GTAT Outlines Settlement With Apple

Sapphire glass; you want it, Apple wants it, but their partner couldn't deliver. In the long, slow burn that is GT Advanced, there are very few winners. Hundreds out of work, GTAT is now in bankruptcy court, and Apple is left searching for another Sapphire partner, which probably delays the material seeing your phone (and could delay the Apple Watch). Apple and GTAT have settled their business relationship, which is now available for all to view. Save for one small redaction, we get a bit of insight about GTAT biting off more than it could chew.

If you're not familiar with the goings on, we'll summarize: GTAT and Apple were working together on a Sapphire glass plant in Arizona. Apple owned the building, and GTAT was purchasing equipment to run the show and operate the facility. Over the course of the last year or so, GTAT was unable to satisfy deadlines they agreed to meet to satisfy Apple's desired timeline to get the facility up and running. Those delays caused Apple to hold back payments in the $500 million deal, which put GTAT even further behind. Without cash coming in, they were unable to buy needed equipment, and the whole thing went off the rails.

Though the settlement between the two companies is subject to approval by the bankruptcy court, GTAT and Apple have found common ground. As expected, GTAT will repay the $439 million they already received from Apple, without interest.

That repayment will come exclusively from sales of the Sapphire glass furnaces GTAT owns. In the deal, any intellectual property GTAT has is still theirs, and they are free to license their Sapphire growth and fabrication technology elsewhere.

This is the end of a chapter, but both companies will continue to do business. Apple owns the facility, and is still considering a way to have Sapphire glass coming out of Arizona.

Buying furnaces you already get a kickback on might be a pretty cost effective way to get into the Sapphire game, though.

Source: GT Advanced