GT Advanced and Apple Reach Settlement
Apple and sapphire supplier GT Advanced Technologies announced that an agreement have been reached to effectively dissolve the partnership. GT Advanced is shutting down operations at the Mesa, Arizona plant owner by Apple. The company is also looking to sell off an estimated 2000 sapphire furnaces in the facility. The money received from the sales will help pay off the USD$439 million debt GT Advanced owes Apple.
The full agreement between the two parties has been published. The partnership has been effectively dissolved and the production agreement has come to an end. GT Advanced contractual ties have been lifted so that the company can proceed to sell sapphire to other parties in the future. Although GT Advanced and Apple are closing down their production agreement, the two will remain in contact. GT Advanced is still researching options to produce larger sapphire boules for Apple. The companies will be meeting each quarter to discuss the progress of this endeavor. There may be a possible collaboration if the companies decide to move things forward in this project.
GT Advanced is looking to wind down its sapphire production operation by the end of the year, wrapping up sapphire boule production currently underway and decommissioning the furnaces to prepare them for storage and resale. An estimate 800 employees will be losing their jobs as the company winds down.
Apple has finally given the public an official comment via Re/Code. According to the Cupertino company, GT’s sapphire manufacturing process simply wasn’t ready for production, and that a relationship in the future remains a possibility as the company’s sapphire production techniques improve.
“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. We remain committed to the city and we’re going to work with Mesa and Maricopa County to help the GT Advanced employees who will be impacted by this find new jobs.”
Apple is looking to use the Arizona plant for other projects. But this will not be possible until GT Advanced fully shuts down operations at the end of December. GT Advanced first filed for bankruptcy at the beginning of October, but the company was reportedly missing technical milestones as early as February, hinting at the trouble to come. Many have asked if this will be affecting Apple’s productions with its gadgets utilizing the sapphire glass. Sources say, no. There will be limited availability of products using the special glass while the rest of the batch will stick to the normal glass Apple has been using all this while.