GT Advanced Technologies Announces that its Partnership with Apple is Over

[RaduTyrsina]

GT Advanced Technologies is the company supplying Apple with sapphire for the Apple Watch, with the company being previously rumored to have been working on panels for new iPhones, as well.

The company has announced that the partnership between the two companies is over because GT Advanced didn't stick to the agreed timelines for sapphire production. Thus, Apple had to abandon its plans for sapphire-protected iPhones and hold back a payment of $139 million which resulted in the bankruptcy of GTAC. Here's how the official agreement sounds like

Under the terms of the settlement agreement, which is subject to approval by the Bankruptcy Court, GT will be released from all exclusivity obligations under its various agreements with Apple. GT will retain ownership of all production, ancillary and inventory assets located in Mesa and Apple is provided with a mechanism for recovering its $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF® [Advanced Sapphire Furnace] sales. The agreement provides for a mutual release of any and all claims by both parties. As a result of the agreed upon terms, GT retains control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion™, without restrictions.

The company will also sell its sapphire furnaces and will try to repay the $439 million that Apple gave it in advance. Also, pproximately 650 Mesa employees have been laid off. Apple also said the following:

"Apple put a lot of effort into an ambitious new sapphire manufacturing process with GTAT which is not ready for production. We’re going to continue evaluating GTAT’s progress on larger sapphire boule development, as well as consider other options for the facility. We remain committed to the city and we’re going to work with Mesa and Maricopa County to help the GT Advanced employees who will be impacted by this find new jobs."

Right now, we don't know whether this will have an impact on the Apple Watch launch scheduled to happen "early next year", but it definitely puts sapphire screen iPhones on hold until Apple figures out a solution.

Source: GTAT