Apple Works Out Deal to Auction Sapphire-Making Equipment

By selling the sapphire machines, now-bankrupt supplier GT Advanced Technologies will then try to repay a $439 million loan from Apple.

Apple, GT Advanced, sapphire, sapphire display, smartphones, iPhones

Apple has come to an agreement with bankrupt sapphire glass supplier GT Advanced Technologies to auction off sapphire-making machines that Apple had loaned the company $439 million to purchase in 2014.

By auctioning the sapphire-making equipment, GT Advanced, which filed for Chapter 11 bankruptcy protection in October 2014, will then be able to pay back as much of the money as possible, according to a Nov. 3 story by The Wall Street Journal.

GT Advanced's sapphire displays were rumored for months to have been included in the new iPhone 6 models that Apple launched in September 2014, but the super-strong display material was not ready for inclusion in the phones. GT Advanced, which is based in Merrimack, N.H., had filed for Chapter 11 so that it could continue to operate and work toward a reorganization plan to rebuild its business, according to a statement by the company.

"The settlement provides for an auction by Nov. 23 of equipment that GT provided in the effort, the proceeds of which will be divided, GT said in papers filed on Monday in the U.S. Bankruptcy Court in New Hampshire," the Journal reported. "While GT intends to hang on to some of the equipment—as many as 600 sapphire-making furnaces—it is prepared to auction what it can and abandon what it can't cart off, court papers say."

Remaining equipment that is not sold will be scrapped by Apple to help repay the loan, the story reported.

An Apple spokesperson did not immediately respond to an eWEEK inquiry about the reported deal on Nov. 4.

In February 2014, Apple was reportedly ready to fire up a sapphire factory it had financed with then-partner GT Advanced in Mesa, Ariz., so that production could begin for super-strong sapphire screens that were rumored to be included in the iPhone 6 smartphone lines, according to an earlier eWEEK report.

The relationship between the two companies has been strained for some time.

In February 2015, it was reported that Apple was investing about $2 billion to salvage the planned sapphire-making plant in Arizona and turn it into a new data center for Apple, according to an earlier eWEEK story.

The data center conversion for the once-touted sapphire glass plant was revealed months after Apple and GT Advanced ended their planned partnership. GT Advanced was supposed to manufacture special sapphire glass for Apple, but ran into complex production problems that led to the demise of the effort.

The building that was to be used for sapphire production contains more than 1.3 million square feet of space and was aimed at bringing the production of sapphire glass to the United States for Apple. Apple's iPhones, iPads and Mac computers are all built in Asia.

The building, when transformed into a data center, reportedly will employ 150 full-time Apple employees, will create 300 to 500 construction and trade jobs, and will be powered by 100 percent renewable energy.