Apple invests $2b in failed GTAT sapphire plant to create global command center

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Following the October surprise bankruptcy filed by GT Advanced Technologies—a key sapphire supplier for the iPhone—Apple today announced plans to invest $2 billion over the next 30 years in the failed plant. The Mesa, Arizona-located plant will become the central command center for its various data centers around the globe.

“We’re proud to continue investing in the U.S. with a new data center in Arizona, which will serve as a command center for our global networks,” Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, wrote in an e-mailed statement on Monday. “This multibillion-dollar project is one of the largest investments we’ve ever made.”

Shortly after the bankruptcy announcement from GT Advanced Technologies, Apple described the decision as surprising while adding that the company would focus on job preservation. Read more

GT Advanced COO discusses Apple’s sapphire fallout, here are the interesting bits

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While lawyers for bankrupt sapphire supplier GT Advanced confirmed previously that it had reached an agreement to repay Apple approximately $439 million, many details regarding what exactly went wrong in the partnership had not been disclosed publicly. Today we get what might be the clearest explanation yet of what happened between the two companies leading up to GTAT filing for Chapter 11 bankruptcy last month.  In a declaration filed by COO of GT Advanced Daniel Squiller with the courts yesterday (via Fortune), the company outlines previously sealed info regarding its deal with Apple and terms of the deal that lead to GT’s bankruptcy filing.

When GTAT initially entered into negotiations to sell sapphire furnaces to Apple, it had no sense that, having borrowed hundreds of millions of dollars to pay for the components of more than 2,036 sapphire furnaces, it would end up being unable to meet its cost and production targets for reasons that it believes were beyond its control as well as unforeseen difficulties in scaling its technology to 262kg boules to meet evolving product specifications.

While noting that the deal was “an ambitious transaction for the production of sapphire in quantities, size and quality never before achieved,” the document reveals a number of strict terms Apple imposed in the deal that the company describes as limiting its ability to achieve Apple’s requirements for sapphire production. Here’s a few of the more interesting bits: Read more

Apple will continue evaluating GTAT’s sapphire production progress, could repurpose Mesa facility

Mesa-Arizona

Following news this week that Apple had reached at a settlement with bankrupt sapphire manufacturer GT Advanced, today the company has responded to the situation in a comment to Recode. While GT previously said it would wind down sapphire production operations at its Mesa, Arizona plant and sell furnaces to repay the $439M owed to Apple, today Apple hinted it might have its own plans for the facility. Read more

GT Advanced court filings reveal $50M penalty Apple imposes for leaking product information

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Not much is known about Apple’s deals with its suppliers, but court filings by former sapphire supplier GT Advanced reveal that the contract included a $50M penalty for any leak of Apple product information, reports the Financial Times.

While the amount of the penalty clause may vary according to the size of the supplier, it seems likely that a substantial leak penalty is a standard condition of supplying product components to Apple – though the number of leaks over the iPhone 6 suggests that such penalties offer limited protection.

Contracts between Apple and its suppliers will undoubtedly be subject to strict non-disclosure agreements, but lawyers for GT Advanced are asking the court to allow details to be made public …  Read more

Apple files to kick off expanded, potentially ‘jewelry’-classified sapphire production this month

Mesa-Arizona

Apple and State of Arizona filings have come to light today that indicate Apple is rapidly expanding its Mesa, Arizona operations and GT-Advanced sapphire crystal production. PTT Research Senior Analyst and GTAT investor Matt Margolis shared the new documents from his latest research with 9to5Mac. The first interesting piece of the filings is a letter from Apple’s Director of Global Trade Compliance James J. Patton from early July to the U.S Department of Commerce:

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WSJ says Apple considering using sapphire displays in “more-expensive” iPhone models

A new report filed by The Wall Street Journal today is the latest to claim that Apple’s next generation of iPhones will sport sapphire displays. In addition to commentary from analysts over how the more expensive material could impact costs for Apple, the WSJ report includes the following tidbit:

Apple is considering using sapphire screens in more-expensive models of the two new, larger iPhones it plans to debut this fall, if it can get enough of the material, people familiar with the matter say.

Two things are notable in mention above. First, the WSJ mentions “two new, larger iPhones” as reports continue to describe both a 4.7-inch and 5.5-inch model to be introduced with the latter size possibly available after the former. Next, the WSJ describes sapphire displays as possibly only being available on “more-expensive models” of the new iPhones.

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Apple profiled for renewable energy in sapphire factory, says supply-chain is now the focus

After showing more journalists around its solar-powered North Carolina data center (where it is building a third solar farm), Apple says that its new focus for renewable energy is its supply chain. The Guardian reports that the sapphire factory in Arizona forms part of this initiative.

The company is also moving to install solar and geothermal power at a plant in Mesa, Arizona that has been manufacturing sapphire glass. Apple would not directly comment on the Arizona factory but the state’s governor, Jan Brewer, has publicly praised the company’s decision to relocate there and to use solar and geothermal in manufacturing.

Apple’s VP of environmental initiatives Lisa Jackson said that the company is conscious that its supply chain cannot claim the same green credentials as Apple itself …  Read more

Video reportedly shows iPhone 6’s flexible sapphire screen cover

With a long list of leaks in recent months showing mock ups of the 4.7-inch and 5.5-inch iPhones expected for release this fall, today we get a look at what is reportedly our first at the flexibility of the iPhone 6’s new sapphire cover glass. There’s not much information surrounding this leak or confirmation that what we’re looking at is the real deal, but the sapphire material is indeed something Apple has ramped up production of in recent months at its new Arizona plantRead more

Apple sapphire supplier’s projected 2H14 revenues likely indicate fall iPhone launch

Apple’s new sapphire crystal component producer GT-Advanced announced its Q4 2013 earnings results yesterday, and in addition to talking about the past quarter, the company shared some details about its future and its well-publicized partnership with Apple.

We previously indicated, based on research into publicly available shipping documents, that we expect Apple and GT-Advanced to be developing sapphire crystal displays for a future iPhone model. The companies are likely to be able to produce over 100 million displays this year…

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Taiwanese report reiterates 4.7 inch and 5.6 inch iPhones incoming, claims larger model will not use iPhone branding

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A report published in Taiwan’s Economic Daily News, via Mac Otakara, reiterates the flurry of previous reporting that Apple will release two new iPhones this year with larger displays, around 4.7 and 5.6 inches respectively. This has been reported countless times in the past by multiple sources. It also says that Apple is targeting a release in the third-quarter, again unsurprising at this point.

However, the report goes onto say that only the larger of these two phones will feature sapphire-glass. According to this sketchy report, the 4.7 inch model will continue to use Corning’s Gorilla Glass like the current iPhone 5s and 5c.

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Next iPhone reportedly sports a larger screen and sapphire crystal display

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Apple is preparing to release not one, but two new versions of the iPhone in September, according to the South China Morning Post. Each version will ship with a larger display than the iPhone 5s, coming in at a whopping 4.7″ and 5.5″, respectively. The displays are said to have a pixel density of 441ppi, much higher than the current 326ppi found in the iPhone 5 and later.

The report also states that both displays will be made from sapphire crystal, which fits with recent reports that Apple is planning to have its latest sapphire plant in Mesa, AZ operational in February for a “critical” product component. The displays will also be flat, not curved, the Post says.

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