Apple's sapphire crystal supply source GT Advanced files for Chapter 11 bankruptcy

GT Advanced Technologies, which supplies the sapphire crystal used in the camera cover and the Touch ID sensor.for Apple's iPhone devices, has announced it has filed for Chapter 11 bankruptcy protection.

The company indicated it has $85 million in cash and is currently seeking debtor-in-possession financing, which it claims will allow it to secure additional funds. It added, "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."

At the time of this writing, the stock price of GT Advanced had dropped 85 percent on the NASDAQ stock market. There's no word on how, if at all, this will affect Apple's future products, including its Apple Watch, which is scheduled to have a sapphire crystal display. There are other sapphire glass providers, however, and Apple has a lot of money to throw at production, so the answer could well be not at all.

Source: GT Advanced

I have been writing professionally about technology and gaming news for 14 years.

  • I don't get this. Didn't apple but this company last year? And even if they didn't, shouldn't apples order of probably several million watch screens keep them in business?? Plus the camera lenses and Touch ID covers of tens of millions of devices. Did Apple force them to invest too much in producing more for their watch but once they did that they didn't have any more orders? Sent from the iMore App
  • Didn't apple but this company last year?
    No, but I can understand why you're confused. GT announced last year that it won a multiyear contract from Apple, and that Apple was also building for them an "Advanced Sapphire Furnace" to produce new material exclusively for Apple. But this isn't fundamentally different than partnership arrangements that Apple has made with other parts suppliers. It's just that most of them are in China so you never hear about them.
  • Ok thank you. That makes more sense. Sent from the iMore App
  • Apple has the bargaining weight to drive pretty hard bargains and consequently, very slim margins for its suppliers. Also, having a strong revenue stream doesn't necessarily protect you from solvency. Revenue is not the same thing as cash inflows. Basically, they could be doing and planning monster loads of business with Apple and still run low on or out of cash. This kind of thing happens all the time in business.
  • Apple probably negotiated a very low price with them, leaving too small of a profit margin for GT. All it takes is some increasing costs (maybe raw materials or labor or Apple not paying their bills on time etc. ) and you're screwed. I bet Apple is quite the bully with their suppliers.
  • Another Apple still building their own sapphire plant?
  • From what I understood. Apple invested in this one and made them buy a lot more furnaces to ramp up production. Sent from the iMore App
  • Apple never was building their own sapphire plant. The Advance Sapphire Furnace Apple built for GT that I mentioned in my response to Master Julian's post is what you're thinking of.
  • Oh ok, thanks
  • Was all in Apple's plan to let they go bankrupt .
    Now watch Apple "save" GT Advance ,owning it for pennies on the $ Update : GT Avance Stocks down 90% ,
  • And for people that are not in the business, GT Advanced was down from $873Mil in revenue in 2011 to $299Mil in 2013, and that was their core business (LED and Solar materials). I would imagine Apple folks had this as a worst-case scenario and already have a business plan in place.
  • Oh brother you know they do.
    I love Apple.
    Turn and burn baby, turn and burn.
  • Apple will buy it with a straw man corp and corner the market...
    watch, no pun