Apple, GT Advanced Technologies in agreement on sapphire materials
11:25a ET October 23, 2014 (MarketWatch)
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Apple, GT Advanced Technologies in agreement on sapphire materials
By Peg Brickley and Daisuke Wakabayashi
GT Advanced Technologies Inc. and Apple Inc. announced Thursday they reached an agreement on terms for the wind-down of sapphire materials production in GT's Mesa, Ariz. and Salem, Mass. locations.
First mentioned in court, the pact is termed a "settlement" by Apple, which didn't use sapphire from GT Advanced (GTATQ) for its latest generation smartphones.
In a statement from an Apple (AAPL) spokeswoman, the company said, "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."
After filing for Chapter 11 protection Oct. 6 in U.S. Bankruptcy Court in Manchester, N.H., GT Advanced said it would get out of the business of making sapphire materials.
According to a news release from GT Advanced, the settlement with Apple releases GT from "exclusivity obligations under its various agreements with Apple." GT will own "production, ancillary and inventory assets located in Mesa" under the pact. Apple, in return, gets "a mechanism for recovering its $439 million prepayment made to GT."
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