Editor's note: A previous version of this article misstated one of GTAT's business segments. The article has been corrected to reflect this. The Fool regrets the error.

The solar technology sector continues to be rife with promise as the world looks to greener sources of energy. Solar technology companies such as GT Advanced Technologies (NASDAQOTH:GTATQ), SunEdison (NASDAQOTH:SUNEQ), and Applied Materials (NASDAQ:AMAT) are usually at the forefront of new solar technological advancements, and face an ever-rising demand for higher-efficiency solar panels at an affordable price. Many of these companies also have sapphire LED segments, and the demand for these products has been hot lately. Companies with huge exposure to sapphire LED such as Veeco Instruments (NASDAQ:VECO) and Rubicon Technology have been benefiting from the high demand for sapphire products.

GT Advanced Technologies
GT Advanced Technologies is one of the biggest names in the sector. Its shares gained a whopping 560% last year, and have more than doubled in the last six months. GT Advanced Technologies makes hi-tech equipment that is used to manufacture solar and sapphire LED, or light-emitting-diodes, products. The company's solar segment is seeing rising demand as the global demand for solar products keeps growing. Below is a table that shows how the growth in global solar energy demand has been progressing:

Global Solar Industry

2010

2011

2012

2013

2014E

Output (Gigawatts)

19.9

27.9

31.9

36

49

Estimates by Solar Buzz

Solar companies are usually faced with the daunting challenge of producing higher-efficiency solar panels while keeping costs low. The problem is that the most efficient panels are usually so expensive that they can only be used for specialized applications, such as satellites and Mars Rovers. A major drawback of solar products for consumers remains the high cost of the panels and the long time required for customers to recoup their investments through accumulated savings on power bills. This tends to limit demand for solar technology products.

GT Advanced Technology has three large business segments. The firm's photovoltaic segment is the biggest contributor to its top line. Polysilicon is used in the manufacture of solar panels, and is the company's second-biggest segment. The company's sapphire segment is the smallest, but the one that's showing the most promise.

Revenue ($millions)

2011

2012

2013

PV

740.1

375.5

31

Polysilicon

143.6

363.3

220

Sapphire

15.3

216.9

48

Total

899

955.7

299

Source: GT Advanced Technologies Company Filings

Note: The company shifted its end-of-year from March to December in 2012.

The sapphire LED business has been heating up intensely recently. LED prices have fallen so much that it has stimulated a sharp increase in the demand for LED products. GT Technologies' exposure to the sector has simultaneously risen sharply.

Revenue ($millions)

2011

2012

2013

Sapphire

15.3

216.9

48

% of Revenue

1.7%

22.7%

16%

The latest rally of GT Advanced Technologies' shares was spurred by the announcement that the company has struck a $578 million deal with Apple, wherein the latter wants to use GTAT's sapphire. The details of the deal are still sketchy at best, but speculation abounds that Apple wants to use GTAT's sapphire crystals in its latest mobile devices. If this is the case then GTAT will see sapphire become the firm's predominant segment, accounting for about 80% of its revenues, up from the current mid-twenties share.

But Corning, the manufacturer of the Gorilla Glass used in Apple's iphones, warns that sapphire is 10 times more expensive than Gorilla Glass,  is 1.6 times heavier, is environmentally unfriendly, and requires 100 times more energy to manufacture. Sapphire also transmits less light. In short, sapphire is an apparent bomb from a consumer viewpoint. It is, therefore, best to adopt a wait-and-see attitude before investing in shares on this premise alone, although overall they are a sound investment.

SunEdison
SunEdison shares climbed 350% last year. The company has morphed from a silicon wafer maker to a full-service solar energy provider, with a promising pipeline of new solar projects. For instance, the company plans to spin off its minority interest in its semi-conductor business to concentrate on solar energy.

Veeco Instruments
Veeco Instruments has a new and promising sapphire LED manufacturing tool that is currently in beta testing. According to the company, the new tool has major performance enhancements that will significantly increase throughput. This will enable the company to charge premium pricing for it, and help to drive its gross margin back to its historic 40%.

Applied Materials
Applied Materials' results have for some time now been a roller-coaster of revenue upsides and downsides, reflecting the boom-and-bust market cycles for semiconductors. However, in the last quarter its revenue shot up 39% due to what the company termed 'major technology trends' that are playing into its hands. The company makes the complex machines that turn silicon wafers into computer chips.

Applied Materials plans to fully acquire Japanese chipmaker Tokyo Electronics in a deal that will see the creation of the world's largest chip manufacturing equipment supplier. Applied Materials' venture capital arm is backing up Semprius, a solar panel upstart whose panels have demonstrated module efficiencies of around 35.5%. That's much higher than First Solar's average module efficiency of 13.2% for 2013.

Foolish bottom line
The solar energy sector, together with the sapphire sector, are experiencing rapidly rising demand for their products. Although GT Advanced Technologies' shares have seen a big rally, mainly because of the rumored Apple deal, these shares can still rise further on favorable industry trends.

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Joseph Gacinga has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.