GT Advanced Technologies, a sapphire supplier that entered a multiyear deal with Apple last November, has filed for bankruptcy. The troubled company said it had $85 million in cash as of September 29, and was now looking for debtor-in-possession financing to continue operations.
Tom Gutierrez, president and CEO of GT Advanced Technologies, said the company still had a “strong” and “fundamentally sound” 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.”
Last year, Apple signed an agreement with GT Advanced Technologies worth $578 million. Under the deal, Apple provided the cash for the component maker to buy, develop and operate sapphire production equipment that would eventually be used in Apple’s production plants. GT Advanced Technologies was then supposed to reimburse Apple over a five-year period, starting in 2015.
According to AppleInsider, the contract also specified a minimum level of output for GT Advanced Technologies and Apple supply exclusivity. Apple was expected to use sapphire displays in its iPhone 6 and iPhone 6 Plus smartphones this year, but they didn’t materialize.