Apple to Continue Evaluating GT's Sapphire Production Progress, Looking for New Uses for Arizona Plant

[MacRumors]

Earlier today, GT Advanced Technologies officially announced its settlement with Apple, which will see the two companies dissolving their partnership, ending their production agreement, and eliminating contractual ties that kept GT from selling its sapphire to other parties.

Under the agreement, GT Advanced will be selling off its remaining sapphire, along with 2,000 sapphire furnaces, with much of the proceeds going to Apple to repay the $439 million loan it provided to get the operation underway.

Apple has now commented on the settlement with GT Advanced, telling Re/code that GT's sapphire manufacturing process simply wasn't ready for production, and that a relationship in the future remains a possibility as the company's sapphire production techniques improve. GT will continue research work focused on creating sapphire boules over 165 kilograms.

Apple also says that it is going to look for other ways to use the Mesa, Arizona facility that it purchased for GT Advanced, which will be unused after GT fully shuts down operations at the end of December

"Apple put a lot of effort into an ambitious new sapphire manufacturing process with GTAT which is not ready for production. We're going to continue evaluating GTAT's progress on larger sapphire boule development, as well as consider other options for the facility. We remain committed to the city and we're going to work with Mesa and Maricopa County to help the GT Advanced employees who will be impacted by this find new jobs."

GT Advanced first filed for bankruptcy at the beginning of October, but the company was reportedly missing technical milestones as early as February, hinting at the trouble to come. While Apple was widely expected to use sapphire from GT Advanced for the iPhone 6 and 6 Plus displays, the company opted to stick with Corning's Gorilla Glass after it became apparent GT would not be able to produce sapphire of the quality that Apple required.

Approximately 650 employees at the Mesa, Arizona sapphire plant have already been laid off, and a limited number of employees will remain employed until the end of the year in order to help GT Advanced wind down production at the factory, finishing the sapphire boules that are currently growing and shutting down and cleaning furnaces for storage and sale.

Article Link: Apple to Continue Evaluating GT's Sapphire Production Progress, Looking for New Uses for Arizona Plant

 

[OatmealRocks]

Who will be the next USA Manufacturer to take this on? Come on Apple giving an opportunity to bring the jobs back from oversea suppliers! Don't screw it up (again)!!

 

[Santabean2000]

Lets hope they can keep people in their jobs. And make something cool while they're at it.

 

[farewelwilliams]

cool, bought 50,000 shares at 0.4ish

 

[Dekema2]

What a mess, all because of one guy's selfish actions.

 

[OatmealRocks]

Lets hope they can keep people in their jobs. And make something cool while they're at it.

I know. Thank shady GTAT management for that. At least the execs got their payout from stocks!

 

[decimortis]

Fool me once...

D.

 

[Klae17]

US manufacturing continues to be a joke. First the Mac Pro delays and then this. Anyone who doesn't acknowledge this is blinded.

 

[OatmealRocks]

US manufacturing continues to be a joke. First the Mac Pro delays and then this. Anyone who doesn't acknowledge this is blinded.

It is a joke to people thinking US can make the iPhone or some other large volume product. However if this is a goal than Apple needs to tread even slower than before as GTAT is a perfect example. Imagine building a complete product with multiple US manufacturers? And depending on them. Crazy. Someone else pointed out it would take a decade and I tend to agree that it would take that long to transition manufacturing something like an iPhone to be completely built in the US. There are just no manufacturing plants at such scale in the US. They would literally have to build a new town for this endeavor and also get the people to move their for this type of jobs. Just imagine the costs, the politics involved.

I think small scale is the best we will get for US manufacturing. Mac Pro, TB Displays.. peripherals maybe Mac Mini is about it.

 

[scottsjack]

Another use for the plant.

Easy answer;

Build Mac minis there. Make them single-core with a maximum 4GB RAM but sexy and thin with a back-lit sapphire Apple logo.

Apple wins on multiple levels with the above plan. It gets to further degrade another product and Jony gets to introduce another stupidly thin product.

 

[the8thark]

Who will be the next USA Manufacturer to take this on? Come on Apple giving an opportunity to bring the jobs back from oversea suppliers!

Jobs brought more manufacturing jobs to the USA.

Job: Zero manufacturing jobs brought to the USA.
Cook: Minus 700 (or so) jobs brought to the USA.

Cook through this collapse cost many manufacturing workers their jobs.

 

[HyperZboy]

I find it interesting that everyone here is slamming GT and praising Apple, but Apple is not really slamming GT, just saying they couldn't produce enough for the iPhone 6 on the agreed schedule. How often does INTEL not meet a deadline or have production problems?

Furthermore, Apple is stating it's going to CONTINUE to work with GT!
Am I the only one who read that line? If Apple is so bitter about this, why would they do this? Obviously GT did have some tech process that's new and different that Apple badly wanted. But it's just not ready for primetime yet.

Apple has no requirement to find other uses for that plant. They financed its construction, but that doesn't necessarily entitle ownership unless the bankruptcy judge gives it to them.

Everyone's ranting about the CEO selling shares ahead of time. OMG! The hypocrisy there. Anyone remember all the things Sculley & Amelio did when Apple was in trouble? Hell even Steve Jobs dumped tons of Apple shares in a shady way when everyone thought Apple was going under.

How easily people forget.

 

[gdbleb]

This still doesn't make sense. If the product wasn't good enough for Apple's plans and never was good enough, why did GTAT deploy 2,000 furnaces to prove that?

 

[OatmealRocks]

What a mess, all because of one guy's selfish actions.

Probably all of senior management's actions. Throw in the sales team too for promising too much.

 

[the8thark]

Jobs brought more manufacturing jobs to the USA.

Job: Zero manufacturing jobs brought to the USA.
Cook: Minus 700 (or so) jobs brought to the USA.

Cook through this collapse cost many manufacturing workers their jobs.

Jony gets to introduce another stupidly thin product.

Ive needs to make himself thin. He is very fat bordering obese now.

 

[OatmealRocks]

This still doesn't make sense. If the product wasn't good enough for Apple's plans and never was good enough, why did GTAT deploy 2,000 furnaces to prove that?

Maybe small sample given to Apple was good enough. Just GTAT couldn't deliver at the scale required her contract. Since Apple footing the bill of course GTAT is going to say YES we can do it at the volume Apple wants. No risk to them just all profit in their eyes.

 

[HyperZboy]

What a mess, all because of one guy's selfish actions.

Yeah, God knows Steve Jobs was never selfish!
He was a saint! MUAHAHAHAHAHAHA!

 

[HarryKeogh]

They should start building the iPhone 9 there right away. That way we won't have to wait a few years for it to come out of China.

 

[OatmealRocks]

Jobs brought more manufacturing jobs to the USA.

Job: Zero manufacturing jobs brought to the USA.
Cook: Minus 700 (or so) jobs brought to the USA.

Cook through this collapse cost many manufacturing workers their jobs.


Ive needs to make himself thin. He is very fat bordering obese now.

You think it was Cook that cost 700 jobs? You also think GTAT had 700 jobs prior to the expansion from Apple? You crazy?

 

[alent1234]

Jobs brought more manufacturing jobs to the USA.

Job: Zero manufacturing jobs brought to the USA.
Cook: Minus 700 (or so) jobs brought to the USA.

Cook through this collapse cost many manufacturing workers their jobs.


Ive needs to make himself thin. He is very fat bordering obese now.

tim cook was always the head of logistics and decided these things. steve jobs didn't decide where the product would be made

 

[doug in albq]

I find it interesting that everyone here is slamming GT and praising Apple, but Apple is not really slamming GT, just saying they couldn't produce enough for the iPhone 6 on the agreed schedule. How often does INTEL not meet a deadline or have production problems?

Furthermore, Apple is stating it's going to CONTINUE to work with GT!
Am I the only one who read that line? If Apple is so bitter about this, why would they do this? Obviously GT did have some tech process that's new and different that Apple badly wanted. But it's just not ready for primetime yet.

Apple has no requirement to find other uses for that plant. They financed its construction, but that doesn't necessarily entitle ownership unless the bankruptcy judge gives it to them.

Everyone's ranting about the CEO selling shares ahead of time. OMG! The hypocrisy there. Anyone remember all the things Sculley & Amelio did when Apple was in trouble? Hell even Steve Jobs dumped tons of Apple shares in a shady way when everyone thought Apple was going under.

How easily people forget.

I am not praising Apple on this situation. I think GT is the fall-guy / scapegoat here.

I think this mess all comes down to Apple deciding, late in the game, that sapphire was not a possible/practical/affordable solution for mobile device screens.

From this decision Apple then decided to cover it's ass for making an impossible/impractical/unaffordable decision in the first place.

The most powerful organizations in the world can get away with this type of stuff.

 

[wesk702]

cool, bought 50,000 shares at 0.4ish

Same, when they first bankrupted. I sold when it popped back up to 1.7.
Very quick $ indeed.

 

[Michaelgtrusa]

Apple Will Find Jobs For Employees At Its Bankrupt Supplier http://www.businessinsider.com/apple-settles-gtat-chapter-11-deal-finds-employee-jobs-2014-10

 

[HyperZboy]

Another point... GT filed Chapter 11 bankruptcy, not Chapter 7.
So while they're ceasing production and laying off people, they are not in fact going out of business.

If GT didn't have something here, why would Apple want to continue to work with them?

I mean. I've said before I think Tim Cook bungled this deal, at least from a PR perspective. But at the same time, I don't think he's really that dumb that he would continue to work with this company if they were shady smoke and mirrors thieves selling snake oil.

This is the first public comment Apple has made except that they "were shocked"

There's still more to this to come out, trust me.

 

[OatmealRocks]

I am not praising Apple on this situation. I think GT is the fall-guy / scapegoat here.

I think this mess all comes down to Apple deciding, late in the game, that sapphire was not a possible/practical/affordable solution for mobile device screens.

From this decision Apple then decided to cover it's ass for making an impossible/impractical/unaffordable decision in the first place.

The most powerful organizations in the world can get away with this type of stuff.

GTAT the fall guy? You serious? More logical assumption is GTAT failed to meet the requirements of the contract and not Apple 'late in the game' decided not to use the sapphire. You actually think Apple don't have the life cycle of every component planned in detail? You think this is their first complex smart phone they have manufactured? This ain't Blackberry. Apple is the top of the food chain because of proven track records and you want to say GTAT is the one more competent then Apple? So competent they only had 1/15-1/20 of the revenue prior and have no experiences at this scale but you still think GTAT is the 'scape goat' really? Tin foil hat anyone?