GT Advanced Technologies Blames Apple
Daniel Squiller, GT Advanced’s Chief Operating Officer has filed new revised documents at the court that has given everyone a little bit more insight into what went wrong and led to the downfall of the company.
The affidavit contains more information into the contractual obligations Apple forced upon GT Advanced in their agreement. The contract seemed to be more in favor of Apple. GT Advanced was disallowed from selling its sapphire to customers other than Apple. In addition, it seems Apple had an obscenely large amount of control over GT’s sapphire production as well. In example, GT Advanced was expected to fulfill any of Apple’s purchase orders at Apple’s demand, with severe penalties for failing to do so.
On top of that, Apple was in charge of the Mesa facility in Arizona that it bought just for GT Advanced. Apple was also, believe it or not, the cause of delays faced by the manufacturing company. Apple reportedly decided it was too expensive to provide backup power for the furnaces and on multiple occasions, power interruptions led to delays and loss of sapphire boules.
In the document, the COO also explains that the tools that Apple provided and that was not chosen by GT Advanced did not “meet their performance and reliability specifications.” The contractual obligations led in the end to GT Advanced’s inability to meet “cost and production targets” for reasons that it says were “beyond its control.” Issues in scaling its technology to create large 262kg sapphire boules to meet Apple’s specifications also led to the bankruptcy filing.
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.
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.