GTAT Stories February 19, 2015

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A new report claims that Apple is in talks with Japan Display to help finance an LCD display factory in Ishikawa next year. The exact details of the agreement are still in flux, but Apple is said to be considering an investment of somewhere around 200 billion yen (or just under $1.7 billion).

The factory would churn out the same types of low-temperature polycrystalline silicon displays that are currently used in the iPhone 6 and 6 Plus. Japanese news sources also say the factory could eventually be repurposed to build OLED panels like those found in the Apple Watch—and possibly in future iPhones. The factory’s output wouldn’t be exclusive to Apple’s devices, however, as the deal currently allows JDI to sell its wares to competitors.

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GTAT Stories February 2, 2015

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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. expand full story

GTAT Stories December 15, 2014

New settlement in GT Advanced bankruptcy case gives supplier more time to sell equipment

The Wall Street Journal reported today that Apple and GT Advanced Technologies have reached a settlement in their ongoing bankruptcy case. The settlement, which was approved by the courts earlier today, gives the sapphire supplier up to four years to sell its current stock of sapphire production equipment in order to repay Apple.

The two companies previously went head-to-head over who should be considered responsible for the complete failure of the partnership, with GT blaming Apple for making demands the company couldn’t meet while blocking any other contracts GT may have wanted to accept. Apple, on the other hand, blames GT for accepting a contract and then failing to provide the agreed-upon product.

GTAT Stories December 2, 2014

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Following a report late last month that creditors of bankrupt sapphire supplier GT Advanced Technologies won a court order to get a look at sensitive Apple documents, now GT’s creditors are requesting a deposition of Apple executive Jeff Williams. The Wall Street Journal reports: expand full story

GTAT Stories November 19, 2014

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Photo via WSJ

The Wall Street Journal has revealed key details of the failed deal between Apple and sapphire supplier GT Advanced Technologies that show why the agreement collapsed and how GT managed to run itself into bankruptcy while trying to meet Apple’s standards.

A previous report from the Journal revealed that GTAT had been unable to provide the iPhone 6 displays it had promised Apple, but now we have even more information on why that demand was so hard to meet.

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GTAT Stories October 29, 2014

Mesa-Arizona

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: expand full story

GTAT Stories October 23, 2014

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. expand full story

As expected, Apple’s clean break from GT Advanced is now official

Apple’s clean-break settlement with GT Advanced is now official, two days after lawyers for the bankrupt sapphire manufacturer reported that agreement had been reached. In a press release, the company said that the company was being given up to four years interest-free to repay the $439M owed to Apple.

GT will be released from all exclusivity obligations under its various agreements with Apple. GT will retain ownership of all production, ancillary and inventory assets located in Mesa and Apple is provided with a mechanism for recovering its $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF® sales. The agreement provides for a mutual release of any and all claims by both parties. As a result of the agreed upon terms, GT retains control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion™, without restrictions.

The company is exiting the sapphire production business and will repay Apple from the proceeds of selling its furnaces, the four-year timeframe likely agreed in order to allow GT Advanced to achieve the best price.

GTAT said that it will continue “technical exchange” with Apple to help develop future production processes, but will limit its future involvement in sapphire to making production equipment for other companies.

GTAT Stories October 14, 2014

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Apple is seeking to keep its involvement in GT Advanced’s Chapter 11 bankruptcy filing secret as it reportedly asked courts to file its objections in the case under seal. Bloomberg reports that Apple has requested permission to keep its comments in the case secret to avoid disclosing “confidential research, development, or commercial information regarding Apple’s business processes.” expand full story

GTAT Stories October 13, 2014

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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 …  expand full story

GTAT Stories October 8, 2014

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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GTAT Stories August 21, 2014

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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GTAT Stories March 14, 2014

Digitimes likely way off the mark with sapphire production estimates

A report by Digitimes is circulating today which says that Apple partner GT Advanced Technologies can only supply around 9-16% of sapphire supply for Apple’s next generation iPhone due for later in the year. The implication being that Apple would have to rely on external suppliers to make up the difference.

However, this estimate is based off GT’s apparent forecast of between $188 and $348 million from sapphire sales. As $GTAT investor and analyst Matt Margolis notes on his blog, the company has never broken down their revenue figures for sapphire so it’s unclear where Digitimes has sourced this number from.

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