GT Advanced Technologies Officially Announces Sapphire Settlement With Apple

Discussion in ' News Discussion' started by MacRumors, Oct 23, 2014.

  1. MacRumors macrumors bot


    Apr 12, 2001

    Earlier this week, it was revealed that Apple and its sapphire supplier GT Advanced Technologies had reached an agreement to effectively dissolve their partnership and allow GT to shut down operations at the Apple-owned sapphire production plant in Mesa, Arizona. Under the deal, GT will seek to sell off the over 2,000 sapphire furnaces currently installed at the facility, with the majority of the proceeds from those sales going to Apple to help repay $439 million in loans Apple made to help the operation get underway.

    GT has now officially announced the deal and published the full agreement, redacting only the amounts Apple will be paid per furnace sold.
    While the two companies are severing their production agreement, they will remain in contact as GT continues its research work focused on producing larger sapphire boules of over 165 kilograms. The two companies will meet at least quarterly to discuss GT's progress on that front, with potential collaboration still possible if both sides agree to move forward.

    GT filed for bankruptcy earlier this month as it became clear the company was spending over a million dollars per day to run the operation even as it was apparently unable to produce sapphire of the quality required by Apple. GT's troubles began as early as February as it was late in meeting milestones to qualify for Apple loan payments. Apple's continued withholding of the final $139 million payment may ultimately have resulted in GT deciding to pull the plug on the operation, even as Apple reportedly continued to try to help overcome GT's technical problems.

    GT 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. Roughly 650 employees at the Arizona plant have already been laid off, and the company will continue to lay off additional employees across its locations as it brings the production partnership with Apple to an end.

    (Image: GT's Advanced Sapphire Furnace)

    Article Link: GT Advanced Technologies Officially Announces Sapphire Settlement With Apple
  2. Kissaragi macrumors 68020

    Nov 16, 2006
  3. j.applewood macrumors member

    Sep 29, 2012
  4. Iconoclysm macrumors 68020


    May 13, 2010
    Washington, DC
    That is an absurd amount of money for a company producing virtually nothing. I'm still thinking back to that sales guy GT let go around April 2014 who claimed on his resume that he sold the sapphire idea to Apple. I'm guessing that's part of why he was let go, also guessing that he might want to remove that from his resume.
  5. foobarbaz macrumors 6502a

    Nov 29, 2007
    This is completely baffling.

    Apple gives that company half a billion dollars, gets nothing out of the partnership, and now both parties just walk away?

    I hope a few years from now we'll find out what really happened there.
  6. usersince86 macrumors 6502


    Oct 24, 2002
    Columbus, Ohio
    ... and the gorilla was very happy.

    The End. (?)
  7. needfx macrumors 68040


    Aug 10, 2010
    macrumors apparently
    chump change
  8. TWSS37 macrumors 65816

    Feb 4, 2011
    These conference calls between the two parties as it became clear that GT was unable to meet what was likely to be screens for the 6/6+ must have been crazy.
  9. bpcookson macrumors 6502


    Apr 6, 2012
    Why is it so baffling? When you make investments, they don't always pan out. You do what you can to recoup as much as possible and then you move on.

    What more do you expect to learn? I doubt there is much of interest left to be discussed at this point.
  10. jonnysods macrumors 603


    Sep 20, 2006
    There & Back Again
  11. PsykX macrumors 6502a

    Sep 16, 2006
    Woah, what a clown show, this story...

    It's sad for both partners, and in the end for consumers, but then again, when I saw videos about the properties of sapphire versus Gorilla Glass, sapphire wasn't all that appealing !
  12. stevers macrumors member

    Jun 13, 2009
    And that's what happens when you scroll to the bottom and click Accept without reading an agreement.
  13. azentropy macrumors 68020


    Jul 19, 2002
    Exactly. Apple has had internal projects that have failed as well were they have invested millions in R&D for something that didn't produce the desired results. This one just happened to involve a third party and be more public.
  14. 2457282 Suspended

    Dec 6, 2012
    Apple still holds it patents on how to adhere sapphire to glass. Maybe either GT or someone else will figure out how to produce the quantity needed by Apple so we can get thos screens working. But it sure looks like it won't be available for the 6s. Maybe the 7.
  15. Vol7ron macrumors 6502


    Jun 11, 2009
    Derry, NH
    I would speculate that to Apple, it was better to walk away empty handed then to have confidential agreements potentially released to the public. Especially if this sapphire was to be used on products yet to be announced
  16. proline macrumors 6502a

    Nov 18, 2012
    It looks like it was a technical dead end. That is to say that sapphire will not be suitable for phone screens anytime soon. What is puzzling is that if it were a technical issue, you'd think that would have been discovered early on before ordering thousands of furnaces.

    The other alternative is that it was a cost issue, but if that was the case you'd think Apple would have tried harder to keep GT alive in the hopes of bringing the cost down in the future.

    Yet another possibility is that corning was able to improve gorilla glass more than expected over the last few years, making sapphire less attractive than it was a couple years ago when this deal was getting rolling.
  17. hudson1 macrumors 6502

    Jun 12, 2012
    Why would they announce an agreement? If I'm not mistaken, the bankruptcy court is the party who has to agree to what Apple and all other creditors are to receive.
  18. BuffyzDead macrumors member


    Dec 30, 2008
    Aside from Everyones Opinion, which is All In The Past Now



    is going to make all the Sapphire Glass Apple needs today, for camera and Touch ID glass, Plus for some of the iWatch models, that will need it this spring???

  19. needfx macrumors 68040


    Aug 10, 2010
    macrumors apparently
    I'll do it for $899.999 per day

    am I hired?
  20. Keirasplace macrumors 601

    Aug 6, 2014
    Actually, we can't conclude it was a technical dead end. Or they wouldn't have invested that much in the first place. They undoubtably had made smaller volume test production runs that WERE satisfactory. We can only conclude that it could not be produced at the quality level they wanted at the VOLUME they wanted. Apple needs extraordinary amount of screens.
  21. bflowers macrumors 6502a

    Jul 19, 2006
    Those contracts would not have said what products needed the sapphire. There is no way that Apple, with it's secrecy directives, would have put "1 million sapphire screens per month for production of Apple Watch starting 4Q14." That would be ridiculous. At most it would have spelled out minimum sizes needed to make the front screen plates.
  22. Tycho24 Suspended


    Aug 29, 2014
    What's baffling is Apple is getting SO screwed. They are out of the money, they don't get exclusivity, they don't get interest, they don't get patents or rights or anything really.
    They helped a company that could have NEVER come up with the cash, create a technology that ONLY their competitors will benefit from... and for that, get NOTHING.
    I've literally never seen a company get a better deal than GT. The main players cash out stock before a 90% dip, they get an ENORMOUS investment in new tech and equipment, & do not have to do a damn thing in return!!!!!
    What is going on????
  23. jayducharme macrumors 68040


    Jun 22, 2006
    The thick of it
    I'm not sure how they can continue to collaborate in the future when basically all the workers have been laid off.
  24. Jakexb macrumors 6502a

    Mar 18, 2014
    Crazy. I wonder who they're selling the equipment to? I had the impression they were really the only game in town. Maybe someone like Corning is getting into the sapphire business?

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