GT Advanced Bankruptcy Unlikely to Affect Apple Watch, But Sapphire for Future iPhones in Doubt

[Infinitewisdom]

My guess is GTA bet the farm to become a big player for Apple and it just didn't happen in the timeline they hoped for. That's not to say it's necessarily GTA's fault, as it could be Apple not being ready to purchase Sapphire in bulk for the Watch.

But Apple threw in a lot of money as well. Seems like a lot of money to throw at something so uncertain. Doesn't feel right - something happened that we clearly don't know about.

 

[marioguarneros]

Don't you people see whats going on here ?

It's all planned and fake.

Apple is going to swoop in and buy the company now that this artificial low stock price has been fabricated.

It's pretty obvious.

(And extremely unethical I might add)

They don't need to buy the company, they pretty much own GT's equipment in case they fail to pay the $578 million loan.

One way or another Apple is getting its money back.

From a previous article:

"Under the terms of the agreement between Apple and GT Advanced, GT Advanced is required to pay back the $578 million loan over the course of five years. If the loan is not paid back, Apple is entitled to the equipment that GT Advanced purchased."​

 

[Millah]

My guess is that Apple initially planned on using sapphire window glass on every Apple Watch models. But due to poor yield and higher than anticipated cost, decided to use it only on higher priced models.

No, Apple more than likely chose "ion-x glass" for the Sport model for weight and impact resistance. The sport model is meant to be as light as possible. Sapphire is heavier.

The Sport model is made from 7000 series aluminum. That isn't cheap stuff. Apples current products use 6000 series aluminum. 7000 aluminum is not a common choice of aluminum due to its added costs. But it is more durable. So Apple isn't cheaping out on the Sport model, they're using even higher quality materials for the purpose of the device, which is something to be light and durable. 7000 aluminum and ion-x glass fit that objective.

 

[nutmac]

No, Apple more than likely chose "ion-x glass" for the Sport model for weight and impact resistance. The sport model is meant to be as light as possible. Sapphire is heavier.

True but your argument does not change the fact that Apple Sports will be the lowest priced models ($349).

We do not yet know how much stainless models will cost, but if Gruber is right and it does end up closer to $999, I would not be surprised if 90% of the Apple Watch sold will be Sports, if not higher.

 

[Solomani]

Apple Watch = Colossal Failure.

Your prediction about Apple Watch = Colossal Failure.

 

[dstart]

If Apple had chosen to use Sapphire glass in the 6, would the edges still have been tapered off?

 

[macaron95]

knowing that the company is worth nothing now, it's probably time for Apple to take over it totally to ensure the supply of sapphire for its future devices including the watch before a rival such as Samsung tries to screw Apple

 

[ogun7]

MacDailyNews has links to some more information. Apple has the option to own the IP for GTAT's manufacturing process and can take ownership of the equipment in Mesa. Methinks something will be worked out. The CEO Gutierrez was selling off shares before the iPhone 6/#watch announcement, so who knows the drama behind the bankruptcy. Probably a means of keeping Apple from taking ownership of the Mesa equipment in light of the technical deficiencies in the initial yields.

 

[captain kaos]

GT was probably doing quite well before apple came along, (being pushed to upscale). And id say if the iphone was EVER going to get sapphire glass apple would've stepped in to bankroll GT.

 

[rctlr]

I have a $40.00 bill. Who's gonna hold the bet? Dinah-Moe Humm?

All they need is some discipline.

 

[macgabe]

What I'm not clear about about, and it doesn't seem to be directly addressed in the article, is whether GTAT is likely to continue operating through restructuring or not.

The implication in the article is that GTAT will not be supplying any sapphire. Is this because they will be in administration, or is it because Apple no longer wants to work with them?

Surely if Apple does want their sapphire for the watch, then it is in both GTAT's interest and Apple's to ensure continued production, even in administration. Don't know enough about bankruptcy proceedings to know if this is feasible, but General Motors seemed to continue churning out cars even when it went bankrupt.

As for Apple buying GTAT stock - that is not going to happen! They already own most of the debt (presumably senior debt) and the stockholders get nothing in a bankruptcy.

I heard Apple were now withholding payments to GTAT.

 

[Michaelgtrusa]

Severe Breakdown In Apple Relationship Cripples GT Advanced Technologies, Analysts Say http://www.forbes.com/sites/carlodo...wittersf&utm_source=twitter&utm_medium=social

 

[macgabe]

Severe Breakdown In Apple Relationship Cripples GT Advanced Technologies, Analysts Say http://www.forbes.com/sites/carlodo...wittersf&utm_source=twitter&utm_medium=social

Definitely starting to look like Apple broke off the relationship when quality was not as good as promised. Sounds like a good business decision to cut their losses, but a poor one to go with GTAT in the first place.

Interesting also that they only owe them $350 M now. That seems to have come down doesn't it?

 

[bmelson0412]

[url=http://cdn.macrumors.com/im/macrumorsthreadlogodarkd.png]Image[/url]


A new report from KGI Securities' Ming-Chi Kuo suggests that Apple's sapphire partner GT Advanced Technologies' recent filing for Chapter 11 bankruptcy protection will not affect its upcoming Apple Watch. However, he cautions that it does raise concerns about the possibility of future iPhones using sapphire displays.

Image​

... but it raises uncertainties on iPhone touch panel use of sapphire cover lens.

Kuo suggests that GT Advanced's ASF (advanced sapphire furnace) sapphire ingot isn't the only one it's considering to use for iPhone displays, though it is the company's preference due to the superior drop-test performance of GT Advanced's sapphire. And while Kuo believes that Apple still wants to use sapphire displays for iPhones, the bankruptcy of GT Advanced will likely result in bottlenecks in ASF sapphire production. Other sapphire ingot suppliers are unlikely to benefit, as they do not measure up to Apple's higher drop-test standards.

Apple had been widely expected to include sapphire display covers on some iPhone 6 models, but that development did not arrive. As Kuo notes, Apple still plans to use sapphire displays for Apple Watch, as it uses an ingot less than 6-inches and Apple's standards for drop-tests on the Watch are not as stringent as those for iPhone.

Article Link: GT Advanced Bankruptcy Unlikely to Affect Apple Watch, But Sapphire for Future iPhones in Doubt

If it's in apples plans, they will find another way of getting it! Even if they have to buy the company and make it themselves.

 

[derbladerunner]

Don't you people see whats going on here ?

It's all planned and fake.

Apple is going to swoop in and buy the company now that this artificial low stock price has been fabricated.

It's pretty obvious.

(And extremely unethical I might add)

Nothing has been fabricated. Chapter11 is not a funny or desirable outcome for either Apple or GT.

I wish people would cut the conspiracy theories.

Do you have experience in the stock market or regarding supplier contracts?

Here's what's actually happened:

http://www.bloombergview.com/articles/2014-10-06/apple-sapphire-supplier-breaks

Please read this article in detail.

GT had major problems supplying Apple (price, quality, volume or a combination thereof...we don't know the details yet) and Apple had to cancel the contract.

 

[Michaelgtrusa]

Definitely starting to look like Apple broke off the relationship when quality was not as good as promised. Sounds like a good business decision to cut their losses, but a poor one to go with GTAT in the first place.

Interesting also that they only owe them $350 M now. That seems to have come down doesn't it?

Those were American jobs that were needed.

 

[Tech198]

Thanks Apple for making this possible

Users need to take care of their devices, without a company backing them up by virtue they can swing their iPhone's round like a bungee cord..and expect a replacement on the spot afterwards.

u know when this happens when they start having issues, and Apple was with the iPhone 6 plus.

I only hope they learn something valuable from from this.

It's the only way users will learn unfortunately.

 

[Thunderhawks]

Don't you people see whats going on here ?

It's all planned and fake.

Apple is going to swoop in and buy the company now that this artificial low stock price has been fabricated.

It's pretty obvious.

(And extremely unethical I might add)

Apple would not need to do that at all.

They have enough $$$ to open up their own factory.

Why take on debt and complications, when they could just buy the machines and patents etc. and hire a few key people?

But, chapter 11 means GT hasn't totally given up. That only happens when it goes chapter 7

 

[wizard]

The articles in MacRumors of late have been illogical.

Take this article for example. They speculate at the top that GTAT couldn't meet durability requirements and then at the bottom go on about how strong the Sapphire is that GTATs furnaces produce.

I don't think anybody has a clue as to what actually caused Apple to give these guys the boot. As to where Apple will buy Sapphire in the future my impression is that they own the plant now. Apple could very well be in the sapphire production business even if they don't want to be.

 

[tbrand7]

Apple Watch = Colossal Failure.

Shut the hell up.

 

[wizard]

Those were American jobs that were needed.

Well needed or not, we have yet to hear anything at all about layoffs at the Arizona plant. If Apple did say screw it, then I would expect to see something in the news about the plant being shut down.

 

[PinkyMacGodess]

It seems odd that Apple would do that to a supplier, particularly one that was in the United States, but perhaps they got cold feet because the supplier is based in the US.

It would add cost to ship the panels to the manufacturing site. If true, this makes the whole 'Made in America' of the Mac Pro ring somewhat hollow...

Apparently there are limits to their patriotism in these days of runaway capitalism.

----------

Well needed or not, we have yet to hear anything at all about layoffs at the Arizona plant. If Apple did say screw it, then I would expect to see something in the news about the plant being shut down.

Often, 'the news' is the announcement of the bankruptcy...

 

[V_Man]

Based on nothing. Version 1 is going to have crappy battery life but the fun starts with versions 2/3 as it gets refined.

Our a lot thinner. Im not a watch person, but the watch is, imho, way too thick

 

[offcamber]

We need to remember that GT Advanced shipped the requested sapphire to China for final cut and polish.

"The issue that emerged is that the (Chinese) finishers were still having trouble creating the sapphire edges and yields were only at 25% or less".

http://www.iphonehacks.com/2014/09/iphone-6-lineup-missed-sapphire-glass-panels-weeks.html

 

[viewfly]

I really doubt that sapphire will ever be used for phone displays. It's natural reflection is too high.

You can see that in the Touch ID circle and compare it to the rest of the screen.

Apple watch sure. But a 5" screen? I doubt many would compromise glare for an increase in scratch protection for that.