gt_sapphire_furnaceApple withheld a final $139 million payment that it was due to make to GT Advanced, reports The Wall Street Journal, which may have contributed to the company's decision to file for Chapter 11 bankruptcy. GT also reportedly burned through cash, spending $248 million in one quarter.

That may have led to the company's filing, since its cash, at $85 million, was below a $125 million trigger point that would allow Apple to demand repayment of about $440 million in loans it had advanced. Apple had agreed to lend GT a total of $578 million to help get a large sapphire factory in Arizona up and running. The tech giant reportedly withheld the last $139 million payment it was due to make, although it isn't clear why.

What is obvious is that GT effectively bet the house on a new technology with a new business model and made itself dependent on a single customer--Apple.

Though it is not known why Apple withheld the final $139 million payment, Apple's $578 million loan to GT Advanced was subjected to certain capacity requirements that the sapphire company may not have been able to meet. According to GT Advanced's own filings, it may have had issues with poor sapphire yield rates.

Apple and GT Advanced first struck a deal in late 2013, and along with a $578 million loan for purchasing equipment, Apple also constructed a 700-employee manufacturing facility in Mesa, Arizona, which is run by GT Advanced.

While Apple was widely expected to include sapphire display covers from GT Advanced on some iPhone 6 models, that did not end up happening. Despite purchasing a facility for GT and lending it money to buy equipment, Apple was under no obligation to purchase GT's sapphire. GT was, however, subjected to "exclusivity provisions" that limited what it could sell to other companies.

Though GT Advanced has filed for Chapter 11 bankruptcy, GT Advanced's CEO promised the company would continue operations as it went though a transitional phase to reorganize its business.

GT Advanced will have its first Chapter 11 bankruptcy court hearing on Thursday, October 9 in New Hampshire, where it is expected to explain what caused its bankruptcy filing.

(Image: GT sapphire furnace)

Top Rated Comments

AppleInTheMud Avatar
124 months ago
Synthetic sapphire, look it up.

Its called humor #
Score: 17 Votes (Like | Disagree)
AppleInTheMud Avatar
124 months ago
Mining? #### U guys #
Score: 17 Votes (Like | Disagree)
SlCKB0Y Avatar
124 months ago
sapphire is very hard to find you have pay a lot of miners to get that much quantity apple wanted.

Duh, using miners is 20th century tech. Apple is using a massive herd of repurposed truffle pigs to sniff out the sapphires... :eek:
Score: 15 Votes (Like | Disagree)
Mike Oxard Avatar
124 months ago
Synthetic sapphire, look it up.

That's just make believe, like elves and Gremlins and Eskimos :)
Score: 12 Votes (Like | Disagree)
Mike Oxard Avatar
124 months ago
sapphire is very hard to find you have pay a lot of miners to get that much quantity apple wanted.

I know, and it must be a bugger to find stones big enough to make phone screens with.
Score: 12 Votes (Like | Disagree)
kerrikins Avatar
124 months ago
Doing business with Apple is pretty poisonous.

How is it poisonous? This is business: you promise results and fail, your partners don't pay you. They should have had a contingency plan.
Score: 8 Votes (Like | Disagree)

Popular Stories

iOS 18 Siri Integrated Feature

iOS 18 Will Add These New Features to Your iPhone

Friday April 12, 2024 11:11 am PDT by
iOS 18 is expected to be the "biggest" update in the iPhone's history. Below, we recap rumored features and changes for the iPhone. iOS 18 is rumored to include new generative AI features for Siri and many apps, and Apple plans to add RCS support to the Messages app for an improved texting experience between iPhones and Android devices. The update is also expected to introduce a more...
iPhone 16 Camera Lozenge 2 Colors

iPhone 16 Plus Rumored to Come in These 7 Colors

Wednesday April 10, 2024 3:52 am PDT by
Apple's iPhone 16 Plus may come in seven colors that either build upon the existing five colors in the standard iPhone 15 lineup or recast them in a new finish, based on a new rumor out of China. According to the Weibo-based leaker Fixed focus digital, Apple's upcoming larger 6.7-inch iPhone 16 Plus model will come in the following colors, compared to the colors currently available for the...
apple silicon feature joeblue

Macs to Get AI-Focused M4 Chips Starting in Late 2024

Thursday April 11, 2024 10:10 am PDT by
Apple will begin updating its Mac lineup with M4 chips in late 2024, according to Bloomberg's Mark Gurman. The M4 chip will be focused on improving performance for artificial intelligence capabilities. Last year, Apple introduced the M3, M3 Pro, and M3 Max chips all at once in October, so it's possible we could see the M4 lineup come during the same time frame. Gurman says that the entire...
top stories 13apr2024

Top Stories: M4 Mac Roadmap Leaked, New iPads in Second Week of May, and More

Saturday April 13, 2024 6:00 am PDT by
Apple's hardware roadmap was in the news this week, with things hopefully firming up for a launch of updated iPad Pro and iPad Air models next month while we look ahead to the other iPad models and a full lineup of M4-based Macs arriving starting later this year. We also heard some fresh rumors about iOS 18, due to be unveiled at WWDC in a couple of months, while we took a look at how things ...
apple tv 4k yellow bg feature

When to Expect a New Apple TV to Launch

Tuesday April 9, 2024 8:30 am PDT by
It has been nearly a year and a half since the current Apple TV was released, so the device is becoming due for a hardware upgrade. Below, we recap rumors about the next Apple TV, including potential features and launch timing. The current model is the third-generation Apple TV 4K, announced in October 2022. Key new features compared to the previous model from 2021 include a faster A15...