GT Advanced Technologies, the company Apple tapped to manufacture large quantities of sapphire, filed for Chapter 11 bankruptcy earlier today.Over the past year, Apple helped GT Advanced orchestrate the build-out of a brand new sapphire manufacturing facility in Arizona, even providing GT Advanced with a few substantive loans to help them acquire the requisite machinery. Further, regulatory filings throughout the year indicated that GT Advanced had plans to manufacture huge quantities of sapphire, leading some to speculate that the iPhone 6 would feature a sapphire coated display. The iPhone 6 unveiling, however, came and went with nary a mention sapphire.
A press release on the matter reads:
GT Advanced Technologies Inc., announced today that it had, together with certain of its direct and indirect subsidiaries (collectively, GT), commenced voluntary cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Hampshire. GT expects the court will authorize the company to continue to conduct business as usual while it devotes renewed efforts to resolve its current issues and develops a reorganization plan.
GT indicated that as of September 29, 2014 it had approximately $85 million of cash. In addition, it is now seeking debtor-in-possession financing, which, once obtained, would provide the company with an immediate source of additional funds. These funding sources will enable GT to satisfy the customary obligations associated with the daily operation of its business, including the timely payment of employee wages and other obligations.
As a result of the filing, and as is customary with public companies, NASDAQ may temporarily halt trading in the company's stock pending the receipt of additional information on the company's financial condition. The company is cooperating with NASDAQ and will be providing any requested information as promptly as possible.
While the iPhone 6 still employs sapphire for the home button and the camera lens, that's apparently not enough to give GT Advanced the amount of cash they need to run their business.
As for sapphire not being used for the iPhone 6 display, there are two theories percolating through the blogosphere. One is that Apple was hoping to announce an iPhone with a sapphire display but that GT Advanced wasn't able to get yields up to a sufficient level before mass production kicked off. Another is that Apple seriously pursued the idea of a sapphire iPhone display but ultimately retreated after discovering during drop tests that it was more prone to shattering than glass.
Following news of GT Advanced filing for bankruptcy, shares of the company are down by over 90% and are currently trading at about $0.90.
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