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.
The company will begin a reorganization plan to try and resolve the balance sheet issues. CEO of GT Advanced said, in a statement, that the underlying business model is sound.
“GT has a strong and fundamentally sound underlying business,” said Tom Gutierrez, president and chief executive officer of GT. “Today’s filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet.
“We are convinced that the rehabilitative process of chapter 11 is the best way to reorganize, protect our company and provide a path to our future success. We remain committed to our roots in innovation and our diversification strategy. We plan to continue to operate as a technology leader across our core set of businesses.”
Many had expected sapphire to feature as part of the iPhone 6, but this did not materialise apparently due to low yields of the material. Details on underlying arrangements are private, but there is a possibility that Apple’s decision not to use sapphire in the new iPhones was one of the factors that caused the company to file for bankruptcy. Some investors were expecting GTAT to announce debt refinancing plans, but not to the extent of complete insolvency.
9to5Mac will follow up with more information as it arises.
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I guess now Apple could just buy them outright. No bankruptcy issues anymore… $85 million vs. $140 billion…yeah that could work.
This is the holding company, be careful how this plays out. Their subsidiarys have the Apple contract and can be funded by Apple or many others given the contract value. There’s a story here but its unclear what it really means to Apple if anything.
The pitfall of having a single customer who dictates when you make money.
I suppose this will be good for them in the long run as they refinance their obligations. Apple may be able to take full control at pennies on the dollar.
They also make solar panels.
I’ve asked Apple if they have discussed this with GT Technologies and if they do have any alternative material backup plans and will update if I hear back. http://goo.gl/pH3G7L
Maybe that’s their hope.
According to how I read their statement, it looks like they over-invested in something that isn’t giving them the returns they expected resulting in a cash flow shortfall in terms of paying their bills.
“Many had expected sapphire to feature as part of the iPhone 6, but this did not materialise apparently due to low yields of the material.”
Exactly how many times do I need to educate you 9-5 staff? It is not a suitable material for an iPhone screen and will never be used on an iPhone screen, with the remotely possible exception of being able to gas-bake a few microns of sapphire onto the top surface of some existing Gorilla-style glass. Sapphire is hard, but very brittle. It’s being used on the Apple Watch because it’s going to be a fairly thick chuck of sapphire for the screen, and will make for a noticeably heavier watch that the Sports variety that will not use Sapphire.
Do you even science bro?
GTAT owns a piece of technology they call “Hyperion”, where they can use ions to “slice” the sapphire to a single crystal thickness. This single crystalline surface is then bonded to a material, say like Gorilla Glass, and provide the scratch-resistance of Sapphire, while maintaining the flexability of Gorilla Glass, and taking full advantage of the Permativity of sapphire.
This is what Ivie said – point blank – and why the Apple watch can differentiate between a press and a touch.
But would that single crystal thickness still have the brittleness of the sapphire or would it take on the flexibility of the underlying glass?
Re-read hodar0’s comment again – “This single crystalline surface is then bonded to a material, say like Gorilla Glass, and provide the scratch-resistance of Sapphire, while maintaining the flexability of Gorilla Glass”.
“GTAT owns a piece of technology they call “Hyperion”, where they can use ions to “slice” the sapphire to a single crystal thickness.”
For radically small pieces, yes. Single-crystal thickness for something the size of an iPhone screen? No way. Not even remotely possible. They can coat it with a gas-bake though. Though I doubt that will even happen with how strong the iPhone 6 screens are. It’s become unnecessary.
Israel Anderson (@israelanderson) says: “Not even remotely possible.” – If only I had a nickel for every time some chucklehead used that sentence, or some variation on it, in my lifetime…
Apple is gonna wait until they “rott” and buy them out for pennies …
Yup, when people found out that neither versions of the iPhone 6 sport a sapphire screen, the company lost 13% of it’s value the day of the iPhone release. But after seeing videos showing that sapphire is incredibly difficult to scratch doesn’t mean it’s very resistant to impacts.