GT Advanced Technologies, which was expected to produce sapphire crystal screens for the iPhone 6, will cut almost 900 jobs following news last week that it would file for bankruptcy. The company says it is suffering losses to the tune of $1 million daily. GT also announced that it could get engaged in legal battles with Apple as well.

The papers were filed at the United States Bankruptcy Court. The company also asked for closure of its facilities in Massachusetts and Arizona, as well as Bankruptcy protection. The company is now set to sack 890 of its 1,100 strong workforce and shut down its plants in Arizona and Massachusetts. These plants were expected to make the scratch-resistant screens for Apple’s latest smartphones and upcoming Watch devices, due for launch in early 2015.

Reports of the job cuts were announced alongside news that Apple could face legal action from GT owing to “oppressive” and “burdensome” contracts which ultimately led to it file for bankruptcy earlier this week.

It appears that before partnering with Apple, the company was a dominant entity in the solar industry. After GT Technologies decided to collaborate with Apple, it had to shift from an “equipment manufacturer” to a sapphire materials producer.


Everything written down in the papers points to one responsible for GT’s sudden collapse: Apple. The company even claimed that the “oppressive” arrangements imposed on them by the smart-phone manufacturer have proved inharmonious with the company’s business model. These arrangements have ultimately led to the depletion of GT Technologies’ resources.

“As discussed in detail in the Supplemental First Day Declaration, the agreements imposed oppressive and burdensome terms and obligations on GTAT. The contracts and leases…provide no benefit to GTAT’s estates, and GTAT’s continued performance under the Agreements is no longer a viable business option. GTAT has determined that the Agreements are no longer necessary for GTAT’s business operations. The Agreements also are not a source of potential value for GTAT’s future operations, creditors, or interest holders and constitute an unnecessary drain on GTAT’s resources.

One might be inclined to believe that GTAT is making this up simply to get out of a bad deal with Apple, but it seems that the company has actually been struggling in the past months. It is bent on closing its Arizona and Massachusetts facilities as soon as possible (sapphire is being produced at the Arizona facility). The closure of the company will also result in 890 layoffs that Apple is trying to prevent.

The bankruptcy filing will help the company halt these losses and allow it to re-focus on its ability to return to its core business operations of selling products such as sapphire furnaces.

GT added that there are several ways it could make legal claims against the iOS device manufacturer based on the business relationship it has with Apple.

GT, however, added that it has no plans to pursue these claims immediately and would take the legal route to terminate several agreements the company has made with the Cupertino-based firm. According to GT, Apple has been placing an undue burden on the company.

Apple responded saying that it has a commitment to hold GT to its agreements. Apple joined hands with GT to expand its operations in Arizona with an aim to meet capacity demands in producing displays for Apple’s smartwatches.

The sapphire industry showed positive response to the news as shares of rival producer Rubicon Technology rising by close to 23 percent on the Nasdaq index. Rubicon stock is currently trading at $4.93 a share.

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