Apple Reaches Bankruptcy Deal with Sapphire Screen Maker

Tech giant Apple and one of its suppliers have decided to cut their losses in a dispute over the material that was to be used in the screens of the company's smartphones. GT Advanced Technologies Inc. (GTAT) has reached an agreement with Apple that will partially relieve the New Hampshire-based maker of optical, laser and solar applications of the $439 million in debt it still owes Apple after a failed effort to qualify as a supplier of sapphire for use in iPhones and other products.

The settlement calls for an auction to be held by November 23 to sell off the equipment that GTAT bought to use to supply the sapphire glass for Apple's products. The proceeds of the auction will be divided between the two companies, GTAT said in Chapter 11 bankruptcy papers filed on Monday in the U.S. Bankruptcy Court in New Hampshire. GTAT would like to keep some of its equipment, as many as 600 sapphire-making furnaces, according to the filing.

But GTAT will sell what it can and what it can't sell it will give to Apple. Apple will scrap any leftover equipment and extinguish the loan it made to GTAT that was meant to transform the latter company from an equipment maker into a prominent supplier of smartphone screen material. Once GTAT abandons the Arizona facility meant for sapphire production, Apple plans to turn it into a data center.

Still in Dispute

Sapphire is supposed to be more shatter resistant than glass, which would seem to make it the ideal material for phone screens. With that in mind, Apple loaned GTAT the money to develop and manufacture enough material to supply the next generation of iPhones. Some Apple Watch screens also use sapphire, as do the camera lenses on iPhones. But GTAT missed its September 2014 deadline...

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Apple Reaches Bankruptcy Deal with Sapphire Screen Maker

Tech giant Apple and one of its suppliers have decided to cut their losses in a dispute over the material that was to be used in the screens of the company's smartphones. GT Advanced Technologies Inc. (GTAT) has reached an agreement with Apple that will partially relieve the New Hampshire-based maker of optical, laser and solar applications of the $439 million in debt it still owes Apple after a failed effort to qualify as a supplier of sapphire for use in iPhones and other products.

The settlement calls for an auction to be held by November 23 to sell off the equipment that GTAT bought to use to supply the sapphire glass for Apple's products. The proceeds of the auction will be divided between the two companies, GTAT said in Chapter 11 bankruptcy papers filed on Monday in the U.S. Bankruptcy Court in New Hampshire. GTAT would like to keep some of its equipment, as many as 600 sapphire-making furnaces, according to the filing.

But GTAT will sell what it can and what it can't sell it will give to Apple. Apple will scrap any leftover equipment and extinguish the loan it made to GTAT that was meant to transform the latter company from an equipment maker into a prominent supplier of smartphone screen material. Once GTAT abandons the Arizona facility meant for sapphire production, Apple plans to turn it into a data center.

Still in Dispute

Sapphire is supposed to be more shatter resistant than glass, which would seem to make it the ideal material for phone screens. With that in mind, Apple loaned GTAT the money to develop and manufacture enough material to supply the next generation of iPhones. Some Apple Watch screens also use sapphire, as do the camera lenses on iPhones. But GTAT missed its September 2014 deadline...

Comments are closed.