As Apple moves to repurpose the Mesa, Arizona plant it sought to run with the now bankrupt GT Advanced Technology, Reuters is reporting Wednesday that GT's creditors aren't all too happy about the agreement.
Even though the iPhone maker is committed to keeping the Arizona facility alive despite the failed sapphire manufacturing agreement with GT, creditors in a bankruptcy court filing noted that GT “may have gotten too little” in the proposed settlement with Apple.
Apple plans to keep the sapphire production factory it built with GT Advanced in Mesa, Arizona, according to a report from Bloomberg. The outlet says the company has told officials that it's committed to bringing jobs and manufacturing to the area, despite GT's bankruptcy.
"They’ve indicated their commitment to us: They want to repurpose that building and use it again," Mesa City Manager Christopher Brady told Bloomberg. "Apple is focused on preserving jobs and promised to “work with state and local officials as we consider our next steps."
GT Advanced and Apple have reached a settlement that will allow the two companies to part ways amicably, reports The Wall Street Journal. Under the terms of the deal, GT will be paying Apple back for its $439 million loan by selling off its 2,000+ furnaces.
The news surfaced during GT Advanced's bankruptcy hearing this afternoon—two weeks ago, the sapphire-maker filed for Chapter 11 bankruptcy protection. Low cash flow was cited as a reason for the filing, but few details are known about the circumstances.
Apple partner GT Advanced has asked the court's permission to "wind down" operations at its manufacturing plant, reports Recode. The news comes less than a year after GT announced its high-profile deal to make sapphire for Apple, and just a few days after it filed for bankruptcy.
On Monday, the company shocked investors by announcing that it had filed for Chapter 11 bankruptcy protection. It's believed that GT spent most of its cash trying to produce sapphire display covers in time for the iPhone 6, but fell short of expectations and lost out on the order.
The deal between Apple and GT Advanced, which involved the former giving the latter a near-$600 million loan, fell apart over iPhone 6 displays, reports The Wall Street Journal. The outlet says Apple expected GT to produce sapphire for the displays of its new handsets, but it either wasn't tough enough or the yield was too low.
GT Advanced made the surprise announcement on Monday that it would be filing for Chapter 11 bankruptcy protection, and it had its first hearing this afternoon. We expected the proceeding to offer a better explanation of what happened, but GT was granted a secrecy motion that closed the hearing and sealed all documents.
In its first public comment Wednesday following a totally unepxected bankruptcy filing of its supplier GT Advanced Technology earlier this week, Apple now says it was taken aback by such turn of events while confirming its priority going forward will be preserving jobs at the Mesa, Arizona plant that GT had agreed to run on Apple's behalf.
Company spokesman Chris Gaither said in a written statement to Reuters, The Wall Street Journal and other major outlets that “we are focussed on preserving jobs in Arizona following GT's surprising decision and we will continue to work with state and local officials as we consider our next steps”.
GT Advanced's decision to file for Chapter 11 bankruptcy will not affect supplies of upcoming Apple Watch, says KGI Securities' Ming-Chi Kuo. In a note to investors this morning, the well-connected analyst says that because the device's screen is so small, Apple can turn to other suppliers for sapphire if need be.
Kuo notes that aside from GTAT, Apple is already working with a handful of other sapphire ingot (or cast) suppliers including Hansol and Harbin Aurora Optoelectronics. Because Watch drop-test requirements aren't as stringent as they are for smartphones, general sapphire manufacturing processes are adequate.
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.
GT Advanced Technologies, an Apple partner that runs the sophisticated manufacturing plant in Mesa, Arizona which churns out sapphire components for iOS devices, filed for Chapter 11 bankruptcy protection on Monday.
Filing for bankruptcy lets GT continue normal operations and meet its obligations until it reorganizes its business and negotiate new financing arrangements with its creditors.
As of September 29, 2014, the company has approximately $85 million of cash. The company owns and operate furnaces and related equipment on the behalf of Apple at the Mesa facility. Earlier this year, the iPhone maker said it will prepay $578 million for the equipment and related retooling. GT agreed to reimburse Apple for those funds over a period of five years beginning in 2015.
Apple and GT are continuing their work to strengthen sapphire, according to a new report from Wall Street Forensics. The site says the pair are hoping to reduce the material's "fundamental flaw of cracking," as well as improve its reflective properties.
On September 18th, the US Patent and Trademark Office published a patent application from Apple that covers new processes to both aid in the strengthening of sapphire, and cut manufacturing costs—a major point of contention with sapphire critics.
Apple announced last fall that it was opening up a new crystal sapphire production plant in Mesa, Arizona with partner GT Advanced Technologies. It's believed that the company is using the facility to make sapphire display covers for the upcoming iPhone 6.
Adding weight to the theory is a new report claiming that GT shipped small quantities of sapphire from Arizona to one of Apple’s partners in China this month. The news comes as manufacturers are believed to be ramping up production on the next-gen iPhone...
As rumored yesterday, looks like Apple is indeed planning an expansion at its Mesa, Arizona plant to boost sapphire output ahead of the next-generation iPhone production. According to a new report Friday morning, the company is looking to double the number of high-tech furnaces that make sapphire boules in bulk.
Whereas previous records claimed Apple and its partner GT Advanced would use about 950 furnaces at the site, sources are now saying the firms want to equip the facility with some 1,700 furnaces. That could mean bolstering of yields to increase the plant's output beyond an estimated 100 to 200 million sapphire displays per year.
Apple has poured a cool $576 million into the Mesa facility to secure an exclusive, multi-year output of sapphire products. It's widely believed Tim Cook & Co. have found a way of strengthening the next iPhone's screen by applying a thin layer of sapphire material on top of the handset's cover glass...