Despite, or possibly because of, its recent Chapter 11 Bankruptcy filing, GTAT remains the world leader in the development and sale of sophisticated, efficient furnaces for the production of high grade crystalline materials. They began in photovoltaic cells, and expanded into polysilicon, and the rapidly growing market for LED quality sapphire the acquisition of Crystal Systems, in Salem, MA, in July 2010. Its May 2013 acquisition of Thermal Technologies via a stock-for-stock exchange added an electrical annealing process that grows crystals at lower temperatures, and other high technologies. GTAT claims to have mostly integrated Thermal into its sapphire operation. Apple Computer Debacle
Under a major contract announced in November 2013, GTAT undertook a massive project to be sole supplier to Apple of unscratchable device screens—in return for Apple's providing them with the use of a 1M sq' plant in Mesa, AZ, and pre-paying for the sapphire in the amount of nearly $600m to enable GTAT to purchase tools and supplies and hire new personnel to run the plant. GTAT began shipping massive amounts of equipment to Mesa in February 2014, and added over a thousand new hires. GTAT's other areas of business took a back seat to this massive project. During 2013-14, GTAT’s stock was one of the most widely shorted and, unfortunately, predictions that GTAT would be unable to meet Apple’s quality requirements proved correct with a suddenness that shocked stockholders and observers alike. Apple’s September iPhone6 event omitted sapphire screens from the device, though including them for its planned Apple Watch, an untested market. GTAT’s stock crashed to a low of 0.80 when GTAT announced that it had filed in New Hampshire to reorganize under Chapter 11 of the bankruptcy code on October 6, 2014. Remaining Sources of Value
GTAT had $1.5B of assets total, including $85M of cash, vs. $1.3B of liabilities, as of the filing, including the following:
The Monocast™ furnace technology for the production of photovoltaic materials and polysilicon.
The Hyperion™ Ion Implanter, a non-kerfing, ion beam knife for the thin-slicing of extremely hard materials; it still remains to be seen how well developed the Hyperion ion implanter is or how integral it will become to GTAT's plans going forward as an efficient slicer of high tech materials, or even for the beam’s use as an alternative to radiation therapy for the removal of cancer cells.
The Merlin™ Solar Panel Technology. In early 2014, GTAT announced that it had developed and patented a breakthrough in solar panel design to allow greater collection efficiency, the replacement of most of the silver in the panels with copper and, importantly, much greater efficiency of installation and greater longevity of the panels themselves. GTAT has expanded added production capacity for the technology at its facility in Merrimack, NH. However, due to the size of the market, GTAT has since stated that it will pursue a licensing strategy for third party suppliers to manufacture and sell the copper grid to panel manufacturers.
Also, GTAT has continued a high level of R&D—at 15% of guided 2013 revenues—towards new offerings in the areas of:
* Furnaces to produce defect free silicon carbide for power converters;
* HiCZ™ furnaces and other tools to produce mono-crystalline PV with as high as 27% solar conversion efficiency;
* An improvement to the MOCVD process for building LEDs known as HVPE GaN, through a partnership with Soitec; and
* An automated sapphire inspection tool through a partnership with Intego that can increase the yield of high quality sapphire material from a given boule.
Remaining Sources of Revenue
GTAT had previously guided LED sapphire and polysilicon furnace sales to comprise the bulk of its revenues for 2014, with SiC related sales to comprise only 1%. Interestingly, GTAT never included Apple revenues specifically in its statements of guidance. There may also be nearer term opportunities for the Hyperion tool both in sapphire and in SiC, while most HiCZ and HVPE revenues have been projected for 2014 and beyond.
Investors will have to follow the bankruptcy filings for further company updates.