The glass-happy technology giant Apple may be facing some changes to its development of sapphire “glass” production.
Apple recently purchased a former solar panel manufacturing site in Mesa, Ariz. and leased the space out for more than $500 million to GT Advanced Technologies (GTAT), a technology company that was reportedly producing sapphire for future Apple products.
GTAT, however, filed for bankruptcy last week, and by the end of the week said in court filings that it has made plans to close the Mesa site, as well as another facility in Salem, Mass.
“[T]he cash burn at GTAT’s sapphire manufacturing operations for the benefit of Apple is not sustainable,” court documents read. “Therefore, after a careful evaluation of all alternatives, and in consultation with its advisors, GTAT has determined that in order to preserve the value of its estates it must wind down its sapphire manufacturing operations in Mesa, Arizona, and Salem, Massachusetts, with reductions in associated supporting personnel at GTAT’s Merrimack, New Hampshire, offices.”
Just a few months ago, the GTAT-Apple relationship seemed to be strong.
During a quarterly-earnings conference call with investors in August, GTAT CEO Tom Gutierrez said the build-out of the Arizona facility—which, at one point, saw 1,200 construction workers working on it—had been nearing completion and was expected to be fully operational by early 2015.
However, in recent court filings, GTAT states it is looking to take a substantial bite into its contract with Apple due to what it says are unsustainable conditions.
“Concurrently with the filing of this Motion, GTAT has also filed a separate motion seeking to reject a series of Apple agreements related to these operations that will no longer be required,” the filing reads.
According to GTAT, approximately 890 jobs will be lost in the “wind down.”
“We are focused on preserving jobs in Arizona following GT(AT)’s surprising decision,” Apple spokesperson Chris Gaither told USGNN.com™, “and we will continue to work with state and local officials as we consider our next steps.”
Former Mesa mayor Scott Smith told the Phoenix Business Journal that he’s taking a wait-and-see approach to the situation given Apple’s investment, as he says the company has made clear its commitment to sapphire.
“Apple owns the building, and has over a half a billion dollars invested in that site,” says Smith. “Most of it were advances to GT(AT) to finance the equipment and the build-out of the facility. That’s a pretty big commitment to just walk away from. Maybe we should just wait and watch and see how Apple responds to it.”
Meanwhile, on the architectural front, company was awarded a patent last month by the US Patent and Trademark Office for its well-known glass cube building design, as featured at its flagship Manhattan store. The glass cube patent comes roughly a year after the company was awarded a patent on the glass staircase design used in Apple stores. Apple also has an architectural patent on a glass cylinder design for its flagship Shanghai store.
USGNN.com™ had reached out to Apple after the patent was awarded for comment regarding its recent interest in glass architecture, but the company didn’t respond at the time.