Apple Surprised by GT’s Bankruptcy Filing, Considering Next Steps
In the company’s first public statement regarding the bankruptcy filing by its sapphire partner GT Advanced Technologies earlier this week, an Apple spokesman tells Reuters the company was surprised by the filing and that it is now figuring out its next steps.
“We are focussed on preserving jobs in Arizona following GT’s surprising decision and we will continue to work with state and local officials as we consider our next steps,” spokesman Chris Gaither said.
GT reportedly fell into difficulty when Apple withheld a final $139 million prepayment loan, part of a roughly $580 million package intended to help GT start up operations at the Mesa, Arizona sapphire production plant owned by Apple.
With Apple opting not to use sapphire for the display on the iPhone 6 and under no commitment to purchase sapphire from GT, the sapphire producer quickly started running out of cash. And with repayment on the Apple loan set to start in January, if not sooner, GT found itself needing to enter bankruptcy protection while reorganizing its business.
While the Apple Watch will use sapphire on some models, KGI Securities analyst Ming-Chi Kuo claims GT’s bankruptcy should have no impact on that product as Apple can source sapphire for that product from multiple sources.