29% -34%

6" $ 155.3 $ 121.3 -22%

Average: -27% -31%

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2015 REVENUE

In this depressed

pricing trend and

increasing captive

market, revenue

decreased XX% in

2015 despite an

overall XX%

volume increase.

The top 5

companies

captured XX% and

the top 20 XX%

• The revenue below include: cores and bricks, finished wafers (LED, SOS and optical wafers), PSS and other optical

products (windows, etc…). Finished components with coating, silk printing etc…are NOT included.

2015

RankingCompany Local Name

2015

Revenue

2014

Revenue

Previous

Ranking

1 Rigidtech (TW) 銳捷科技股份有限公司 $ 75 $ 79 3

2 Aurora Sapphire (CN) 哈尔滨奥瑞德光电技术股份有限公司 $ 71 $ 74 4

3 Monocrystal (RU) Монокристалл $ 69 $ 87 1

4 Namiki (JP) 並木精密宝石 $ 67 $ 87 1

5 Crystalwise (TW) 兆遠科技股份有限公司 $ 53 $ 71 5

6 Kyocera (JP) 京セラ $ 47 $ 61[1] 7

7 Crystal Applied Technology (TW) 晶美應用材料股份有限公司 $ 47 $ 64 6

8 Crystaland (CN) 云南蓝晶科技股份有限公司 $ 46 $ 31 14

9 JeShine (CN) 江苏吉星新材料有限公司 $ 43 $ 22 21

10 Hansol Technics (KR) 한솔테크닉스 $ 36 $ 44 10

11 Iljin Display (KR) 일진디스플레이 $ 32 $ 38 12

12 SSLM (KR) 에스에스엘엠주식회사 $ 27 $ 25 18

13 Sapphire Technology (KR) 사파이어테크놀로지 $ 26 $ 46 8

14 Sinopat (CN) 东莞市中镓半导体科技有限公司 $ 26 $ 28 17

15 TDG Core (CN) 天通银厦新材料有限公司 $ 25 $ 11 29

16 Rubicon (US) $ 24 $ 46 9

17 GAPSS (CN) 徐州同鑫光电科技有限公司 $ 23 $ 32 13

18 Tera Xtal (TW) 鑫晶鑽科技股份有限公司 $ 22 $ 42 11

19 Crystal Optech (CN) 浙江水晶光电科技股份有限公司 $ 21 $ 25 19

20 NJC (CN) 南京京晶光电科技有限公司 $ 18 $ 29 15

21 Others: $ 207 $ 304

22 Total $ 1,005 $ 1,246

[1] Revised ©2016 | www.yole.fr | Sapphire Applications and Market 2016: LED and Consumer Electronics | Sample

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EXAMPLE: SAPPHIRE WAFER PROCESS

Crystal GrowthBoule Cropping,

X-Ray orientation, CoreExtraction & Cropping

Core cropping, X-ray core orientation, OD grinding /

orientation adjustment, Notch or flat grinding

Picture:ThermalTechnology

Illustration :Rubicon Technology

Metrology: Thickness, BOW, TTV, TV5

Thickness and quality sorting (up to 30 bins)

Illustration: Meyer Burger

Illustration: Meyer Burger

Slicing

Illustration: Meyer Burger Illustration: Meyer Burger

Lapping or Grinding

Picture:TeraXtal

Shape measurement, flip sorting (concave / convex)

Illustration: Meyer Burger

Mechanical Polishing + CMP

Illustration: Meyer BurgerPicture:Corning/Tropel

Metrology (Bow, Warp, TTV, LTV, Sori, Sag…)

Laser markingFinal cleaning

Core mounting

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2011-2021 SAPPHIRE WAFER START BY DIAMETER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.

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NANO-PSS

• Nano PSS (NPSS) are similar to traditional PSS but use sub-micron patterns with typical dimension in the 250 to1000 nm range. Compared to traditional PSS, NPSS have been reported to increases Light Extraction Efficiency(LEE) at the chip level by another 10-20% versus standard PSS.

• Due to the lower depth and higher density of the patterns, NPSS also reduces etching and epitaxial coalescencetimes.This could increase MOCVD throughput and lower equipment cost.

NPSS could increase light output by 10-20% versus standard PSS and could increase MOCVD throughput. But they are challenging to manufacture.

CSS PSS NPSS

Light with large incident angle is reflected and eventually re-

absorbed.

Light with large incident angle is reflected at a different angle, increasing chances to escape

Light with large incident angle is scattered at multiple angles (diffuse reflection) further increasing chances to escape

Closer patterns promote faster coalescence and dislocation annihilation

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INDUSTRY TRENDS

• Epistar has acquired a significant

patent portfolio around LED

filament and is cooperating with

downstream customers including

leading Chinese LED packager and

LED luminaire manufacturer XXX

(XXX) to design LED filament bulb

and specific chips.

• MLS is significantly expanding its

LED filament bulb business. In

January 2016, it announced the

acquisition of XXX a Hong Kong

based CFL and halogen lamp

manufacturer which entered the

LED Filament bulb market in 2009

and has more than 200 references

on its catalog under its “Luxtek”

brand.

• Other Epistar licensees include

XXX and XXXSource: Epistar

Epistar has a strong IP position on LED filament technologies.

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CRYSTAL GROWTH CAPACITY: 2012-2016 EVOLUTION BY REGION

Global crystal growth capacity

tripled over the last 4

years, and kept increasing in 2015-2016

despite significant

overcapacity

• Despite some attrition, global crystal

growth capacity keeps increasing.

• In China, capacity increased XXXx in the

last 4 years, faster than any other region.

China increased its capacity share from

XXX% in 2012 to XXX% in 2016.

• China experienced a 1st wave of investment

in 2010-2011, driven by subsidies in the LED

market and a 2nd in 2014, driven by hopes

of the emergence of display cover

applications.

• However, we’re starting to see some

attrition: companies such as Shangcheng and

Hyperion Geocrystal have stopped crystal

growth activities.

• Many other companies have not officially

pulled the plug but their capacity is mostly

frozen. The numbers on the graphs

presented on this page therefore represent

the installed capacity rather than the

currently active capacity.Note: breakdown based on capacity physically present in each region (not by headquarter

location of the company)

2015

2014

2012

2016

Total: XXX

million of

mm of TIE

per month as

of Q3-2016

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MONOCRYSTAL

The company keeps increasing capacity through process improvement and new equipment

Monocrystal capacity evolution Top: Monocrystal 300kg KY boule.

Bottom: bricks and cores.

14

Finishing capacity

increasing to XXM by

the end of 2016

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OVERVIEW

• In a typical display, each pixel is constituted of Red, Green and Blue (RGB) subpixels controlled independently

by a matrix of transistors.

• The idea behind MicroLED displays is to use individual, small LED chips as the sub-pixel. Typical sizes are below

100 µm, often as small as 10-20 µm. The chips are positioned and connected to the transistor matrix via a pick

and place process.

µLED display is a self emitting display technologies where each subpixel is an individual LED chip

Red, Green, Blue LED

Epiwafers

Chip singulation Sorting and Pick and place +

hybridization to the transistor matrix

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(1) Our Terms and Conditions of Sale are available at www.yole.fr/Terms_and_Conditions_of_Sale.aspx The present document is valid 24 months after its publishing date: September 12, 2016

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ABOUT YOLE DEVELOPPEMENT

BILL TO

Name (Mr/Ms/Dr/Pr):

Job Title:

Company:

Address:

City:

State:

Postcode/Zip:

Country*:

*VAT ID Number for EU members:

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Email:

Date:

PRODUCT ORDER

Please enter my order for above named report: One user license*: Euro 5,490 Multi user license: Euro 6,490- The report will be ready for delivery from September 12, 2016- For price in dollars, please use the day’s exchange rate. All reports are

delivered electronically at payment reception. For French customers, add 20% for VAT

I hereby accept Yole Développement’s Terms and Conditions of Sale(1)

Signature:

*One user license means only one person at the company can use the report.

Founded in 1998, Yole Développement has grown to become a group of companies providing marketing, technology and strategy consulting, media in addition to corporate finance services. With a strong focus on emerging applications using silicon and/or micro manufacturing (technology or process), Yole Développement group has expanded to include more than 50 associates worldwide covering MEMS, Compound Semiconductors, LED, Image Sensors, Optoelectronics, Microfluidics & Medical, Photovoltaics, Advanced Packaging, Manufacturing, Nanomaterials and Power Electronics. The group supports industrial companies, investors and R&D organizations worldwide to help them understand markets and follow technology trends to develop their business.

MEDIA & EVENTS• i-Micronews.com, online disruptive technologies website• @Micronews, weekly e-newsletter• Communication & webcasts services• Events: Yole Seminars, Market Briefings…More information on www.i-micronews.com

CONTACTSFor more information about :• Consulting Services: Jean-Christophe Eloy (eloy@yole.fr)• Financial Services: Jean-Christophe Eloy (eloy@yole.fr)• Report Business: Fayçal Khamassi (khamassi@yole.fr)• Press relations: Sandrine Leroy (leroy@yole.fr)

CONSULTING• Market data & research, marketing analysis• Technology analysis• Reverse engineering & costing services• Strategy consulting• Patent analysisMore information on www.yole.fr

REPORTS• Collection of technology & market reports• Manufacturing cost simulation tools• Component reverse engineering & costing

analysis• Patent investigationMore information on www.i-micronews.com/reports

FINANCIAL SERVICES• Mergers & Acquisitions• Due diligence• FundraisingMore information on Jean-Christophe Eloy (eloy@yole.fr)

Definitions: “Acceptance”: Action by which the Buyer accepts the terms and conditions of sale in their entirety. It is done by signing the purchase order which mentions “I hereby accept Yole’s Terms and Conditions of Sale”.

“Buyer”: Any business user (i.e. any person acting in the course of its business activities, for its business needs) entering into the following general conditions to the exclusion of consumers acting in their personal interests.

“Contracting Parties” or “Parties”: The Seller on the one hand and the Buyer on the other hand.

“Intellectual Property Rights” (“IPR”) means any rights held by the Seller in its Products, including any patents, trademarks, registered models, designs, copyrights, inventions, commercial secrets and know-how, technical information, company or trading names and any other intellectual property rights or similar in any part of the world, notwithstanding the fact that they have been registered or not and including any pending registration of one of the above mentioned rights.

“License”: For the reports and databases, 3 different licenses are proposed. The buyer has to choose one license:• One user license: one person at the company can use the report.• Multi-user license: the report can be used by unlimited users

within the company. Subsidiaries and Joint-Ventures are not included.

• Corporate license: purchased under “Annual Subscription” program, the report can be used by unlimited users within the company. Joint-Ventures are not included.

“Products”: Depending on the purchase order, reports or database on MEMS, CSC, Optics/MOEMS, Nano, bio… to be bought either on a unit basis or as an annual subscription. (i.e. subscription for a period of 12 calendar months). The annual subscription to a package (i.e. a global discount based on the number of reports that the Buyer orders or accesses via the service, a global search service on line on I-micronews and a consulting approach), is defined in the order. Reports are established in PowerPoint and delivered on a PDF format and the database may include Excel files.

“Seller”: Based in Lyon (France headquarters), Yole Développement is a market research and business development consultancy company, facilitating market access for advanced technology industrial projects. With more than 20 market analysts, Yole works worldwide with the key industrial companies, R&D institutes and investors to help them understand the markets and technology trends.

1. SCOPE 1.1 The Contracting Parties undertake to observe the following

general conditions when agreed by the Buyer and the Seller. ANY ADDITIONAL, DIFFERENT, OR CONFLICTING TERMS AND CONDITIONS IN ANY OTHER DOCUMENTS ISSUED BY THE BUYER AT ANY TIME ARE HEREBY OBJECTED TO BY THE SELLER, SHALL BE WHOLLY INAPPLICABLE TO ANY SALE MADE HEREUNDER AND SHALL NOT BE BINDING IN ANY WAY ON THE SELLER.

1.2 This agreement becomes valid and enforceable between the Contracting Parties after clear and non-equivocal consent by any duly authorized person representing the Buyer. For these purposes, the Buyer accepts these conditions of sales when signing the purchase order which mentions “I hereby accept Yole’s Terms and Conditions of Sale”. This results in acceptance by the Buyer.

1.3 Orders are deemed to be accepted only upon written acceptance and confirmation by the Seller, within [7 days] from the date of order, to be sent either by email or to the Buyer’s address. In the absence of any confirmation in writing, orders shall be deemed to have been accepted.

2. MAILING OF THE PRODUCTS 2.1 Products are sent by email to the Buyer:

• within [1] month from the order for Products already released; or • within a reasonable time for Products ordered prior to their effective release. In this case, the Seller shall use its best endeavours to inform the Buyer of an indicative release date and the evolution of the work in progress.

2.2 Some weeks prior to the release date the Seller can propose a pre-release discount to the Buyer The Seller shall by no means be responsible for any delay in respect of article 2.2 above, and including incases where a new event or access to new contradictory information would require for the analyst extra time to compute or compare the data in order to enable the Seller to deliver a high quality Products.

2.3 The mailing of the Product will occur only upon payment by the Buyer, in accordance with the conditions contained in article 3.

2.4. The mailing is operated through electronic means either by email via the sales department or automatically online via an email/password. If the Product’s electronic delivery format is defective, the Seller undertakes to replace it at no charge to the Buyer provided that it is informed of the defective formatting within 90 days from the date of the original download or receipt of the Product.

2.5 The person receiving the Products on behalf of the Buyer shall immediately verify the quality of the Products and their conformity to the order. Any claim for apparent defects or for non-conformity shall be sent in writing to the Seller within 8 days of receipt of the Products. For this purpose, the Buyer agrees to produce sufficient evidence of such defects. .

2.6 No return of Products shall be accepted without prior information to the Seller, even in case of delayed delivery. Any Product returned to the Seller without providing prior information to the Seller as required under article 2.5 shall remain at the Buyer’s risk.

3. PRICE, INVOICING AND PAYMENT 3.1 Prices are given in the orders corresponding to each Product

sold on a unit basis or corresponding to annual subscriptions. They are expressed to be inclusive of all taxes. The prices may be reevaluated from time to time. The effective price is deemed to be the one applicable at the time of the order.

3.2 Yole may offer a pre release discount for the companies willing to acquire in the future the specific report and agreeing on the fact that the report may be release later than the anticipated release date. In exchange to this uncertainty, the company will get a discount that can vary from 15% to 10%.

3.3 Payments due by the Buyer shall be sent by cheque payable to Yole Développement, credit card or by electronic transfer to the following account: HSBC, 1 place de la Bourse 69002 Lyon France Bank code: 30056 Branch code: 00170 Account n°: 0170 200 1565 87BIC or SWIFT code: CCFRFRPP IBAN: FR76 3005 6001 7001 7020 0156 587

To ensure the payments, the Seller reserves the right to request down payments from the Buyer. In this case, the need of down payments will be mentioned on the order. 3.4 Payment is due by the Buyer to the Seller within 30 days

from invoice date, except in the case of a particular written agreement. If the Buyer fails to pay within this time and fails to contact the Seller, the latter shall be entitled to invoice interest in arrears based on the annual rate Refi of the «BCE» + 7 points, in accordance with article L. 441-6 of the French Commercial Code. Our publications (report, database, tool...) are delivered only after reception of the payment.

3.5 In the event of termination of the contract, or of misconduct, during the contract, the Seller will have the right to invoice at the stage in progress, and to take legal action for damages.

4. LIABILITIES 4.1 The Buyer or any other individual or legal person acting on

its behalf, being a business user buying the Products for its business activities, shall be solely responsible for choosing the Products and for the use and interpretations he makes of the documents it purchases, of the results he obtains, and of the advice and acts it deduces thereof.

4.2 The Seller shall only be liable for (i) direct and (ii) foreseeable pecuniary loss, caused by the Products or arising from a material breach of this agreement

4.3 In no event shall the Seller be liable for: a) damages of any kind, including without limitation, incidental or consequential damages (including, but not limited to, damages for loss of profits, business interruption and loss of programs or information) arising out of the use of or inability to use the Seller’s website or the Products, or any information provided on the website, or in the Products; b) any claim attributable to errors, omissions or other inaccuracies in the Product or interpretations thereof.

4.4 All the information contained in the Products has been obtained from sources believed to be reliable. The Seller does not warrant the accuracy, completeness adequacy or reliability of such information, which cannot be guaranteed to be free from errors.

4.5 All the Products that the Seller sells may, upon prior notice to the Buyer from time to time be modified by or substituted with similar Products meeting the needs of the Buyer. This modification shall not lead to the liability of the Seller, provided that the Seller ensures the substituted Product is similar to the Product initially ordered.

4.6 In the case where, after inspection, it is acknowledged that the Products contain defects, the Seller undertakes to replace the defective products as far as the supplies allow and without indemnities or compensation of any kind for labor costs, delays, loss caused or any other reason. The replacement is guaranteed for a maximum of two months starting from the delivery date. Any replacement is excluded for any event as set out in article 5 below.

4.7 The deadlines that the Seller is asked to state for the mailing of the Products are given for information only and are not guaranteed. If such deadlines are not met, it shall not lead to any damages or cancellation of the orders, except for non acceptable delays exceeding [4] months from the stated deadline, without information from the Seller. In such case only, the Buyer shall be entitled to ask for a reimbursement of its first down payment to the exclusion of any further damages.

4.8 The Seller does not make any warranties, express or implied, including, without limitation, those of sale ability and fitness for a particular purpose, with respect to the Products. Although the Seller shall take reasonable steps to screen Products for infection of viruses, worms, Trojan horses or other codes containing contaminating or destructive properties before making the Products available, the Seller cannot guarantee that any Product will be free from infection.

5. FORCE MAJEURE The Seller shall not be liable for any delay in performance directly or indirectly caused by or resulting from acts of nature, fire, flood, accident, riot, war, government intervention, embargoes, strikes, labor difficulties, equipment failure, late deliveries by suppliers or other difficulties which are beyond the control, and not the fault of the Seller.

6. PROTECTION OF THE SELLER’S IPR 6.1 All the IPR attached to the Products are and remain the

property of the Seller and are protected under French and international copyright law and conventions.

6.2 The Buyer agreed not to disclose, copy, reproduce, redistribute, resell or publish the Product, or any part of it to any other party other than employees of its company. The Buyer shall have the right to use the Products solely for its own internal information purposes. In particular, the Buyer shall therefore not use the Product for purposes such as: • Information storage and retrieval systems; • Recordings and re-transmittals over any network (including

any local area network); • Use in any timesharing, service bureau, bulletin board or

similar arrangement or public display; • Posting any Product to any other online service (including

bulletin boards or the Internet);• Licensing, leasing, selling, offering for sale or assigning the

Product. 6.3 The Buyer shall be solely responsible towards the Seller of

all infringements of this obligation, whether this infringement comes from its employees or any person to whom the Buyer has sent the Products and shall personally take care of any related proceedings, and the Buyer shall bear related financial consequences in their entirety.

6.4 The Buyer shall define within its company point of contact for the needs of the contract. This person will be the recipient of each new report in PDF format. This person shall also be responsible for respect of the copyrights and will guaranty that the Products are not disseminated out of the company.

6.5 In the context of annual subscriptions, the person of contact shall decide who within the Buyer, shall be entitled to access on line the reports on I-micronews.com. In this respect, the Seller will give the Buyer a maximum of 10 password, unless the multiple sites organization of the Buyer requires more passwords. The Seller reserves the right to check from time to time the correct use of this password.

6.6 In the case of a multisite, multi license, only the employee of the buyer can access the report or the employee of the companies in which the buyer have 100% shares. As a matter of fact the investor of a company, the joint venture done with a third party etc..cannot access the report and should pay a full license price.

7. TERMINATION 7.1 If the Buyer cancels the order in whole or in part or postpones

the date of mailing, the Buyer shall indemnify the Seller for the entire costs that have been incurred as at the date of notification by the Buyer of such delay or cancellation. This may also apply for any other direct or indirect consequential loss that may be borne by the Seller, following this decision.

7.2 In the event of breach by one Party under these conditions or the order, the non-breaching Party may send a notification to the other by recorded delivery letter upon which, after a period of thirty (30) days without solving the problem, the non-breaching Party shall be entitled to terminate all the pending orders, without being liable for any compensation.

8. MISCELLANEOUS All the provisions of these Terms and Conditions are for the benefit of the Seller itself, but also for its licensors, employees and agents. Each of them is entitled to assert and enforce those provisions against the Buyer. Any notices under these Terms and Conditions shall be given in writing. They shall be effective upon receipt by the other Party. The Seller may, from time to time, update these Terms and Conditions and the Buyer, is deemed to have accepted the latest version of these terms and conditions, provided they have been communicated to him in due time.

9. GOVERNING LAW AND JURISDICTION 9.1 Any dispute arising out or linked to these Terms and

Conditions or to any contract (orders) entered into in application of these Terms and Conditions shall be settled by the French Commercial Courts of Lyon, which shall have exclusive jurisdiction upon such issues.

9.2 French law shall govern the relation between the Buyer and the Seller, in accordance with these Terms and Conditions.

TERMS AND CONDITIONS OF SALES

Yole Développement

From Technologies to Market

30©2016 | www.yole.fr | About Yole Développement

MEMS &

Sensors

LED

Compound

Semi.

Imaging Photonics

MedTech

Manufacturing

Advanced Packaging

Batteries / Energy

Management

Power

Electronics

FIELDS OF EXPERTISE

Yole Développement’s 30 analysts operate in the following areas

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4 BUSINESS MODELS

o Consulting and Analysis

• Market data & research, marketing analysis

• Technology analysis

• Strategy consulting

• Reverse engineering & costing

• Patent analysis

www.yole.fr

o Reports

• Market & Technology reports

• Patent Investigation and patent infringement risk analysis

• Teardowns & Reverse Costing Analysis

• Cost Simulation Tool

www.i-Micronews.com/reports

o Financial services

• M&A (buying and selling)

• Due diligence

• Fundraising

• Maturation of companies

• IP portfolio management & optimization

www.yolefinance.com

www.bmorpho.com

o Media

• i-Micronews.com website

• @Micronews e-newsletter

• Communication & webcast services

• Events

www.i-Micronews.com

32

A GROUP OF COMPANIES

Market,

technology and

strategy

consulting

www.yole.fr

M&A operations

Due diligences

www.yolefinance.com

Fundraising

Maturation of companies

IP portfolio management & optimization

www.bmorpho.com

Manufacturing costs analysis

Teardown and reverse engineering

Cost simulation tools

www.systemplus.fr

IP analysis

Patent assessment

www.knowmade.fr

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OUR GLOBAL ACTIVITY

34

SERVING THE ENTIRE SUPPLY CHAIN

Our analysts provide market

analysis, technology

evaluation, and business plan

along the entire supply

chain

Integrators and

end-users

Device

makers

Suppliers: material,

equipment, OSAT,

foundries…

Financial investors,

R&D centers

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CONTACT INFORMATION

Follow us on

• Consulting and Specific Analysis

• North America: Steve LaFerriere, Director of Northern America Business DevelopmentEmail: laferriere@yole.fr

• Asia: Takashi Onozawa, Representative Director, Yole KK.Email: onozawa@yole.fr

• RoW: Jean-Christophe Eloy, CEO & President, Yole DéveloppementEmail eloy@yole.fr

• Report business

• North America: Steve LaFerriere, Director of Northern America Business DevelopmentEmail: laferriere@yole.fr

• Europe: Lizzie Levenez, EMEA Business Development ManagerEmail: levenez@yole.fr

• Japan & Asia: Takashi Onozawa, Representative Director, Yole KK.Email: onozawa@yole.fr

• Greater China: Mavis Wang, Business Development DirectorEmail: wang@yole.fr

• Financial services

• Jean-Christophe Eloy, CEO & PresidentEmail: eloy@yole.fr

• General

• Email: info@yole.fr