Go Back   MacRumors Forums > News and Article Discussion > MacRumors.com News Discussion

Reply
 
Thread Tools Search this Thread Display Modes
Old Oct 8, 2014, 04:35 PM   #1
MacRumors
macrumors bot
 
Join Date: Apr 2001
Apple Trying to Help GT Advanced Meet Milestones, Holds Off on Asking for Loan Repayment




Earlier today, an Apple representative told Reuters that the company was surprised by GT Advanced's decision to file for Chapter 11 bankruptcy on Monday, and The Wall Street Journal has now published some new information on the behind the scenes dealings between the two companies.

According to inside sources, Apple was caught off guard by GT's filing because it had been working with GT to make sure the latter company would be able to pay all of its debts. Apple, aware of GT's weak cash position, also reportedly held off on asking for loan repayments on the $439 million GT has received so far.

Quote:
On Wednesday, Apple called the bankruptcy filing "a surprising decision." A person familiar with the matter said Apple had been working with GT to keep it solvent. In addition, Apple hadn't demanded repayment of loans as it could have, based on GT's weak cash position, people familiar with the matter said.
As part of its loan agreement, Apple was entitled to ask GT Advanced for repayment if its cash holdings fell below $125 million, but Apple has opted not to demand repayment.

In addition to holding off on asking for loan repayment, Apple is also attempting to help GT qualify for the final $139 million payment that Apple has thus far withheld from the company. GT has not yet received the payment because it has reportedly failed to deliver on the technical milestones that it was contractually obligated to meet under the original terms of the $578 million loan that Apple provided for purchasing equipment.

Though Apple was widely rumored to be using GT Advanced sapphire for the iPhone 6 and 6 Plus displays, the company opted to stick with Gorilla Glass, leading to troubles for GT Advanced. Apple provided GT with a facility and a loan to buy equipment, but was not required to purchase GT's sapphire, which has eaten into GT's cash pile.

GT, meanwhile, has reportedly run into manufacturing issues that have impacted yield, explaining why Apple may have passed on sapphire screens for its new iPhones. GT is also subjected to exclusivity provisions limiting what it is able to sell to other companies.

Apple's upcoming Apple Watch will use sapphire on some models, but GT's bankruptcy is unlikely to impact the production of that device as Apple can use sapphire from other sources. The future of sapphire display covers for iPhones is less certain, however, as there are few other sources where Apple can obtain enough high-quality sapphire.

GT Advanced will have its first Chapter 11 bankruptcy court hearing tomorrow, where it is expected to divulge additional information on the reasons behind its bankruptcy filing.

Article Link: Apple Trying to Help GT Advanced Meet Milestones, Holds Off on Asking for Loan Repayment
MacRumors is offline   0 Reply With Quote
Old Oct 8, 2014, 04:37 PM   #2
farewelwilliams
macrumors 6502
 
Join Date: Jun 2014
apple watch...with gorilla glass!
farewelwilliams is offline   0 Reply With Quote
Old Oct 8, 2014, 04:38 PM   #3
yaxomoxay
macrumors 6502
 
Join Date: Mar 2010
You have no idea how much I would love to be in the position to say, "Well, let's give me the $500 millions later..."
__________________
Macbook Air 11", Macbook Pro 13", Macbook 13", iPhone5S, iPhone 5, iPod touch 5th Gen, iPad Mini, AppleTV 3, Mac Pro G4
yaxomoxay is offline   12 Reply With Quote
Old Oct 8, 2014, 04:38 PM   #4
Jakewilk
macrumors newbie
 
Join Date: Jul 2014
Yay! Good guy Apple
Jakewilk is offline   11 Reply With Quote
Old Oct 8, 2014, 04:39 PM   #5
koban4max
Banned
 
Join Date: Aug 2011
to GTA ceo...apple will grind you.
koban4max is offline   1 Reply With Quote
Old Oct 8, 2014, 04:39 PM   #6
swb1192
macrumors 6502
 
Join Date: Dec 2007
Quote:
Originally Posted by farewelwilliams View Post
apple watch...with gorilla glass!
From the article:

Quote:
Apple's upcoming Apple Watch will use sapphire on some models, but GT's bankruptcy is unlikely to impact the production of that device as Apple can use sapphire from other sources. The future of sapphire display covers for iPhones is less certain, however, as there are few other sources where Apple can obtain enough high-quality sapphire.
__________________
20 Apple Shirts. And Counting.
swb1192 is offline   1 Reply With Quote
Old Oct 8, 2014, 04:40 PM   #7
Dave Felix
macrumors 6502a
 
Dave Felix's Avatar
 
Join Date: Apr 2011
Location: Scranton, Pennsylvania
Quote:
Originally Posted by yaxomoxay View Post
You have no idea how much I would love to be in the position to say, "Well, let's give me the $500 millions later..."
Ha.. you and I both.
__________________
iPhone 6 Plus SG 64GB Jailbroken | MacBook Pro 2.66GHz 8GB
Dave Felix is offline   4 Reply With Quote
Old Oct 8, 2014, 04:40 PM   #8
VulchR
macrumors 68000
 
VulchR's Avatar
 
Join Date: Jun 2009
Location: Scotland
Perhaps 6S will be made of titanium, sapphire glass and have a rubberised housing.... LOL
__________________
My first was a Mac+. Now I own an iPhone with 3.5x the pixels, a colour display, WiFi, 512x the RAM, >1500x the data storage, and 100x the speed. And it fits in the palm of my hand.
VulchR is offline   2 Reply With Quote
Old Oct 8, 2014, 04:41 PM   #9
arian19
macrumors 6502
 
Join Date: Jul 2008
I love it when apple plays the good guy role.
arian19 is offline   4 Reply With Quote
Old Oct 8, 2014, 04:43 PM   #10
bbfc
macrumors 68020
 
bbfc's Avatar
 
Join Date: Oct 2011
Location: Gosforth, England
Quote:
Originally Posted by Jakewilk View Post
Yay! Good guy Apple
Exactly. This is how a company acts with Integrity. Well done Apple.
__________________
MacBook Pro (Early 2011), 2.3 GHz Intel Core i5, 4GB RAM, OS X Yosemite | iPhone 5 16GB White, iOS 8.1.1
bbfc is offline   7 Reply With Quote
Old Oct 8, 2014, 04:48 PM   #11
Amacfa
macrumors 6502
 
Join Date: May 2009
Good guy Apple.
Amacfa is offline   5 Reply With Quote
Old Oct 8, 2014, 04:49 PM   #12
springsup
macrumors 6502a
 
Join Date: Feb 2013
This was always what was going to happen - Apple still needs an exclusive, high-capacity sapphire partner and one that is heavily indebted to it and based in the USA is all good.

The option of demanding repayment if GT's cash was too low was never going to happen - GT would become insolvent, and as part of the insolvency proceedings Apple would get the sapphire furnaces which it doesn't want (due to secured loan).

I don't see it as good or bad of Apple. It's just pragmatic - why be very harsh on GT and drive them to the ground? Didn't Apple need them for something in the first place?
__________________
Sterling - the budget planner
Other apps only track your history; only Sterling helps you plan your future!
springsup is offline   7 Reply With Quote
Old Oct 8, 2014, 04:49 PM   #13
UnfetteredMind
macrumors 6502
 
Join Date: Jun 2012
Not sure why there were so many people who thought Apple would go through all this trouble to work with GT and then push them into bankruptcy :/

Will be interesting to read more details once they're available. Sounding like things just have not proceeded like GT thought they would in terms of development. Apple needs tremendous and consistent supply to be able to meet the demands of their customers. If they were actually thinking of using sapphire covers for the iPhone, they would need an ungodly amount of it. Meanwhile, Gorilla Glass is perfectly capable and ready to go as the fallback.

Last edited by UnfetteredMind; Oct 8, 2014 at 05:44 PM.
UnfetteredMind is offline   2 Reply With Quote
Old Oct 8, 2014, 04:49 PM   #14
mainstreetmark
macrumors 68020
 
mainstreetmark's Avatar
 
Join Date: May 2003
Location: Saint Augustine, FL
Somewhere, there's a man drinking whiskey alone in a dark room, staring blankly at the wall, wondering how it all went wrong.
__________________
iTunesRegistry.com <--don't bother, it's dead.
Podcast "Unplayed" Sync Status: Mini: 192, MBA: 124, iPhone: 212
mainstreetmark is offline   12 Reply With Quote
Old Oct 8, 2014, 04:50 PM   #15
macUser2007
macrumors 65816
 
Join Date: May 2007
Quote:
Originally Posted by bbfc View Post
Exactly. This is how a company acts with Integrity. Well done Apple.
LOL.

This is spin by Apple, not integrity. Apple did not pay the last installment of the pre-payment it seems to have agreed to make so that GT will build a plant for Apple's exclusive use.

Apple seems to have pushed GT into a corner and GT called Apple's bluff.

Other producers did not agree to Apple's terms, so now Apple can't go back to them, unless it makes concessions in its proposals. Since these concessions are likely to be more costly to Apple than continuing with the GT contract, Apple appears to be backpedaling now.

Apple seems to have also burned bridges with Corning, since it is using Gorilla glass from smaller suppliers in the iPhone 6.
macUser2007 is offline   10 Reply With Quote
Old Oct 8, 2014, 04:50 PM   #16
wikiverse
macrumors 6502
 
Join Date: Sep 2012
Quote:
Originally Posted by arian19 View Post
I love it when apple plays the good guy role.
Hold up. Apple are the reason GT are in this mess.

Apple: "we will loan you $500m for new equipment to make sapphire for out phones"

GT: "ok"

Apple: "you can't sell the sapphire to anyone else, only us"

GT: "ok, we will give you exclusive access because of the loan."

Apple: "we don't want your sapphire now, and you aren't allowed to sell it to anyone else."

GT: "WTF! How are we supposed to make money?"
wikiverse is offline   16 Reply With Quote
Old Oct 8, 2014, 04:50 PM   #17
mdelvecchio
macrumors 68020
 
Join Date: Sep 2010
so much for all the nutjob "theories" that apple was trying to screw them, shut them down, buy them, whatever.
mdelvecchio is offline   3 Reply With Quote
Old Oct 8, 2014, 04:51 PM   #18
alent1234
macrumors 603
 
Join Date: Jun 2009
if steve jobs was alive he would have had the GT execs killed for lying to him
alent1234 is offline   6 Reply With Quote
Old Oct 8, 2014, 04:51 PM   #19
Nicky G
macrumors 6502a
 
Join Date: Mar 2002
Location: Baltimore & NYC
Smells like this is a deliberate leak from Apple, to signal to other potential vendors "No, you're not going to bankrupt yourself doing business with us!" Which is a good message to send, and is probably indicative of the more "open" Tim Cook Apple.
__________________
MacBook Pro 15" Retina 2.6GHz i7 Ivy Bridge 16GB 512GB
iPhone 5s 64GB Gold AT&T
iPad Air 128GB Space Gray AT&T
iPod nano 7th Generation Black
Nicky G is offline   2 Reply With Quote
Old Oct 8, 2014, 04:52 PM   #20
alent1234
macrumors 603
 
Join Date: Jun 2009
Quote:
Originally Posted by mdelvecchio View Post
so much for all the nutjob "theories" that apple was trying to screw them, shut them down, buy them, whatever.
having a higher outstanding loan to apple makes it easier for apple to buy them in BK
alent1234 is offline   0 Reply With Quote
Old Oct 8, 2014, 04:55 PM   #21
Biedz1216
Banned
 
Join Date: Jun 2014
i have one basic question



what the HELL were they doing over there at GT?

so many apple fans are so quick to conspiracy theorize that they are basically the silver devil.
The complex is ironic and i guess (this new thing user CDM taught me) the struggle is real


::
Biedz1216 is offline   1 Reply With Quote
Old Oct 8, 2014, 04:56 PM   #22
Nozuka
macrumors 6502
 
Join Date: Jul 2012
Quote:
Originally Posted by wikiverse View Post
Hold up. Apple are the reason GT are in this mess.

Apple: "we will loan you $500m for new equipment to make sapphire for out phones"

GT: "ok"

Apple: "you can't sell the sapphire to anyone else, only us"

GT: "ok, we will give you exclusive access because of the loan."

Apple: "we don't want your sapphire now, and you aren't allowed to sell it to anyone else."

GT: "WTF! How are we supposed to make money?"

i guess you didnt read the article.
Nozuka is online now   12 Reply With Quote
Old Oct 8, 2014, 04:58 PM   #23
Squilly
macrumors 68020
 
Squilly's Avatar
 
Join Date: Nov 2012
Location: PA
Slightly off topic but with this news, anyone thinking it's a good time to invest in GT?
__________________
iPhone 6 16gb Space Gray Sprint
Squilly is offline   0 Reply With Quote
Old Oct 8, 2014, 04:58 PM   #24
dBeats
macrumors 6502
 
Join Date: Jun 2011
Quote:
Originally Posted by wikiverse View Post
Hold up. Apple are the reason GT are in this mess.

Apple: "we will loan you $500m for new equipment to make sapphire for out phones"

GT: "ok"

Apple: "you can't sell the sapphire to anyone else, only us"

GT: "ok, we will give you exclusive access because of the loan."

Apple: "we don't want your sapphire now, and you aren't allowed to sell it to anyone else."

GT: "WTF! How are we supposed to make money?"
No. GT's failure to deliver is the reason. Apple wants to use it, but needs a LOT of it. GT said they could do it and then didn't do it. No body grabbed GTs hand and made them sign anything.
dBeats is offline   13 Reply With Quote
Old Oct 8, 2014, 04:58 PM   #25
5aga
macrumors 6502
 
Join Date: Feb 2003
Location: US
I smell an acquisition
5aga is online now   0 Reply With Quote

Reply
MacRumors Forums > News and Article Discussion > MacRumors.com News Discussion

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Forum Jump

All times are GMT -5. The time now is 10:59 AM.

Mac Rumors | Mac | iPhone | iPhone Game Reviews | iPhone Apps

Mobile Version | Fixed | Fluid | Fluid HD
Copyright 2002-2013, MacRumors.com, LLC