GT Advanced Technology (GTAT) was suffering from sapphire yield issues at its Arizona production plant, according to a consensus of financial analysts and equipment suppliers that PV Tech spoke to during Solar Power International, held in Las Vegas last week.
GTAT had been booked to exhibit at SPI this year but organisers told PV Tech the company cancelled their booth at short notice after filing for chapter 11 bankruptcy.
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Despite prolonged efforts, equipment upgrades and process development undertaken by GTAT to meet quality, cost and yield parameters with stakeholders, the consensus was that yield issues had proved the most problematic to overcome and would have required further furnace redesign and development, taking an unspecified time to accomplish.
As a result, this prevented Apple from deploying sapphire screens to its new range of iPhones and led to GTAT’s bankruptcy.
During the week of SPI, GTAT announced the closure of the sapphire plant in Mesa, Arizona and Salem, Massachusetts and exit from the market as a producer of sapphire materials. Instead, the company would refocus on manufacturing and developing sapphire growth systems and processes, after reaching an agreement with Apple and subject to court approval.
The closures were with immediate effect and would result in around 740 job losses at the plant as well as an unspecified number of GTAT jobs at Salem and in Asia, according to the company.
The knock-on effect was the announcements from manufacturing partners, Manz and Meyer Burger to reduce headcounts at the Arizona plant.
PV Tech had previously disclosed that Manz had become the largest supplier creditor, owed US$21.2 million, according to GTAT court filings.
Meyer Burger said last week that its Colorado Springs facility, established specifically to meet GTAT’s sapphire cutting and shaping requirements would lead to a workforce reduction of 105 staff at this site.
However, Meyer Burger noted that the facility would still employ around 200 people and would continue to offer slicing solutions and diamond wire technology for the solar and sapphire sectors.
In an SEC filing, GTAT noted that the closure and job losses would amount to around US$5.6 million in one-time termination costs, leaving around 70 staff to manage the closure of the plant. Other charges related to the closure were not specified, due to a full appraisal yet to be completed by the company.
However, several equipment suppliers told PV Tech that Apple was seeking another partner to operate the sapphire plant and that negotiations were ongoing.
Companies and financial analysts requested anonymity to PV Tech in discussing the issues surrounding the Apple and GTAT sapphire business collapse.
