Optics.org
daily coverage of the optics & photonics industry and the markets that it serves
Featured Showcases
Photonics West Showcase
News
Menu
Business News

GT Advanced re-focuses on equipment

23 Oct 2014

Deal with Apple sees company exit sapphire manufacturing and return to selling crystal-growing kit.

Bankrupt sapphire producer GT Advanced Technologies has reached a settlement with Apple that will see it ditch the new business plan under which it would have become a major provider of sapphire material.

The company said that it would return to its previous area of expertise – selling the equipment needed to produce sapphire crystals, rather than the material itself. “GT will wind down its sapphire materials production in the company's Mesa, Arizona, and Salem, Massachusetts, locations,” it announced.

Included in a filing to the New Hampshire bankruptcy court dealing with the case, the Apple settlement still needs to be approved by the court, but under its terms GT will be released from all exclusivity obligations under the various agreements with Apple that had begun to threaten GT’s very existence.

2063 furnaces for sale?
GT says it will retain ownership of all production, ancillary and inventory assets located in the Mesa facility, while Apple is provided with “a mechanism” for recovering the $439 million that it had loaned to GT to finance the aborted ramp in sapphire crystal production.

The Mesa facility alone had seen 2063 of its “advanced sapphire furnace” (ASF) systems installed to grow the crystal material, as well as all the slicing and testing equipment needed to turn the crystal boules into the thin sheets which had been set to appear in smart phones.

Apple will be paid back, interest-free, through a portion of GT’s sales of ASF systems, while GT will retain control of the related intellectual property and is free to sell its sapphire growth and fabrication technology without restriction.

“GT and Apple will continue their technical exchange involving the development of processes for growing next-generation sapphire boules as GT continues to build on its successfully deployed ASF115 kg technology and expand its range above 165 kg,” it said.

650 laid off already; more to come
CEO Tom Gutierrez said in a GT statement: “We are pleased with the settlement that we have negotiated with Apple. We realize that our filing for Chapter 11 protection has caused uncertainty and hardship for many of our important stakeholders.

“We have been working diligently to develop a restructuring plan that will allow us to emerge from Chapter 11 as quickly as possible and with the operating flexibility and resources to position GT for long-term success.

“This agreement with Apple is an important step in that direction as it will allow us to monetize our advanced sapphire growth and fabrication technologies in an unrestricted manner.”

But that will be cold comfort for the approximately 650 employees that GT has laid off at the apparently doomed Mesa facility. The site, which GT had taken over as a shell before kitting out with sapphire growth furnaces, had previously been constructed by First Solar with an unfulfilled promise of creating hundreds of jobs in the manufacture of thin-film solar products.

A small group of GT employees will remain on board in Mesa to help wind down the facility over the coming months, while further job cuts are already in the pipeline at GT’s Salem site, as well as its Merrimack, New Hampshire headquarters and some of its locations in Asia.

“We recognize and regret the impact that these actions have on our valued employees and their families and we are committed to supporting them through this transition,” Gutierrez concluded.

Coming just 17 days after GT first surprised investors, analysts and Apple alike with its bankruptcy filing, the settlement should mark a key turning point for the company.

Although GT has other large debts on its balance sheet, it should at least be able to continue going about its equipment-selling business without the Apple debt hanging over its finances.

• GT's stock - now listed on the over-the-counter (OTC) market after being de-listed by the Nasdaq exchange last week - rose sharply on the news, although the company's current market capitalization of $90 million remains more than 90 per cent down on the level prior to the chapter 11 bankruptcy filing.

ECOPTIKOptikos Corporation Iridian Spectral TechnologiesABTechBerkeley Nucleonics CorporationJenLab GmbHCHROMA TECHNOLOGY CORP.
© 2024 SPIE Europe
Top of Page