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GT Advanced Technologies, the company that recently filed for bankruptcy, is now having to deal with the threat of a hefty fine from Apple, to the tune of $50 million.
GTAT was acting as Apple’s Sapphire glass provider, the type of glass that is used in parts of the camera, and Touch ID on the iPhone. Apple could have fined the company for leaking information that it wanted to keep under-wraps, but importantly, the fine is perfectly reasonably based on the contract between the two companies – and it can apply to every breach of confidentiality.
This creates a number of logistical problems for Apple’s partners, which not only have to make sure none of its employees leak information about the upcoming products, but also have to make sure that the supply chain itself isn’t liable to snooping. This is what GTAT is using as ammunition in its case against Apple, in which it claims that its “contractual demands for secrecy” gives it “disproportionate power”.
GTAT also revealed that the Arizona plant cost $1 million a day to run and that it plans to close the plant by December 31, incurring the loss of 890 jobs.
Apple has a number of different options when it comes to supplying Sapphire glass for its forthcoming Apple Watch, and shouldn’t affect existing product lines.