GT Advanced Technologies, the company that supplies Apple with Sapphire glass, has filed for bankruptcy.
In a statement made by Tom Gutierrez, president of GTAT, the company that supplies the glass for the Touch ID button technology on the iPhone 5s and later, said that the company filed for bankruptcy from 6 October.
“Today’s filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet,” said Gutierrez. “We are convinced that the rehabilitative process of chapter 11 is the best way to reorganize, protect our company and provide a path to our future success. We remain committed to our roots in innovation and our diversification strategy. We plan to continue to operate as a technology leader across our core set of businesses.”
It’s possible that the omission of Sapphire from the iPhone 6 and 6 Plus displays, which were rumored to be part of the production, is what contributed to the move, as it was also rumored that internal problems meant they couldn’t supply Apple with the amount of crystal needed. The iPhone 6 and 6 Plus instead featured Corning’s Gorilla Glass, as it had done previously.
As Gutierrez’s statement says, the company is still able to do business, and GTAT are to provide Apple with the Sapphire glass needed to produce their Watch displays next year. The material is also used, as well as for Touch ID, for camera components on the iPhone 5S, 6 and 6 Plus.
GTAT’s shares plummeted 93% on Monday and its cash level was at $85 million on September 29 – if they had more than $125 million then Apple would have been contractually allowed to reclaim the $440 million already handed over in order to get Sapphire production up and running at a factory in Mesa, Arizona.
No one knows yet whether Apple is going to look into an alternative provider of the crystal display.