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Apr 12, 2001
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GT Advanced and Apple have reached a deal that will see the two companies dissolving their partnership, according to documents submitted to the court earlier today, reports The Wall Street Journal. According to GT Advanced attorney Luc Despins, the agreement between the two companies marks an "amicable parting of the ways."

Under the terms of the deal, GT Advanced will sell off more than 2,000 sapphire furnaces, with some of the proceeds going to Apple as repayment for the $440 million loan the company gave GT to purchase the sapphire equipment.

gt_advanced_technologies_banner.jpg
Mr. Despins said the proposed settlement allows GT Advanced to try to sell the furnaces at the Mesa, Ariz. sapphire-manufacturing facility, and give the money to Apple, which financed the equipment. GT Advanced would surrender its claims against Apple, under the deal, and agree not to disparage the technology giant, Mr. Despins said.
There was some speculation that GT Advanced was aiming to force Apple into taking over the sapphire operation, but it appears that Apple is not interested as both parties seem to want out of the deal. With GT planning to sell off all of the furnaces, it is unclear whether Apple will be able to source enough sapphire from other suppliers in order to incorporate sapphire into the iPhone display in the future.

Apple and GT Advanced have also agreed to file a revised explanation for the company's bankruptcy filing, which will be provided to the court at a November 25 hearing, but the original court papers remain sealed. If approved, the settlement between GT Advanced and Apple will see original court papers stricken from the court record, keeping the details of what went wrong between the two companies quiet.

Rumors have suggested that the deal between GT Advanced and Apple began falling apart early on, with GT Advanced missing technical milestones as early as February. A failure to produce high-quality sapphire led Apple to withhold a final $139 million loan payment, which may have been the reason behind GT Advanced's Chapter 11 bankruptcy protection filing in early October.

GT Advanced will begin winding down operations at its sapphire plant in the near future, eliminating the jobs of more than 727 employees in the coming weeks. GT Advanced plans to prepare existing sapphire boules for sale, clean and sell furnaces, and then close the plant for good by December 31.

Article Link: Apple and GT Advanced Reach Deal to End Partnership, GT to Sell Furnaces to Pay Debt
 

avanpelt

macrumors 68030
Jun 2, 2010
2,954
3,873
I wonder if Apple will buy the furnaces and hire the employees from the Arizona plant? Seems like a no-brainer if they're all-in on sapphire.
 

jayducharme

macrumors 601
Jun 22, 2006
4,513
5,925
The thick of it
"SOME of the proceeds"? So Apple will lose money on this? Sounds like they got the short end of the stick.

It's interesting that Apple appears to be abandoning sapphire for now. Corning must be pleased. Maybe Samsung will buy the furnaces. :rolleyes:
 

avanpelt

macrumors 68030
Jun 2, 2010
2,954
3,873
Geez this escalated quickly.

No question about it. Oh, to get in a time machine, travel back 60 days and scoop MR about the fact that within less than two months, GTAT will be going through a bankruptcy restructuring, liquidating its assets, and closing the Arizona plant. Nobody would've believed it.
 

Risco

macrumors 68000
Jul 22, 2010
1,946
262
United Kingdom
I smell a rat here, the CEO talked a good talk. He was able to convince Apple to invest when in reality he knew they would never make the grade. Then just before iPhone 6 gets announced he dumps the shares and makes a lot of money....
 

vomhorizon

macrumors 6502a
Sep 24, 2013
952
68
Thats how business is. Apparently it was not revealed even through rumors that GT was having trouble meeting apple's requirements for the sapphire screens (apparently they were for the iPhone family). The deal went sour after that, and they simply did not have enough money to keep themselves afloat in Arizona. Apple held the payment back and protected its A$$ etc. In the end, if GT was truly the most well positioned company to deliver these things to Apple, their failure seems to suggest that what apple asked of them is going to take some time with the sapphire industry catching up. Since sapphire on watch faces is not very uncommon, i don't think the Apple watch would be much affected. Apple's plans to put sapphire screens on a phone however would be set back by a year or 2. I would actually not be surprised if Samsung jumps up here and works out a deal with some other supplier and does a Note family or a Galaxy S family phone with some sort of sapphire cover. One model somewhere with limited supply etc. Would be a nice PR boost for them, and their shareholders could use it.
 

luigiBoschin

macrumors member
Jul 13, 2010
52
32
"SOME of the proceeds"? So Apple will lose money on this? Sounds like they got the short end of the stick.

It's interesting that Apple appears to be abandoning sapphire for now. Corning must be pleased. Maybe Samsung will buy the furnaces. :rolleyes:
To burn the plastic copies
 

840quadra

Moderator
Staff member
Feb 1, 2005
9,253
5,966
Twin Cities Minnesota
Still curious to find out who did what to sour the milk. Was apple unrealistic in their expectations, Or was GTAT unrealistic in offering or singing up for such a difficult assignment?

I hear banter about Apple being a difficult client to work for, however it also doesn't do them any good to burn bridges or create animosity with current or potential suppliers

I wonder if Apple will buy the furnaces and hire the employees from the Arizona plant? Seems like a no-brainer if they're all-in on sapphire.

I am sure there is more to it than that. It is likely GT owns patents on the processes they use, which would prevent Apple from growing their own at any appreciable savings.
 

Mr Hands

macrumors regular
Oct 11, 2014
107
1
Liquidations are never fun.

My very first job ended with a liquidation sale. :( That was the first time I realized that it's all BS. I can't explain how it really made me feel. I'd never had to 'deal with' anything before that. I was just a kid.

Good luck to the employees there. Chances are not many knew they were about to lose their jobs.
 

KPOM

macrumors P6
Oct 23, 2010
18,004
7,851
"SOME of the proceeds"? So Apple will lose money on this? Sounds like they got the short end of the stick.

It's interesting that Apple appears to be abandoning sapphire for now. Corning must be pleased. Maybe Samsung will buy the furnaces. :rolleyes:

They'll still use it on the Watch. It's a common material on watches.

Apple took a chance and put $440 million at risk. They'll probably get most of it back.
 

HiRez

macrumors 603
Jan 6, 2004
6,250
2,576
Western US
Looks like it's going to be a very long time before we see sapphire-screened iPhones. Watches, Touch ID covers, and camera lens covers are different, much smaller and much less need to flex because of the small size. 4.7"-5.5" sapphire screens are going to require some new technology (maybe laminating sapphire with other materials) which it seems sadly is just not there yet.
 

jclo

Managing Editor
Staff member
Dec 7, 2012
1,968
4,296
I wonder if Apple will buy the furnaces and hire the employees from the Arizona plant? Seems like a no-brainer if they're all-in on sapphire.

This is a likely scenario.

Apple had the option of taking the furnaces, I believe, but has chosen to let GT Advanced sell them. This seems to suggest Apple has no desire to attempt to take over GT's sapphire operation.
 

prowlmedia

Suspended
Jan 26, 2010
1,589
813
London
They'll still use it on the Watch. It's a common material on watches.

Apple took a chance and put $440 million at risk. They'll probably get most of it back.

it's a lot easier to make small sizes and really, really hard to make sizer much bigger than a deck of cards... say a phone. Well get sufficient yield anyway.

Do feel for the employees and I bet the Cheating CEO has somewhere to hide.
 

TechGod

macrumors 68040
Feb 25, 2014
3,268
1,121
New Zealand
My very first job ended with a liquidation sale. :( That was the first time I realized that it's all BS. I can't explain how it really made me feel. I'd never had to 'deal with' anything before that. I was just a kid.

Good luck to the employees there. Chances are not many knew they were about to lose their jobs.

Yeah they probably didn't know what would happen to them. Very sad.
 
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