29, October 2014: It has been revealed that the company that was about to supply the scratchproof sapphire glass screen use for Apple Watches is still in a crisis and might resort to shutting down soon.
On October 6, the company GT Advanced Technologies has filed for its bankruptcy. This is not foreseen as the company has been regarded a few months ago as having a bright future. On Thursday, Apple stated that the company is not yet ready to fulfill its ambitious vision of sapphire manufacturing.
Details of the bankruptcy
Since GT’s filing of bankruptcy, many speculations have emerged on the surface. This has led to the decrease of the company’s market value and several assumptions as to the reason of its fermenting relationship with Apple.
All these were proven wrong as Apple, in a statement released last Thursday, have said that it will still look after GT’s advances. It also considers the possibility of doing future business with it. It has to be noted that Apple had been instrumental in GT’s development of its sapphire-manufacturing plant in Arizona.
The spokeswoman of Apple named Kris Huguet said that the company has already invested much on this dream of sapphire manufacturing; yet, GT is still not ready for production. Nevertheless, they will still reconsider and think of other ways as to how they can use the facility.
The impact of GT’s bankruptcy on Apple Watches
Last November 2013, GT entered into a deal with Apple as its supplier of sapphire glass screen for Apple watches. Under the contract, it has to use the Arizona plant to produce scratch-resistant sapphire for Apple exclusively.
GT stated last Thursday that their ongoing business with Apple will still go on. This exchange involves the production of large and high-end sapphire boules, raw cylinders of the material. These materials are said to lower the production’s unit cost and increase the capacity effectively.
GT added that it has plans of expanding from 115 kg. to 165 kg. The other pertinent details of an agreement struck were laid out by GT Advanced on Thursday.
As stipulated under the pact, GT will halt in its production of sapphire materials for the mean time so as to have time to focus on producing sapphire crystals.
It is also said that it will be release from all its exclusivity of ties with Apple. A mechanism will also be devised for Apple to recover its advanced payment to GT amounting to $439 million.
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