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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