Apple ponders future sapphire options, leaves door open for GT Advanced

“Apple Inc said on Thursday it is studying options for sapphire supply and might work again with GT Advanced Technologies Inc if the distressed supplier can reduce production costs for the scratch-resistant material,” Sayantani Ghosh reports for Reuters.

“On Thursday, Apple, which had backed the development with GT of a sapphire-manufacturing plant in Arizona, said it will keep an eye on GT’s advances, holding open the possibility of doing business with it in future,” Ghosh reports. “‘Apple put a lot of effort into an ambitious new sapphire manufacturing process with GTAT which is not ready for production. We’re going to continue evaluating GTAT’s progress on larger sapphire boule development, as well as consider other options for the facility,’ spokeswoman Kristin Huguet said, referring to raw cylinders of the material.”

“On Thursday, GT said it will continue ‘technical exchanges’ with Apple on making larger, next-generation sapphire boules, raw cylinders of the material that effectively increase capacity and lower the unit cost of production. GT said it would expand into boules of more than 165 kg, from the current 115 kg,” Ghosh reports. “On Thursday, GT Advanced also laid out the details of an agreement struck and described in court on Tuesday. Under that pact, GT will stop making sapphire materials for now and focus on supplying equipment to make sapphire crystals.”

Read more in the full article here.

Related articles:
Apple considering other options for Arizona sapphire facility, helping former GT Advanced employees find new jobs – October 23, 2014
GT Advanced announces settlement with Apple; to exit sapphire production – October 23, 2014
Apple and GT Advanced settlement: Ending the madness – October 22, 2014
GT Advanced, Apple ink deal for ‘amicable’ split-up – October 21, 2014
GT Advanced Technologies Inc. suspended by Nasdaq – October 17, 2014
GT Advanced confidentiality hearing with Apple delayed – October 16, 2014
GT Advanced bankruptcy judge challenges Apple’s penchant for secrecy – October 15, 2014
Apple, GT Advanced in secret session with bankruptcy judge – October 9, 2014
Apple supplier GT Advanced: Confidentiality pact rules out bankruptcy explanation – October 9, 2014
Apple ‘surprised’ by GT Advanced’s bankruptcy filing – October 8, 2014
Shattered sapphire dreams at GT Advanced – October 8, 2014
Apple’s withholding of $139 million payment led to GT Advanced bankruptcy filing – October 7, 2014
GT Advanced CEO sold 9,000 shares the day before Apple’s iPhone 6/Plus event – October 7, 2014
Law firms launch investigations into possible violations of federal securities laws by GT Advanced – October 7, 2014
Analyst: Apple may take possession of sapphire furnaces from GT Advanced – October 7, 2014
Apple to provide debtor in possession financing to GT Advanced? – October 7, 2014
Investors stunned over GT Advanced bankruptcy filing – October 7, 2014
GT Advanced files for chapter 11 bankruptcy court protection – October 6, 2014
Apple and GT Advanced rampup sapphire production in Mesa – August 11, 2014
GT Advanced expects sales of sapphire production tools to boost profit; shares surge – August 5, 2014
Apple and GT Advanced open second sapphire plant in Salem, Massachusetts – June 19, 2014
Apple patents method for embedding sapphire displays in LiquidMetal device chassis – May 27, 2014

25 Comments

    1. Sure seems that way.

      Still looks like fraud and lies from GTAT management to Apple, the public and shareholders to me. Only people who made money were GTAT managers and those “in-the-know” who cashed out just days before they filed.

      Someone should go to jail!

      1. That’s what you get with unfettered capitalism. It’s in the interest of all (most) parties to hide the realities and various corruptions when things go wrong or the little man and woman who suffer from these sort of events might realise how much they are being screwed for the sake of the greater good and the wealth of the owners/management. You take it or leave it sadly.

    1. I like the ring of “off world”… “if the distressed supplier can reduce production costs”. I’m guessing that “third” costs less than “off” when it comes to worlds. Too bad we don’t have Larry Niven’s Integral Trees.

  1. That is actually a fairly impressive display of brinksmanship from GT. The dude must have balls of steal. Either that or just no hope of meeting contractual obligations so he had nothing left to lose.

    1. It seems like Apple fell for the old snake oil gambit from a fast-talking dude. He probably kept telling Apple they were “this close” to having a viable sapphire display. Hey, you hope for the best and sometimes it comes up snake-eyes. That’s simply a gamble I’ve seen played out by others many times. That’s the whole purpose of a contract. I’m not saying GTAT set out to play a fraudulent role, but maybe along the way they found out there were going to be problems they couldn’t get around in time or the yields never improved. So many possibilities for failure.

  2. Why on earth would Apple do business with GTAT again.

    On the one hand, if they were having trouble, they could have come to Apple in the first place and told them what was going on. But to go through the trouble they did, and to make Apple look bad, suggests either Apple was not willing to work things out, or GTAT is an ass-hat not worthy of Apple’s business in the future, and it’s good this happened now, instead of in the middle of production.

    1. The won’t! In the articles GT said they are exiting the production business to sell only equipment. Therefore, another sapphire production company must be the ones that buy GT equipment to make sapphire for Apple.

      Maybe in China.

      Will Apple produce their own sapphire? Unlikely. So, Apple will never need to do business with GT again.

  3. making sapphire crystals that big is a bear and a half synthetic sapphire grows in concentric rings not like the natural crystal getting it optically correct on a slice big enough for a phone is really hit and miss, sapphire is hard to scratch but easy to chip (take it from a former master jeweler) materials are not only rated by hardness but also toughness (resistance to sloughing) Jade is the toughest diamond the hardest unfortunately the amorphous structure that makes jade so tough also makes it for the most part opaque i think this material for a phone cover was mistake going somewhere to happen and someone should have known better .

        1. My wife’s favorite is similar. She is a 3rd grade teacher and has a sign on her desk that teaches:

          Commas save lives.
          “Let’s eat, Grandma.”
          “Let’s eat Grandma.”

          My fave is a bit… ummm… less appropriate for 3rd graders.

          “John helped his uncle, Jack, off his horse.”
          You can do the other one. 🙂

  4. Maybe I’m being naive… and I probably am… but why doesn’t Apple just buy the whole damn operation, keep it running, and make some sapphire for all of their igadgets? Hire the engineers, managers, and the people who do the actual hands on manufacturing. No jobs lost. Apple gets what it needs. Everyone is happy. Problem solved.

    1. GTAT is in the business of making the machines to grow the boules. They normally sell this equipment to others that produce the crystals, and generally process them for use in mostly semiconductor manufacturing. I think this sapphire production factory was departure for them as much as Apple. It was a failed experiment. They should have worked a small pilot project first to prove the concept and properly gauge the output and costs, but it sounds like GT thought they could pull it off and sold Apple on the idea. (or Apple had the idea, I don’t know the genesis.)

      1. Agree, I don’t think they want to be in that business but I do see them possibly funding another company to run the operation with exclusive rights. It will depend on who owns the IP. If GTAT does then they are screwed because Apple isn’t going to pay again for something they already paid for.

  5. No matter who was at fault, too many employees have to pay the price and lose their jobs. I’m sure a few moved to the area thinking they’d have some steady work and then to find out they’re canned in under a year is just terrible. It doesn’t look like an area where there would be a lot of other job opportunities.

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