GT Advanced Technologies

GTAT : NASDAQ : US$11.67
Target: US$15.00

GT Advanced Technologies is a manufacturer of capital
equipment for the solar and LED market. Specifically, its
CVD reactors and DSS furnaces have enhanced and
enabled many of the world’s largest solar companies in
the field of polysilicon production and ingot casting. The
company has also entered the sapphire ingot and
furnace business to expand the LED substrate market.

Sustainability — Energy & Power Technologies
Investment recommendation
We maintain our BUY rating on GTAT shares and are raising our target as
we have increased confidence that 1) the sapphire and polysilicon markets
are tightening and 2) the cover glass for smart phones is gaining significant
Investment highlights
 As detailed in our concurrent LED whitepaper The Third Cycle V5.1, we
see significant growth in sapphire volumes to support increased LED
adoption in general lighting. GT should continue to benefit from
investments in capacity over this cycle as a leading merchant equipment
provider for both sapphire as well as other LED technologies.
 We are seeing signs that the solar market is tightening as well, with
polysilicon prices stabilizing and even rising again. New capacity
projects have not yet begun but we see the need for capacity heading
into 2015/16 timeframe.
 The bigger driver to GT’s stock in the near term, however, is the cover
glass opportunity.
 Given conversations we have had in Asia with other sapphire suppliers
we are confident that Apple is indeed serious about sapphire cover glass
for an upcoming iPhone. We believe that there will be a model
introduced this year.
 We do not yet know GT’s economics and do not expect much color until
later this year. However, we are confident that this will be a lucrative
top- and bottom-line business given GT’s various sapphire-related
investments along with Apple’s commitment to the technology. We could
even see upside potential as Apple’s competitors rush into the market as


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