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Apple says GTAT bankruptcy was a ‘surprising decision’ and will ‘focus on preserving jobs’

tim cook death stare

Apple has now officially commented on the startling announcement that sapphire supplier GTAT will file for bankruptcy. Like most observers, Apple was “surprised” by the move. Apple told the Wall Street Journal:

In its first comments since GT’s Chapter 11 filing Monday, Apple said, “We are focused 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.”

Wall Street Journal sources indicate that GTAT was forced into financial distress because Apple withheld the final tranche payment of its contract, totally $139 million. Apparently, the sapphire supplier did not meet the agreed terms so Apple exerted its contractual right to withdraw. From the statement, it seems that Apple did not expect the consequential ramification of bankruptcy, however.

Although Apple owns the land and the factory, it is run by GT Advanced Tech. Although Apple now confirms it is considering its “next steps”, there is no indication as to what that entails. One possibility is that Apple decides to take over full responsibility for the running of the plant, eliminating GTAT from the chain entirely. It could also buy the relevant elements and intellectual property as part of the bankruptcy. GTAT shares have fallen 90% since the news broke.

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Comments

  1. Taste_of_Apple - 9 years ago

    Definitely out of the blue.

  2. r (@relijahm) - 9 years ago

    now Apple can buy the company for cheap. Smart

    • Jon Anderson - 9 years ago

      They won’t have a very good relationship with suppliers in the future if they do that. It’ll look like they destroyed the company on purpose just to get it for the low low.

      • Fabio (@fabiopsousa) - 9 years ago

        OR this may be a strong alert for all suppliers that Apple will in fact execute all the aspects of their agreements in case they are not entirely meet by all third-party.

  3. I believe that apple has a plan for everything they do. even if it doesn’t seem right. and just take a second and think about what you would have done in there shoes.

  4. jerryfromcan - 9 years ago

    Maybe this was some giant game of chicken?
    Apple: smarten up or we will withhold
    GTAT: if you do, we will go chapter 11 and say it was your fault
    Apple: I doubt that
    GTAT: files
    Apple: oh crap…

  5. Question is If Apple paid 140 Million then could it save them from Bankruptcy
    http://www.afarber.com

Author

Avatar for Benjamin Mayo Benjamin Mayo

Benjamin develops iOS apps professionally and covers Apple news and rumors for 9to5Mac. Listen to Benjamin, every week, on the Happy Hour podcast. Check out his personal blog. Message Benjamin over email or Twitter.