Supplier of artificial sapphires “Monocrystal” increases exports and revenue

Monocrystal, one of the world’s leading manufacturers of artificial sapphires (used in smartphones, watches, microelectronics), is increasing its revenue and exports, primarily through supplies to China. Market participants attribute the situation to the expansion of production of microelectronics in China, but they also allow the re-export of sapphires to third countries.

“Kommersant” got acquainted with the financial report of Energomera Concern JSC for 2022, published on the company’s official website on July 5. According to the document, the group’s total revenue increased by 0.64% to 15.6 billion rubles. The fastest growing company in the group was Monocrystal (manufacturer of artificial sapphires), whose revenue increased by 17% to 6.4 billion rubles.

The report says that growth is associated with the development of the LED market, an increase in sales of flagship smart watches and other electronics, primarily in China: in the reporting period, to double shipments of sapphire for the mobile device market and occupy a third of the market.”

The explanatory note to the financial report of Monocrystal itself for 2022 (published on March 30 in the SPARK-Interfax database) states that the revenue of its Chinese structure Monocrystal PV increased by 58% over the year, and net profit increased 22 times (absolute scores are not disclosed). According to the company’s forecast, by the end of 2023, Monocrystal PV’s revenue and net profit are expected to grow by another 10%. Oleg Kachalov, General Director of Monocrystal JSC, declined to comment. Energomer did not answer “Kommersant”.

After the introduction of US and EU sanctions against the Russian Federation, the Ministry of Industry and Trade allowed the export of artificial sapphires to be stopped “only as a last resort.” Then the share of Monocrystal in the world market of artificial sapphires was estimated at 40%, and in substrates for processors – at 80% (see Kommersant dated March 6, 2022). The interlocutor of Kommersant, who is familiar with the data of the Federal Customs Service (FTS), notes that in January-June 2022, the export of artificial sapphires from the Russian Federation increased by 65%, to 310 tons. At that time, the United States and South Korea sharply reduced the purchase of artificial sapphires from Russia, while China, Taiwan and a number of European countries increased their purchases. More recent data could not be found.

President of the Russian-Asian Union of Industrialists and Entrepreneurs (RAUIE) Vitaly Mankevich confirmed the current growth in demand for raw materials, including artificial sapphire, from Chinese corporations. According to him, given the complication of relations between China and Taiwan, Beijing has focused on Moscow as the main supplier of artificial sapphire: “Taking into account the increase in the production capacity of Chinese electronics and its elements, purchases have also grown.”

Sapphire substrates are a critical component that all electronics vendors work with, whose technical processes require wafers ranging in size from 6–8 to 12 inches, Oleg Izumrudov, executive director of the RosSKhD consortium, explains: “For example, Taiwanese TSMC fully works on such substrates.” According to him, polycrystalline silicon (on which microcircuits are built) due to its properties cannot be used without strong heat-resistant and inert substrates. Mr. Izumrudov believes that the growth in supplies to China is primarily due to the expansion of eight Chinese factories for the production of processors, but he also admits the possibility of reselling the material.

Timofey Kornev