You'd never agree to a multi-part loan where you have to meet certain (specified) milestones to receive later payments?
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GT Advanced Saw Production Troubles as Early as February
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You'd never agree to a multi-part loan where you have to meet certain (specified) milestones to receive later payments?
You'd never agree to a multi-part loan where you have to meet certain (specified) milestones to receive later payments?
this is the heart of the issue. Somebody was making this stuff in small batches and the material performance of the sapphire was adequate and to Apple, it seemed desirable at the time. The properties of the sapphire at high volume or % usable-yield can certainly change when producing enough volume for 50-70 million phones a quarter though. And that's where things fell apart, I think (I am talking out my
though, this is just a guess)And what exactly will they do with all that equipment? Sell it to Samsung?
The reason Apple went to GT is they have no interest in learning how to make Sapphire. Sounds like Apple got the bad end of the deal on this one.
Man, you need to chill out.
First you'll have to point to the terms in the agreement or anywhere where it has been sourced that Apple owns the equipment now. To be clear I'm not taking a position on it, simply pointing out that a LOT of what we know so far is not sourced and can't know the details until they come out.
If I give you $400 dollars to get a coffee and you come back with chocolate which I told you I wouldn't accept - how have I not taken any risk? I'm out $400 dollars and interest and for relying on you instead of another to accomplish the task.
Did you read the article...yes Apple knew there were issues back in February. However it looks like GT downplayed the magnitude - note how immediately after management start selling off - possible a clue that they themselves did not believe things would not work out. However they kept communicating to Apple in such a way as they were still expecting yet another payment all the way in October. If management weren't confident back in February, why did they still expect another payout 8 months later? Why not communicate more clearly to Apple how bad the situation was?
Other than that, I don't know what you're so bent out of shape about.
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Apple didn't just hand over $400 million dollar for free. It is loan, so it is not free money being gave away. Would banks gonna do the same for the loan? Would bank gonna set a bar for a loan?
Apple is might risking loss for certain part of the money, that is the nature of the loan. But the whole thing is more favourable to Apple and less favourable for the borrower. Apple is mean, but the management is stupid.
You'd never agree to a multi-part loan where you have to meet certain (specified) milestones to receive later payments?
Let it go, there are a lot of delusional folks here. In what way is it extraordinary that someone is not under obligation to buy something that isn't what they ordered.
Assuming that Apple believes that sapphire would be a significant product differentiator, bankruptcy is an effective way for GT to shed obligations to make itself a more attractive acquisition.
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Yup. Another common example is commercial construction loans that dole out the money based on milestones such as lease sales.
Foxxcon, Samsung, Nvidia, TSMC, Sony, Omnivision, Liquid Metal, Corning, Intel, Kyocera, LG, Micron, Molex, Panasonic, Pegatron, Philips, Sandisk, Sharp, TDK, Texas Instruments, Toshiba, Western Digital, AMD, and Broadcom just to name a few don't seem to have a problem with Apple's stringent requirements.
These bozos at GT Advanced clearly bit off more than they could chew and rather than step up and ask for help or get things right they choose to unload their stock and cash in....then blame Apple. Losers!!!
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Did the above companies got loan from Apple? Do they have financial obligations to Apple? Do they only able to sell products to Apple?
What I meant was, if they were able to provide more than enough sapphire for themselves, why not sell the extra to other manufacturers? Otherwise, you are just sitting on an excess of goods. Sure, Apple could use them for future handsets, but if they already have it planned out, then extra means extra.
Thanks for being so open minded.
What deal? You have no information on the terms of the deal. None of the terms have been made public. There were clearly technical failures to produce the sapphire Apple was paying the company to produce. Blowing smoke you are.
Oh and they are saying Apple's so oppressive and these jerks have been purposely dumping stock to line their pockets. Oh, the humanity of it all.
Apple tries to give a company tons of money to build products, the stock goes up, these guys dump stock, and then they can't fulfill their obligation because they couldn't get the product out the door and they are blaming Apple? Scum, PURE scum.
Apple tries to give a company tons of money to build products, the stock goes up, these guys dump stock, and then they can't fulfill their obligation because they couldn't get the product out the door and they are blaming Apple? Scum, PURE scum.
... or they could just NOT make more than they're going to need? The extra money from selling the extra would be less important to Apple than having sapphire be THEIR thing only. Apple doesn't need the extra cash. They would rather keep that uniqueness of being the only ones with sapphire.
Apple took all the risk. GTAT made the sapphire equipment that went into the AZ plant. Apple coughed up the money for the plant and the equipment. What we are seeing is GT's equipment could not do what was promised to Apple. The equipment is junk to Apple. My guess is Apple is going to have to eat the cost, and go to China or South Korea to build the equipment they need. Clearly, US companies can't do it.
And let's not forget the lies the CEO and CFO perpetrated when they released the Q2 results back on August 4, 2014, even though they likely knew months ahead that the company was in trouble.
http://investor.gtat.com/releasedetail.cfm?ReleaseID=864032
Do you seriously think that's how business works? Do you think a lawyer will draw up a contract from a supplier where the supplier can **** up and completely derail a launch without repercussions? And yes many suppliers also do need to meet specifications before orders go through and yes - contracts can be signed where a supplier will have to buy back or pay for warranties if there are defects. These a ****ing financial issues.
It's certainly a shame if it turns out this guy was doing a pump and dump with his own company, but I don't think it'll affect Apple's plans for domestic manufacturing. But it may compel Apple to build and run its own operations instead of farming things out to small companies like this.
There are a few other handsets already on the market that use sapphire screens. Apple would not have been the only one. They would have been the only mainstream handset with it, but let's not act like Apple would have broken new ground with sapphire screen tech.
I guess you don't know how these kind of business relationships work. Apple certainly invests in every e.g. Foxconn production capacity. So yes most of the mentioned companies first receive a loan, investment or upfront payment to produce or deliver products for Apple. Especially in the quantities that Apple requires this is normal business practice.
Apple buys a plant that either couldn't produce adequate quantities of sapphire or, as some rumors suggest, produce machinable sapphire.
In the "iPhone 6 Front Panel Survives Limited Bending Test" from July, MR forum member kdarling posted a mention of the difficulties of cutting sapphire into rounded corner phone panels.How would ownership suddenly make Apple experts at manufacturing? Not their bailiwick. Hire the GT people currently working there? These are the same people who couldn't get it done the first time.
I know this comment was made in jest but it makes infinitely more sense than an Apple purchase. At least Corning has manufacturing experience.
The only thing that is factually known is that Apple invested in and bought equipment for this company which it apparently still owns.
Everything else is under a non-disclosure agreement which the court will eventually probably throw out.
GT Advanced has made no public statements except for the court filings.
And the only thing Apple has said is that it wants to protect US jobs and was "surprised."
If you really think Apple was SURPRISED, I mean seriously, that would mean Tim Cook is a complete idiot, which I seriously doubt.
The GTA plant staffed up and idealistically churned out a bunch of worthless sapphire that could not even be sold to other companies. The sad part is that sapphire is not even needed, nor as strong as Gorilla Glass for the iPhone.