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.
The many rumors suggesting that the iPhone 6 was going to feature a sapphire display were quelled when Apple announced both new iPhones without any mention of an extremely durable sapphire screen. Now, analyst Matt Margolis reports that Apple had every intention to ship its latest iPhone with sapphire glass, but production deadlines were missed by just "weeks."
As reported by MacRumors, the issue was not with Apple's Arizona-based sapphire supplier, GT Advanced Technologies, but rather with the iPhone 6's supply chain in China, which was unable to yield sufficient quantities of the displays produced with sapphire glass.
The repair experts over at uBreakiFix have posted a video comparing the durability of smartphone displays made of sapphire and Gorilla Glass. The comparison comes amidst ongoing speculation that the upcoming iPhone 6 may feature a sapphire screen.
Results from the test may surprise you, as although the sapphire display did prove to be significantly more scratch resistant than Gorilla Glass, it was also far more susceptible to impact breaks due to its stiffness and brittleness. Watch the full video below.
That sapphire has become the smartphone industry's latest new buzzword can be attributed to Apple. The Cupertino company has confirmed dropping north of $500 million for the procurement of cutting-edge furnaces and other sophisticated equipment needed for its new sapphire plant, the world's largest.
That facility is located in Mesa, Arizona and run on Apple's behalf by a company called GT Advanced Technologies.
Moreover, GT's scientists have created a process called Hyperion 4 Ion Implanter to help mass-produce sapphire at affordable prices. Now, it's been rumored for months that Apple, which holds a patent for ‘Sapphire Laminates,’ will protect the iPhone 6's screen with ultra-thin sheets made from the precious gemstone.
With sapphire's hardness being second only to diamond, such a device would feature a virtually unbreakable screen. And with an estimated 20 percent of all broken iPhones suffering from smashed displays, sapphire could protect your pricey investment in case of accidental drops.
Analysts caution that a high-end feature like a sapphire-strengthened screen could easily translate into a premium price. Which brings me to my question of the day: would you be willing to pay extra for an iPhone 6 with a sapphire screen?
A new report shared by French publication iGen reveals more information about the two iPhone 6 models Apple is set to announce next month. Based on details obtained from a source inside Foxconn, the report sheds more light about the weight, size, camera design, and battery of models N61 and N56, code names for the 4.7 and 5.5 inch iPhones respectively.