GT Advanced Technologies filed for chapter 11 bankruptcy protection earlier this week and now is asking the court for permission to shut down the factory where it has been making synthetic sapphire glass for Apple. The company's bankruptcy filing came as a surprise to everyone, including Apple, and its latest request likely isn't sitting well with the iPhone and iPad maker.
GTAT wants to shut down its Apple sapphire glass factory
Apple partnered with GT Advanced (GTAT) about a year ago to produce sapphire glass for the Apple Watch, and presumably the iPhone, too. Apple leased factory space in Mesa, Arizona to GTAT, and then financed the furnaces needed to make the glass. The deal was costing Apple US$578 million.
When Apple announced the iPhone 6 and iPhone 6 Plus on September 9, sapphire glass was conspicuously missing from the product specifications and instead the big screen smartphones were shipping with Ion-x glass. Apple hasn't said why it isn't using sapphire for the new iPhone displays. It could be GTAT didn't produce enough, the glass might have been too brittle, or Apple may not have intended to use sapphire for the iPhone display.
Apple fronted GTAT $440 million, but held back the final $139 million payment, which likely didn't help the manufacturer's financial situation. Apple could potentially take back the sapphire furnaces and factory, although so far the company has only said that it is working with state and local officials to help preserve jobs in the area.
U.S. Bankruptcy Court Judge Henry Boroff will consider GTAT's request on October 15. Details from GTAT's motion aren't available because they involve confidential contract information with Apple, according to Re/code.
While Apple will still be able to get sapphire for the Apple Watch display, just how much will be available is in question. If GTAT's furnaces aren't producing sapphire Apple could be caught without enough glass for the watches it wants to make ahead of its launch in 2015.
Apple isn't saying anything more about GTAT's bankruptcy filing, and the glass maker is staying quiet, too.