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Earlier today, GT Advanced Technologies officially announced its settlement with Apple, which will see the two companies dissolving their partnership, ending their production agreement, and eliminating contractual ties that kept GT from selling its sapphire to other parties.
Under the agreement, GT Advanced will be selling off its remaining sapphire, along with 2,000 sapphire furnaces, with much of the proceeds going to Apple to repay the $439 million loan it provided to get the operation underway.
Apple has now commented on the settlement with GT Advanced, telling Re/code that GT's sapphire manufacturing process simply wasn't ready for production, and that a relationship in the future remains a possibility as the company's sapphire production techniques improve. GT will continue research work focused on creating sapphire boules over 165 kilograms.
Apple also says that it is going to look for other ways to use the Mesa, Arizona facility that it purchased for GT Advanced, which will be unused after GT fully shuts down operations at the end of December
"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."
GT Advanced first filed for bankruptcy at the beginning of October, but the company was reportedly missing technical milestones as early as February, hinting at the trouble to come. While Apple was widely expected to use sapphire from GT Advanced for the iPhone 6 and 6 Plus displays, the company opted to stick with Corning's Gorilla Glass after it became apparent GT would not be able to produce sapphire of the quality that Apple required.
Approximately 650 employees at the Mesa, Arizona sapphire plant have already been laid off, and a limited number of employees will remain employed until the end of the year in order to help GT Advanced wind down production at the factory, finishing the sapphire boules that are currently growing and shutting down and cleaning furnaces for storage and sale.
Top Rated Comments
(View all)Easy answer;
Build Mac minis there. Make them single-core with a maximum 4GB RAM but sexy and thin with a back-lit sapphire Apple logo.
Apple wins on multiple levels with the above plan. It gets to further degrade another product and Jony gets to introduce another stupidly thin product.
Jobs brought more manufacturing jobs to the USA.
Job: Zero manufacturing jobs brought to the USA.
Cook: Minus 700 (or so) jobs brought to the USA.
Cook through this collapse cost many manufacturing workers their jobs.
Ive needs to make himself thin. He is very fat bordering obese now.
You think it was Cook that cost 700 jobs? You also think GTAT had 700 jobs prior to the expansion from Apple? You crazy?
US manufacturing continues to be a joke. First the Mac Pro delays and then this. Anyone who doesn't acknowledge this is blinded.
It is a joke to people thinking US can make the iPhone or some other large volume product. However if this is a goal than Apple needs to tread even slower than before as GTAT is a perfect example. Imagine building a complete product with multiple US manufacturers? And depending on them. Crazy. Someone else pointed out it would take a decade and I tend to agree that it would take that long to transition manufacturing something like an iPhone to be completely built in the US. There are just no manufacturing plants at such scale in the US. They would literally have to build a new town for this endeavor and also get the people to move their for this type of jobs. Just imagine the costs, the politics involved.I think small scale is the best we will get for US manufacturing. Mac Pro, TB Displays.. peripherals maybe Mac Mini is about it.