Apple to the rescue: GT closing Arizona Sapphire plant

Nate Swanner - Oct 10, 2014, 2:00pm CDT
Apple to the rescue: GT closing Arizona Sapphire plant

GT Advanced, who was (yeah, was) partnering with Apple on Sapphire displays for products, is shuttering their Arizona facility. They’re also shutting down a plant in Massachusetts. The move to shut down the two operations will cost roughly 890 people to be out of work. After recently filing for Bankruptcy, it was expected GT would make some changes, but nobody outside their board room expected them to do an about-face and shutter the Arizona plant, which they have in partnership with Apple.


In a filing with the Bankruptcy Court in New Hampshire, GT Advanced says the deal they struck with Apple is “oppressive and burdensome”. They say that terminating that deal was the only way to move forward. A filing in their bankruptcy proceedings aims to reject that contract GT has with Apple.

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In a filing to slow-down and eventually halt operations at the facility, a GT Advanced lawyer said “the cash burn at GTAT’s sapphire manufacturing operations for the benefit of Apple is not sustainable”. GT has produced Sapphire for Touch ID on the iPhone, and was expected to make Sapphire displays for the Apple Watch.

When it was learned GT Advanced was filing for Bankruptcy, we took you through the potential case wherein Apple would gain full control of the Sapphire plant. It seems via this “oppressive” deal, GT is essentially walking away from the plant, and likely all the equipment inside — just as we expected might happen.

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In a statement, Apple said “We are focused on preserving jobs in Arizona following GT’s surprising decision and we will continue to work with state and local officials as we consider our next steps”.

GT Advanced isn’t going down without a fight, though. They wish to keep the right to seek damages against Apple in the future, saying “GTAT believes that it has many claims against Apple arising out of its business relationship with Apple”.

GT may have claims, but they don’t have Sapphire facilities anymore.

Source: The Wall Street Journal


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13 Responses to Apple to the rescue: GT closing Arizona Sapphire plant

    • Plus the reason why Apple talked GT into entering the sapphire manufacturing business versus doing it themselves was for them to avoid this low margin, highly volatile commodity business in the first place.

      Its not clear how anything has changed to make them reconsider this decision. its more likely they are even more convinced they made the right business decision.

  1. Question 1. Which is the odd one out?
    A. “Apple to the rescue”
    B. “shuttering their Arizona facility. They’re also shutting down a plant in Massachusetts”
    C. “the deal they struck with Apple is “oppressive and burdensome””
    D. ““the cash burn at GTAT’s sapphire manufacturing operations for the benefit of Apple is not sustainable””
    E. “[GT] wish to keep the right to seek damages against Apple in the future, saying “GTAT believes that it has many claims against Apple arising out of its business relationship with Apple”.”

    Question 2. What is Mr. Swanner smoking?

    Question 3. Spell “cat”.

  2. I don’t get it, 500+ million that apple invested wasn’t enough?! How is that possible? You can buy a country with that money.

    • Never take the words of a legal pleading or filing literally. Looks like GTAT wants more money out of Apple. They should have given their original deal a harder look before signing. Apple is well know for bargaining hard and taking no prisoners in general in its business dealings. Seems like Apple had the better of them from the get go.

    • It was a loan. GTAT took the bait and set up the mfg facilities but Apple gave GTAT the middle finger. GTAT has no choice but to file BK.

  3. Has anyone seen Elop recently? Wouldn’t be surprised if he was caretaker CEO of GT for the last six months.

  4. If Apple wants to rescue, Cook can dump another 500 millions to GT. It’s still way cheaper than Beats. Apple wants to nickel and dime GT. Lots of people (who invested in GT because of Apple investment) investments went down the toilet.

  5. I hate to say this, but I feel like Apple should have done its homework and done the breakage tests on sapphire display faces before they dropped over half a billion on vaporware. It’s clear that they set the cart before the horse and made some deals that ultimately protected their interests and screwed the little guy.

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