back to article SHATTERED: Apple's jilted glass supplier to shut down sapphire ops

GT Advanced Technologies, the struggling materials firm that was once tapped to provide durable sapphire glass for Apple, says it will cut staff and close its sapphire manufacturing plants as it moves toward bankruptcy protection. In documents filed with the New Hampshire bankruptcy court on Friday, GT said the "cash burn" at …

  1. Mark 85

    Simples....

    All they have to do is give Apple one or all of the sapphire glass plants in exchange for the debt writedown. Should be fair since they built it to supply Apple, right?

    1. Anonymous Coward
      Anonymous Coward

      Re: Simples....

      Well it is as close to fair as it'll get for either side, but Apple will still have to find someone to operate the plant for them. Making sapphire boules is a bit outside their corporate competency.

  2. John Smith 19 Gold badge
    Unhappy

    Shock news. Startup pins whole business plan on single big order and gets screwed.

    Especially Apple, not known for their generous supplier arrangements.

    I'll wish them better luck this time round.

    1. Anonymous Coward
      Holmes

      Shock news.

      Tim Cook is the new Bill Gates.

      Let the lawsuits fly.

    2. John Tserkezis

      Re: Shock news. Startup pins whole business plan on single big order and gets screwed.

      Agreed, but this looks worse for GT than it does for Apple.

      Remember GT signed off on those "oppressive and burdensome terms and obligations". Even if they were "oppressive and burdensome", the time to complain is BEFORE you sign.

      1. Anonymous Coward
        Holmes

        Re: Shock news. Startup pins whole business plan on single big order and gets screwed.

        @John Tserkezis - English and American law have the concept of the "unconscionable contract" - a contract with terms that are so one-sided and unfair to the relatively weaker party that they are unenforceable because no reasonable person would otherwise agree to them.

        In England it is referred to as "inequality of bargaining power", and courts won't enforce such contracts because they are considered exploitative of the relatively weaker party.

        You could imagine that if you are a small specialty glass supplier worth a few million bucks, and Apple comes along and dangles a billion dollar opportunity under your nose, it's quite possible you would feel compelled to agree to any terms they offer, no matter how unconscionable or exploitative they actually are. If such is the case, GT can request relief from the court, probably including payment of sums of money that the court finds that GT reasonably relied on under the legal doctrine of promissory estoppel, otherwise known as "detrimental reliance".

        Anyway - there's a lot of case law that says GT may come away with a bunch of money if they can prove certain facts about the contract.

        1. RR1

          Re: Shock news. Startup pins whole business plan on single big order and gets screwed.

          I can't comment with any confidence on the American position but in the UK simple "inequality of bargaining power" is not a reason to set aside the terms of a contract. There are high standards of protection in business to consumer sales in the UK but for b2b contracts it's not quite the case of "you agreed to it, your bound by it" but it's pretty close, the law doesn't protect you simply because it was dumb to agree to something. This said, the position in UK law and possibly the position in the USA is that if any of the clauses about breach amount to a "penalty clause" (where the penalty is so big it's just designed to scare you and isn't a reasonable pre-estimate of loss) then they would be unenforceable - but that's about the clause not about the relative strength of the parties.

        2. JeffyPoooh
          Pint

          Re: Shock news. Startup pins whole business plan on single big order and gets screwed.

          Perhaps GT could prove that they clicked through the "I Agree" button while much of the contract wasn't visible on their iPhone 4's smaller screen.

  3. Anonymous Coward
    Anonymous Coward

    Sapphire is unnecessary for the application

    There was no good reason to use sapphire in the first place. Gorilla glass has proven to be more than robust enough, especially considering the typical lifecycle of a smartphone.

    1. Gene Cash Silver badge
      FAIL

      Re: Sapphire is unnecessary for the application

      I'm glad we've got people like you, innovating and keeping technology moving forward.

      1. imanidiot Silver badge

        Re: Sapphire is unnecessary for the application

        Innovation does not come from using barely more suitable materials just for the hell of it. Innovation comes from using materials in ways nobody ever thought of before. Using sapphire glass on smartphones I would hardly call innovative.

      2. TitterYeNot
        Coat

        Re: Sapphire is unnecessary for the application

        "I'm glad we've got people like you, innovating and keeping technology moving forward."

        Agreed, what a luddite. If Apple had just gone with the crowd and used boring and predictable alternatives like Gorilla glass, we wouldn't have innovative new technologies like bendy glass. <Cough>

        OK, OK, I'm going. Mine's the one with the very big, loose pockets...

    2. Mage Silver badge

      Re: Sapphire is unnecessary for the application

      I don't believe sapphire can't work anyway, it's more brittle. Only suitable for small screens. This is the reason no-one is doing it.

      1. Sork

        Re: Sapphire is unnecessary for the application

        It may interest you to learn that GT Advanced owns a device called the Hyperion Ion Cannon that can be used to create very thin slices of sapphire for laminating to stronger glass, something outlined in an Apple patent.

        You can read all about this in a Tech Crunch article – http://techcrunch.com/2013/11/11/apple-fires-its-ion-cannons/

      2. JimWin
        Unhappy

        Re: Sapphire is unnecessary for the application

        I smashed my Seiko watch screen while on holiday. Turns out it used sapphire glass. Replacement for the screen (plus other bits) was £100. So it's not indestructable - even on a small screen. It would clearly be more prone to cracking on a larger screen and any replacement would probably be much more expensive and difficult to fit.

      3. cray74

        Re: Sapphire is unnecessary for the application

        "I don't believe sapphire can't work anyway, it's more brittle. Only suitable for small screens. This is the reason no-one is doing it."

        The big panes of glass covering the optics and laser designator in this picture...

        http://www.lockheedmartin.com/us/products/Sniper.html

        ...are slabs of artificial sapphire about the size and thickness of a complete iPad. The only time I've seen a pane broken in service was when the nose shroud of a Sniper pod was returned from Britain for repair. The UK didn't explain, but the steel casing was scoured like it had been dragged over pavement; the paint was scorched; and the interior was packed with mud and fire retardant that had entered through the one broken pane (of 4 on the pod). The popular conclusion was "a belly landing or crash that dragged the pod down the runway under a rather distressed aircraft that was later sprayed with firefighting foam."

        The Sniper pod is not the only military application of large sapphire panes (nor are its panes the largest in service). After Desert Storm showed that all those fancy 1980s smart weapon optics were sandblasted into translucency by the Middle East's sand, the US military (and others, I'm sure) worked to find harder optical material. Sapphire was one, while SiAlON was another. It took about a decade to bring those to maturity and they began entering service in the early 2000s. There was an expensive learning curve.

        Of course, there's a huge difference between a military customer who is willing to pay for an 80% rejection rate to have get good sapphire panels for a small amount of kit, and a consumer goods manufacturer who wants millions of sapphire panels each year for a few dollars each.

  4. A Non e-mouse Silver badge

    Everyone is missing the bigger story here

    That Apple have broken their vow of silence and have spoken to El Reg!

    1. J. R. Hartley

      Re: Everyone is missing the bigger story here

      Yes, I spat out my creme de menthe when I read that part of the article.

      1. Puzzeled European
        Pint

        Re: Everyone is missing the bigger story here

        Now that was strange.

        Beer is in order!

  5. Hud Dunlap
    Megaphone

    But the CEO made money.

    From an earlier El Reg article.

    Thomas Gutierrez, CEO of the stricken firm, reportedly flogged off 700,000 shares since February, amounting to more than $10m.

    Hmm.

    1. A Non e-mouse Silver badge

      Re: But the CEO made money.

      There's a WSJ story where they say that the sale was pre-planned back in March. In fact, the CEO has been regularly selling stock at the start of the month. Seeing as his company's stock had doubled in 12 months, it seems a sensible investment strategy to sell some off.

  6. illiad

    looks like its gonna be VERY difficult for apple to invest in any 'super new tech' now...

    "you want me to make WHAT??? "

    "the economics of that is dubious, pay me the FULL price, or forget it, I remember GT... >:( "

  7. Anonymous Coward
    Meh

    With the above in mind...

    ...is it any wonder that the money-grabbing wotsits at the fruity firm go legging it to China where it's cheaper?

    Not saying they're right, but if they do to others what they're alleged to have done to GT, this shouldn't be that much of a surprise.

    Only sayin'.

  8. Tim Worstal

    The real it about this

    Is that GT was previously a manufacturer of the machines to make the sapphire boules and then to cut them. Good machines too.

    Then they said we've got this next generation of machines that are much better. So, let's go into business producing sapphire, not just the machines to make sapphire. So they do and they sign up with Apple.

    And it turns out that the new machines aren't quite as good as they thought they were. Oh Dear.

    Have I told you that my office is in the building of a sapphire producer?

  9. Stuart Elliott
    Coat

    We are focused on preserving jobs in Arizona

    Guess that just means they're moving Steve's corpse?

    Also when they turn the lights off at the Mesa plant, will that make it Black Mesa ?

  10. Anomalous Cowshed

    We may argue about who is right and who is wrong...

    ...and whether sapphire glass is the future or not...

    But one thing is sure: the only people who will benefit now from this story are the lawyers.

    At times like this, it must be good to be a lawyer. The longer the fighting, the pain and the trouble lasts, the greater your fee, the bigger your house, the most expensive your new suit and the diamond ring for the wife.

    Technology? Shmecknology! <corny cash register sound>

    1. Player_16

      Re: We may argue about who is right and who is wrong...

      Corny cash register sound?

      Ka-ching!

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like