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Did Apple possibly send sapphire supplier GT Advanced into bankruptcy?

Written by Andre Yoskowitz (Google+) @ 09 Oct 2014 10:11 User comments (5)

Did Apple possibly send sapphire supplier GT Advanced into bankruptcy? One of the biggest pieces of business tech news on Monday was the surprise bankruptcy of sapphire display supplier GT Advanced.
The company, which was worth $1.5 billion on Sunday night and is Apple's only sapphire crystal supplier, declared bankruptcy on Monday, catching investors off-guard. The company's stock fell 92 percent on Monday, only rebounding slightly since then. The company has a value of $175 million now, with many expecting that Apple will try to step in and help. Apple was equally as surprised as investors, at least according to their filing: "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," read the updated regulatory filing.

However, a new report claims that Apple may have inadvertently pushed the company into bankruptcy. Reportedly, GTAT did not meet a required metric and Apple withheld the last portion of its loan to the the company. Says the report: "Apple had agreed to four prepayments to GT totaling $578 million -- contingent on meeting certain technical requirements -- to buy equipment for the facility. Apple didn't pay the final $139 million of its prepayment loans because GT didn't meet those technical milestones."

It's hard to imagine that Apple would knowingly bankrupt its only sapphire supplier, but there may have not been a way around it given the contract's possibly stringent restrictions.

Source:
WSJ

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5 user comments

110.10.2014 14:08

Or, on the flip side, did GT file bankruptcy to try and force Apple to make the final payment?

212.10.2014 17:02

Originally posted by bhetrick:
Or, on the flip side, did GT file bankruptcy to try and force Apple to make the final payment?
Those weren't really "payments" but a loan that had to be repaid so GT could start manufacturing sapphire. There would be no point in getting Apple make the final payment. GT probably went into bankruptcy so it could get out of whatever contract it had with Apple to manufacture sapphire. It will be interesting to see how much of Apple's loan the courts will force GT to repay.

312.10.2014 22:25

Good old Galtian psychopaths shooting themselves in the foot. Haha.

Here's the oil; apart from closing two factories less than a year old and laying off nearly 900 workers:

Quote:
...GTAT has also asked that a New Hampshire bankruptcy court terminate its agreements with Apple, which it describes in a filing as "oppressive and burdensome." GTAT intends to come out of the bankruptcy by restructuring around its core businesses, including selling sapphire furnaces.
They want out.

Its a lot easier being righteous than right.


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412.10.2014 23:55

I am pretty sure GTAT must have consulted their lawyers before filing bankruptcy. Note that they have not files under chapter 11 so they may have something major up their sleeves !

513.10.2014 0:18

Nope.

Quote:
Apple's sapphire glass supplier has filed for Chapter 11 bankruptcy with plans to shut down two production plants and lay off 890 workers...
That's from the very same paragraph I quoted above.

Sorry Pmshah, I should have included the link:
http://www.theverge.com/2014/10/10/6960...utdowns-layoffs

That's assuming the article I quoted is correct.




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This message has been edited since its posting. Latest edit was made on 13 Oct 2014 @ 0:20

Its a lot easier being righteous than right.


DSE VZ300-
Zilog Z80 CPU, 32KB RAM (16K+16K cartridge), video processor 6847, 2KB video RAM, 16 colours (text mode), 5.25" FDD

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