According to documents submitted to the U.S. Bankruptcy Court, GTAT will auction the sapphire manufacturing equipment originally acquired for Apple's sapphire screens. GT will retain up to 600 sapphire manufacturing furnaces, and all unsold projects will be disposed of by Apple. A year ago, GT announced that they planned to sell more than 2,000 furnaces at the Arizona plant to pay off debt, but they were unable to sell any of them, forcing them to go to auction.
GTAT originally spent about US$900 million to build a sapphire factory in Arizona, of which Apple paid US$439 million in advance. With this agreement, Apple will reduce the cost of the original cooperation between the two parties. The loan was provided to GT, while the proceeds from the auction of the furnace were to be divided equally between both parties. GT laid off 700 employees after declaring bankruptcy. Earlier this year, GT laid off another 40% of its employees.
Sapphire is harder than glass, so Apple loaned GT money to produce materials for the next generation of iPhones. But something went wrong in the middle. Whether it was GT saying that Apple had been changing specifications and requirements, or Apple claiming that GT was incapable of meeting the standards, GT was stuck with no customers and heavy loans.
The Wall Street Journal pointed out that GT expects to sell these furnaces before December 31. The best option is to invite bidders to participate in the auction, which will be held on November 23. Before GT and Apple can enter the auction process, they still need to wait for the bankruptcy judge to sign off on the plan.
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