Apple's sapphire glass supplier is seeking to end its “oppressive and burdensome” contract with the Cupertino company.
The Wall Street Journal reported that sapphire manufacturer GT Advanced Technologies will close two plants in Arizona and Massachusetts, costing 890 people their jobs. GTAT also filed for Chapter 11 bankruptcy and asked the US Bankruptcy Court in New Hampshire to terminate what it described as "oppressive and burdensome" agreements with Apple.
The supplier indicated it is bleeding money after opening a manufacturing plant with Apple last year, and it now wants to shut down that plant as well as end its relationship with Apple. GTAT wants to emerge from bankruptcy and restructure it core businesses, which includes selling sapphire furnaces, and it doesn't want to face anymore pressure from Apple going forward.
“The cash burn at GTAT’s sapphire manufacturing operations for the benefit of Apple is not sustainable,” lawyers for GTAT said in the court filing, while also emphasising that GTAT wants permission to assert further claims against Apple. “GTAT believes that it has many claims against Apple arising out of its business relationship with Apple."
Reports have long said Apple wanted to switch from Gorilla Glass to sapphire. The company already uses sapphire for the Touch ID sensor and some camera lenses, and it is planning to cover Apple Watch faces with the tough-as-nails material. It's unclear how GTAT's bankruptcy will affect Apple in the future, including whether or not Apple Watch can now release on time.
Although Apple has other sapphire suppliers, GTAT is its main source. We've contacted Apple for a comment and hope to update soon.
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