GT Advanced (furnaces, Pocketnow 001)

Apple withheld its final payment of $139 million it was due to make to GT Advanced, reports The Wall Street Journal, ahead of its decision to file for Chapter 11 bankruptcy. It’s not known why the company withheld the money, but it’s been speculated GT was not able to meet sapphire yield requirements outlined in its deal.

That deal involved Apple loaning GT Advanced a total of $578 million to help get a large sapphire factory in Arizona up and running. The two companies announced the partnership last fall, which many believed would result in the production of a large amount of sapphire display covers earmarked for Apple’s newest iPhone models.

Unsurprisingly, these rumors pumped up GT’s stock price and reputation for several months, but when Apple announced the iPhone 6 in September, without sapphire, the rejoicing came to a halt. GT Advanced had reportedly been burning through its cash—as much as $250 million in a single quarter—and had very little to show for it.

These issues, of course, culminated in the company’s announcement Monday that it would be filing for bankruptcy in an effort to reorganize its business. Shares of GT Advanced dropped some 90% on the news yesterday, and the situation grew even bleaker this morning with reports accusing GT CEO Tom Gutierrez of insider trading.

It’ll be interesting to see how things play out from here—will Apple cut its losses and move on, or does it still have plans to use large amounts of sapphire in future products (the Apple Watch will utilize a small sapphire screen)? GT Advanced’s first bankruptcy court hearing is scheduled to take place on October 9 in New Hampshire.

[The Wall Street Journal]

  • Rowan09

    I will be paying attention because if Apple actually uses them for the 6s and so on, their stock is very cheap right now.

    • Warmachine69

      Its only at 98.75$ per share which isint bad with there stock splits

      • Rowan09

        Not Apple GT Advance is only $1.42/share.

      • Justin Rowe

        That’s a brilliant idea….£1000 should be enough 🙂

      • Rowan09

        Exactly

    • Kaptivator

      I was thinking the same.

  • pauleebe

    How could Apple “move on”? This is a staple ingredient to the iWatch, and will surely find it’s way into the iPhone at some point.

    • Winski

      You think GT is the only manufacturer of synthetic sapphire on the planet ???

  • @dongiuj

    Apple saw this coming with its team of financial experts and will wait it out so that apple can snap up this company for peanuts enabling apple to still keep the massive price tag while reducing its production expenses. Sneaky sneaky.

  • Chetan

    Damn thats why we r still with gorilla chimpanzee easy to break glasses.. No dawn for the glasses of apes!!

    • R4

      Because sapphire breaks even easier. It’s strong but very fragile. which is why GT are spending so much money to figure out a way to make it possible for sapphire screens to be used on phones.

    • Exis

      Lol what? Gorilla Glass is better than Sapphire. Sapphire Glass is excellent against scratches but is very brittle and will probably break way more easily than Gorilla glass against bumps and drops.

      • Kaptivator

        This may be a dumb question…Can the 2 be combined (gorilla and sapphire)?

      • Kr00

        Sapphire glass is completely synthetic while gorilla glass is a chemical treatment of the glass itself.