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 informs over 700 Mesa, Arizona employees that they will be laid off by December 15

Mesa-Arizona

 

Apple’s bankrupt former sapphire supplier is seeking to shut down its Mesa, Arizona plant and has informed 727 employees that they will be laid off between today and December 15th, according to AZ Central. The breakdown of the jobs being cut includes:

…524 production workers, 108 technical positions, 70 management jobs and 25 administrative jobs, according to the notice signed by Linda Luman, vice president of human resources for GT.

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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

WSJ: Apple deal with GT Advanced broke down over inability to provide iPhone 6 displays

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The Wall Street Journal has published new information about the breakdown of a deal between Apple and GT Advanced Technologies Inc. that led the latter to file for bankruptcy earlier this week. As was previously noted, Apple withheld a $139 million payment from the sapphire supplier, though the exact reasoning was unclear.

In a research note released yesterday, KGI confirmed that GTAT was Apple’s first choice for these displays because the company had created a process that provided superior drop test results. Now the Journal reports that the payment was withheld after GT Advanced failed to meet Apple’s requirements for the iPhone 6 display.

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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.

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KGI: GTAT bankruptcy unlikely to have impact on Apple Watch, future of sapphire iPhones uncertain

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KGI has published a new report clarifying that the recent announcement that Apple’s sapphire supplier had filed for bankruptcy will likely have no impact on the production of the comapny’s sapphire display-equipped wearable. According to KGI, GT was mainly contracted to create the sapphire crystal displays for the iPhone 6 and 6 Plus.

The reason Apple partnered with GT Advanced on the iPhone displays was related to the size of the screens. Because GT was the best equipped to manufacture a display the size of the new iPhone models. However, because the Apple Watch uses a smaller display, other companies are able to produce the covers as easily as GT. This is also why the Touch ID sensor and iPhone cameras, which both use a sapphire lens, will also be unaffected.

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More details on GT Advanced bankruptcy come to light: Apple withheld $139 million, GT CEO unloaded stock

Mesa-Arizona

Apple’s sapphire processing plant in Mesa, AZ

The Wall Street Journal has cast some more light on recent reports that Apple’s sapphire supplier had declared bankruptcy earlier this week. According to the Journal’s report, Apple withheld a payment of $139 million from GT Advanced, though currently there’s no indication of why this decision was made.

In another interesting revelation, the Journal also discovered that the CEO of GT Advanced, Thomas Gutierrez, unloaded all of his stock in the company in a sale just one day before the iPhone 6 was unveiled. The device was widely expected to use sapphire supplied by GT for its displays. GT Advanced had enjoyed a rising stock price that had nearly doubled since initial rumors of a collaboration on the iPhone 6 started swirling.

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Apple sapphire crystal supplier GT Advanced files for bankruptcy

sapphire

Apple sapphire supplier GT Advanced Tech has today released a statement announcing that it is filing for bankruptcy under Chapter 11. Filing for Chapter 11 means the company will be able to continue normal operations until it can resolve issues with creditors. As of September 28th, GTAT had $85 million in cash.

What implications this has on Apple’s upcoming Watch wearable, which uses a sapphire screen cover for both Apple Watch and Apple Watch Edition models, is currently unclear. Apple also uses sapphire from GTAT in its iPhone lineup, for the camera cover and the Touch ID sensor.

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Chinese rumor suggests Apple Watch to launch in February, sapphire to blame for low supply

Apple-Watch-Emojji

Chinese site Feng is reporting that Taiwanese media is saying that Apple wants to launch the smartwatch sometime in February. Most recently, The Information said Apple would be “lucky” to release the Apple Watch by Valentine’s Day. Officially, Apple has only quoted ‘early 2015′ as a launch window for the Apple Watch.

According to the report, Apple is supply constrained by the sapphire output of GTAT, which will mean the Apple Watch will hit in limited quantities. However, it is important to note that the low-end Apple Watch, the Apple Watch Sport, does not use sapphire at all, which will make that model easier to source. The higher end versions, Apple Watch and Apple Watch Edition are the SKU’s that will be impacted by sapphire shortages.

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The five reasons Apple never intended to use sapphire displays on the iPhone 6 – Time

sapphire

Time is reporting that, in contrast to the many rumors (and GTAT investor claims), Apple had never planned to use sapphire displays for the iPhone 6, and the company may not use it for future iPhones.

Some reports stated that up until a few weeks before the iPhone announcement, Apple was going to use sapphire but dropped it because of yield issues. This is not true. My sources tell me that sapphire was never targeted for the iPhone 6 or 6 Plus and its role in future iPhones hasn’t even been decided yet.

Speculation about sapphire displays for the iPhone 6 began when Apple built a major new manufacturing facility in Arizona last November. But Time‘s Tim Bajarin says that while the scratch-resistance of the material may have made it sound superficially appealing, there were no fewer than five reasons it would not have made sense to use the material for the iPhone 6 display …

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Analyst & GTAT investor claims all 5.5-inch iPhone 6 models get sapphire, some 4.7-inch models

sapphire

An investment note we’ve seen from analyst and GTAT investor Matt Margolis claims that all 5.5-inch models of the iPhone 6 will come with sapphire screens, while the 4.7-inch model will get either sapphire or Gorilla Glass depending on the specification.

According to sources close to Foxconn’s manufacturing operations the iPhone 6 will come built with sapphire cover screens in both sizes. These sources have also indicated that the 4.7” Phone 6 is being assembled in two varieties, a sapphire cover screen version and a version featuring Gorilla Glass. At this point I do not know the approximate mix between the two cover screen options on the 4.7” iPhone 6. My latest check on the 5.5” iPhone 6 indicates that all units of the device are expected to come protected by a sapphire cover screen at this point …

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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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