Apple Trying to Help GT Advanced Meet Milestones, Holds Off on Asking for Loan Repayment

Earlier today, an Apple representative told Reuters that the company was surprised by GT Advanced's decision to file for Chapter 11 bankruptcy on Monday, and The Wall Street Journal has now published some new information on the behind the scenes dealings between the two companies.

According to inside sources, Apple was caught off guard by GT's filing because it had been working with GT to make sure the latter company would be able to pay all of its debts. Apple, aware of GT's weak cash position, also reportedly held off on asking for loan repayments on the $439 million GT has received so far.

gt_advanced_technologies_banner

On Wednesday, Apple called the bankruptcy filing "a surprising decision." A person familiar with the matter said Apple had been working with GT to keep it solvent. In addition, Apple hadn't demanded repayment of loans as it could have, based on GT's weak cash position, people familiar with the matter said.

As part of its loan agreement, Apple was entitled to ask GT Advanced for repayment if its cash holdings fell below $125 million, but Apple has opted not to demand repayment.

In addition to holding off on asking for loan repayment, Apple is also attempting to help GT qualify for the final $139 million payment that Apple has thus far withheld from the company. GT has not yet received the payment because it has reportedly failed to deliver on the technical milestones that it was contractually obligated to meet under the original terms of the $578 million loan that Apple provided for purchasing equipment.

Though Apple was widely rumored to be using GT Advanced sapphire for the iPhone 6 and 6 Plus displays, the company opted to stick with Gorilla Glass, leading to troubles for GT Advanced. Apple provided GT with a facility and a loan to buy equipment, but was not required to purchase GT's sapphire, which has eaten into GT's cash pile.

GT, meanwhile, has reportedly run into manufacturing issues that have impacted yield, explaining why Apple may have passed on sapphire screens for its new iPhones. GT is also subjected to exclusivity provisions limiting what it is able to sell to other companies.

Apple's upcoming Apple Watch will use sapphire on some models, but GT's bankruptcy is unlikely to impact the production of that device as Apple can use sapphire from other sources. The future of sapphire display covers for iPhones is less certain, however, as there are few other sources where Apple can obtain enough high-quality sapphire.

GT Advanced will have its first Chapter 11 bankruptcy court hearing tomorrow, where it is expected to divulge additional information on the reasons behind its bankruptcy filing.

Top Rated Comments

wikiverse Avatar
109 months ago
I love it when apple plays the good guy role.

Hold up. Apple are the reason GT are in this mess.

Apple: "we will loan you $500m for new equipment to make sapphire for out phones"

GT: "ok"

Apple: "you can't sell the sapphire to anyone else, only us"

GT: "ok, we will give you exclusive access because of the loan."

Apple: "we don't want your sapphire now, and you aren't allowed to sell it to anyone else."

GT: "WTF! How are we supposed to make money?"
Score: 16 Votes (Like | Disagree)
freediverx Avatar
109 months ago
Hold up. Apple are the reason GT are in this mess
Or, it went something like this:


Apple: "We've developed a revolutionary technique for producing sapphire screens and we hear this is right up your wheelhouse. Can you manufacture these for us in the quantities we require?"

GT: "Sure, if you loan us a ton of money for expensive equipment."

Apple: "Ok, if you can guarantee production in sufficient numbers within our required timeframe, we can loan you $500m for new equipment and commit to buying a crap ton of them from you under an exclusive contract. "

GT: "You've got a deal!"

Months later...

GT: "Oops, we've run into manufacturing glitches and won't be able to deliver anywhere near the quantities you need within the expected timeframe and cost. Can you send over the rest of the money you were going to loan us before we file for bankruptcy?"

Apple: :-|
Score: 13 Votes (Like | Disagree)
dBeats Avatar
109 months ago
Hold up. Apple are the reason GT are in this mess.

Apple: "we will loan you $500m for new equipment to make sapphire for out phones"

GT: "ok"

Apple: "you can't sell the sapphire to anyone else, only us"

GT: "ok, we will give you exclusive access because of the loan."

Apple: "we don't want your sapphire now, and you aren't allowed to sell it to anyone else."

GT: "WTF! How are we supposed to make money?"

No. GT's failure to deliver is the reason. Apple wants to use it, but needs a LOT of it. GT said they could do it and then didn't do it. No body grabbed GTs hand and made them sign anything.
Score: 13 Votes (Like | Disagree)
Nozuka Avatar
109 months ago
Hold up. Apple are the reason GT are in this mess.

Apple: "we will loan you $500m for new equipment to make sapphire for out phones"

GT: "ok"

Apple: "you can't sell the sapphire to anyone else, only us"

GT: "ok, we will give you exclusive access because of the loan."

Apple: "we don't want your sapphire now, and you aren't allowed to sell it to anyone else."

GT: "WTF! How are we supposed to make money?"


i guess you didnt read the article.
Score: 12 Votes (Like | Disagree)
mainstreetmark Avatar
109 months ago
Somewhere, there's a man drinking whiskey alone in a dark room, staring blankly at the wall, wondering how it all went wrong.
Score: 12 Votes (Like | Disagree)
yaxomoxay Avatar
109 months ago
You have no idea how much I would love to be in the position to say, "Well, let's give me the $500 millions later..."
Score: 12 Votes (Like | Disagree)

Popular Stories

iphone 15 pro wifi 6e

Internal Apple Document From Leaker 'Unknownz21' Confirms Wi-Fi 6E Will Be Limited to iPhone 15 Pro Models

Friday January 27, 2023 10:01 am PST by
Multiple rumors have suggested that the next-generation iPhone 15 models will adopt the Wi-Fi 6E standard that Apple has already introduced in the iPad Pro and MacBook Pro, and now a leaked document appears to confirm Apple's plans. Sourced from researcher and Apple leaker Unknownz21 (@URedditor), the document features diagrams of the iPhone 15's antenna architecture. D8x refers to the...
iPhone 14 Pro Purple Side Perspective Feature Purple

iPhone 15 Pro Rumored to Have These 8 Features

Friday January 27, 2023 2:11 pm PST by
Apple's next-generation iPhone 15 Pro and iPhone 15 Pro Max are expected to be announced in September as usual. Already, rumors suggest the devices will have at least eight exclusive features not available on the standard iPhone 15 and iPhone 15 Plus. An overview of the eight features rumored to be exclusive to iPhone 15 Pro models:A17 chip: iPhone 15 Pro models will be equipped with an A17...
top stories 28jan2023

Top Stories: iOS 16.3 Released, iPhone 15 Pro Rumors, macOS Tips and Tricks, and More

Saturday January 28, 2023 6:00 am PST by
Following last week's hardware announcements, this week saw the actual release of several of the new products as well as operating system updates bringing new features and bug fixes across Apple's platforms. This week also saw some fresh rumors about the iPhone 15 lineup and Apple's upcoming AR/VR headset, while we shared some tips to help you get the most of your macOS experience, so read...
Multi Display CarPlay 1

Apple Launching All-New CarPlay Experience Later This Year With These 5 Features

Sunday January 29, 2023 10:15 am PST by
In June 2022, Apple previewed the next generation of CarPlay, promising deeper integration with vehicle functions like A/C and FM radio, support for multiple displays across the dashboard, personalization options, and more. Apple says the first vehicles with support for the next-generation CarPlay experience will be announced in late 2023, with committed automakers including Acura, Audi,...
maxresdefault

Hands-On With the New M2 Max MacBook Pro

Thursday January 26, 2023 12:14 pm PST by
New 14-inch and 16-inch MacBook Pro models with the latest M2 Pro and M2 Max chips are available in Apple retail stores and are already in the hands of customers, and we picked up one of the new M2 Max machines to answer all of the questions MacRumors readers considering a purchase might have. Subscribe to the MacRumors YouTube channel for more videos. Yesterday, we asked MacRumors fans on...
iPhone 15 General Mock Feature

Kuo: iPhone 15 Models to Adopt Wi-Fi 6E

Thursday January 26, 2023 5:09 pm PST by
The upcoming iPhone 15 models that are set to be introduced later in 2023 will adopt the Wi-Fi 6E standard, according to Apple analyst Ming-Chi Kuo. In a note about Apple's work on a Wi-Fi chip, Kuo said that the company will upgrade the iPhone 15 to Wi-Fi 6E. Apple is already using Wi-Fi 6E for the 11 and 12.9-inch iPad Pro models introduced last year, along with the new Mac mini and...
iPhone 14 Pro Purple Side Perspective Feature Purple

iPhone 15 Expected to Feature Wi-Fi 6E Like Latest Macs and iPad Pro

Wednesday January 25, 2023 5:39 pm PST by
The iPhone 15 will support Wi-Fi 6E, according to a research note shared this week by Barclays analysts Blayne Curtis and Tom O'Malley. The analysts did not specify whether the feature will be available on all models or limited to the Pro models. Apple has added Wi-Fi 6E support to a handful of devices so far, including the latest 11-inch and 12.9-inch iPad Pro, 14-inch and 16-inch MacBook...