“What’s Apple up to with that sapphire factory it’s building in Mesa, AZ?” Philip Elmer-DeWitt wonders for Fortune. “That’s one of the questions Bernstein’s Toni Sacconaghi (who covers Apple) and Alberto Moel (who covers Corning) set out to answer in a two-part report to clients issued Wednesday.”
“Their reports represent the deepest dive I’ve seen yet into sapphire, its unique properties (Moel calls it a ‘wonder material’), its industrial uses, and what promise it might hold for Apple,” P.E.D. reports. “The two analysts don’t have a definitive answer for that last part, except to demolish the theory that sapphire crystal will replace Corning’s (GLW) Gorilla Glass screen on the iPhone anytime soon, except perhaps as a laminate. (Why would Apple, which already owns the high-end smartphone market, replace a $3 screen with a $15 crystal that would probably shatter even more easily?)”
“Which makes their analysis of the deal even more interesting. Basically, Apple has paid $113 million for an empty factory and loaned GT $578 million to purchase, install and operate the world’s largest sapphire crystal-growing plant,” P.E.D. reports. “GT gets a huge bump in its income and a lot of press and prestige, but it’s assuming most of the risk. Apple is paying for the capacity, but it hasn’t promised to buy all — or even any — of the sapphire GT makes.”
Read more in the full article here.
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