Last year, Apple purchased GT Advanced Technologies for $578 million, after strenuous negotiations concerning the ultra-hard sapphire material producer. On Monday, GT filed for bankruptcy in a federal court, a move that comes only a few weeks after the tech giant revealed that it was no longer using sapphire as a cover for its newer iPhone models displays.
Today’s bankruptcy filing is, however, not connected to Apple’s decision, Ben Bajarin, Creative Strategies analyst says. According to Bajarin, who has recently conversed with materials experts as well as Apple suppliers, sapphire did not represent a proper glass substitute for phones in the sizes the new iPhones are produced in.
“I don’t think that sapphire was planned [for the iPhone], and for quite a while. Eventually it’s a goal, but it’s just not there yet.”
he said during an interview on Monday.
GT Advanced Technologies’ chief executive insisted that the company wasn’t shutting its doors:
“GT has a strong and fundamentally sound underlying business. 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 Tom Gutierrez, CEO and president, in a statement Monday.
The documents that GT filed with the U.S. Bankruptcy Court showed that the company currently had around $85 million in cash available at the end of September, significantly less than what they had on June 28th ($331 million). The company’s assets are estimated at around $1.5 billion and its liabilities at around $1.3 billion.
However, news of the company’s bankruptcy claim was overshadowed by its connection to Apple: GT operates a facility in Arizona, owned by Apple, where it intends on producing large quantities of sapphire to be used in Apple’s iWatch lines.
Bajarin believes that Apple could have come to GT’s rescue as the company had been posting losses for the last four quarters:
“Apple may have known that, but rather than let them die, which would have made one less potential supplier, it gave them a float loan to keep them alive. If GT goes under, that would have left Apple with fewer suppliers, who then may have been able to dictate production and prices.”
the analyst said, while noting that the tech giant may have decided not to help the company it acquired in 2013 because of the multiple sapphire suppliers worldwide (apparently, Apple refuses to be tied to a single supplier).
