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
86 months ago
Synthetic sapphire, look it up.

Its called humor #
Score: 17 Votes (Like | Disagree)
AppleInTheMud Avatar
86 months ago
Mining? #### U guys #
Score: 17 Votes (Like | Disagree)
SlCKB0Y Avatar
86 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
86 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
86 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
86 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)

Top Stories

prosser macbook air colors stacked

Images Reveal Colorful New MacBook Air Design

Tuesday May 11, 2021 5:06 am PDT by
Apple's next MacBook Air will feature a completely new design and come in a range of colors like the 24-inch iMac, according to leaker Jon Prosser, who has now released supposedly accurate renders of the new machines based on leaked images. In a new video uploaded to YouTube channel Front Page Tech, Prosser elaborated on his previous prediction that Apple's next-generation MacBook Air models ...
m1 ipad pro chip

M1 iPad Pro Over 50% Faster Than Previous Generation in Early Benchmarks

Tuesday May 11, 2021 11:56 am PDT by
Last month, Apple introduced a new iPad Pro with the same M1 chip found in the latest Macs, and early benchmark results indicate that the M1 iPad Pro is over 50% faster than the previous-generation iPad Pro. Based on five legitimate Geekbench 5 results (here's the fifth) for the fifth-generation 12.9-inch iPad Pro with the M1 chip, the device has average single-core and multi-core scores of...
iPhone 13 Camera Backs

iPhone 13 Models Will Be Slightly Thicker and Will Have Larger Camera Bumps

Monday May 10, 2021 10:41 am PDT by
Apple's upcoming iPhone 13 models will be slightly thicker than the iPhone 12 models and will also feature larger, thicker camera bumps with lenses that protrude less, according to iPhone 13 schematics seen by MacRumors. The new iPhone 13 and 13 Pro models are expected to feature a thickness of 7.57mm, up from 7.4mm in the iPhone 12 models. That's an increase of 0.17mm, which won't be hugely ...
apple park drone june 2018 2

Apple Fires Newly Hired Ex-Facebook Product Manager Following Revelations of Past Misogynistic Comments

Thursday May 13, 2021 12:10 am PDT by
Apple has fired Antonio García Martínez, an ex-Facebook product manager and author of the controversial book "Chaos Monkeys," following public and internal calls for removal and investigation due to past misogynistic statements, The Verge reports. Apple hired Martínez earlier this week to join its ads team, however, comments that Martínez made in the past sparked condemnation from users...
imac m1 blue isolated 16x9 500k

M1 iMac is Up to 56% Faster Than Prior-Generation High-End 21.5-Inch iMac

Wednesday May 12, 2021 10:03 am PDT by
Apple's M1 iMacs are set to start delivering to customers next week, and ahead of the official launch day, benchmarks for the machines have been showing up on Geekbench, likely from reviewers who are testing them. It will come as no surprise that M1 iMac benchmarks are right on par with benchmarks for the M1 MacBook Pro, MacBook Air, and Mac mini, coming in with an average single-core score...
iPad Pro Feature

Early M1 iPad Pro Orders Now Preparing to Ship

Tuesday May 11, 2021 9:41 am PDT by
Apple will soon ship out 11 and 12.9-inch M1 iPad Pro models, according to multiple Twitter users and MacRumors readers who have seen their orders shift to "Preparing to Ship" status. So far, we haven't seen any shipment notifications, but that's the next step and is likely to happen in the near future. Apple has not provided an exact delivery date to those who ordered a new M1 iPad Pro, but ...
fortnite apple logo 2

Judge in Epic vs. Apple Case Floats Potential Compromise

Wednesday May 12, 2021 3:54 pm PDT by
In the ongoing legal battle between Apple and Epic Games, the two companies are this week calling up their expert witnesses to argue their points before Judge Yvonne Gonzalez Rogers, who will make a decision in the case after a three week trial. Expert testimony is not as exciting as some of the leaked App Store documents that were highlighted last week, especially as much of what's being...
AirTag in Envelope Feature 2

AirTag Used to Successfully Track a Mailed Package Across the UK

Wednesday May 12, 2021 8:44 am PDT by
An Apple customer in the United Kingdom has successfully used Apple's Find My network to track an AirTag as it was being sent by mail to a friend in a completely different city. Outlined in a blog post at Intego, Kirk McElhearn said he taped an AirTag to a piece of card, wrapped it inside a small bubble envelope, and then sent it on its way. Kirk lives in the small town of...
maxresdefault

Video: Make Your iPhone Last Longer With These Battery Preserving Tips

Monday May 10, 2021 1:23 pm PDT by
Maximizing battery life is something that many iPhone users deal with on a regular basis as we all want our iPhones to last as long as possible. Sometimes there are bugs in iOS that make the battery drain faster, and sometimes we just need to eke out as much as possible on a long day out and about. Subscribe to the MacRumors YouTube channel for more videos. In our latest YouTube video, MacRumo...
macos big sur ios 14 iphone 12 pro macbook air icloud drive desktop documents hero

Apple Merging 'iCloud Documents and Data' Service With iCloud Drive in May 2022

Tuesday May 11, 2021 2:36 am PDT by
Apple plans to merge its iCloud Documents and Data service with iCloud Drive starting in May of 2022, according to a support document published late last week (via MacGeneration). iCloud Drive and iCloud Documents and Data share the fundamental ability to backup data from apps. However, iCloud Documents and Data was often a cumbersome, confusing experience. In contrast, iCloud Drive is more...