Canadian Manufacturing

iPhone glass maker to repay Apple US$439M, documents show

Apple advanced company US$439 million to outfit Mesa, Ariz., sapphire glass manufacturing plant



PHOENIX—Nearly 2,000 furnaces installed in an Arizona factory to make synthetic sapphire glass for Apple Inc. will be removed and sold under a deal between the tech giant and the company that had been gearing up to produce huge amounts of the product for use in Apple’s products.

Documents released by Merrimack, N.H.-based GT Advanced Technologies, Inc. show the company will exit the glass-making business and try to sell the furnaces.

The company filed for Chapter 11 bankruptcy reorganization on Oct. 6 and said it will use the proceeds to repay US$439 million Apple advanced GT to outfit the Mesa, Ariz., plant.

The agreement requires approval from a bankruptcy court judge.

Cupertino, Calif.-based Apple retains the right to buy the furnaces.

Apple announced last November that it was buying a vacant 1.3 million-sq.ft. plant and contracting with GT to operate it to make glass it currently uses only in its iPhone camera lenses and home buttons.

The company never said what uses it planned for the massive new source of glass, but speculation centred on iPhone and iPad screens.

GT, however, had trouble getting the plant up and running, and the new iPhone 6 was released in September with a standard glass screen.

The company is laying off 724 workers at the plant, which will close by the end of the year.

It also is closing a smaller plant in Salem, Mass.

The bankruptcy filing took Apple by surprise.

This week, Apple released a statement saying it “put a lot of effort into an ambitious new sapphire manufacturing process with (the company) which is not ready for production. We’re going to continue evaluating (its) progress on larger sapphire boule development, as well as consider other options for the facility.”

Apple also said it remained committed to the city of Mesa and will work to help laid-off GT employees find new jobs.

GT used the furnaces to make large chunks of synthetic sapphire that could then be made into various components.

The company plans to focus now just on making equipment used in the process.

Arizona Gov. Jan Brewer had hailed Apple’s decision to open the plant in Mesa, calling it a sign that the Arizona’s efforts to provide a pro-business climate were paying off.

The state offered Apple a raft of incentives to land the facility, which was built by First Solar, Inc., but it never opened after the solar panel manufacturer changed its plans.

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