GT Advanced is bankrupt. It's only customer was Apple. It's selling off its manufacturing furnaces. Exactly how is it going to make the money to pay back Apple over the next four years?
If Apple wants to use GT Advanced sapphire in iDevices, it'll need to take over the company and make the investment required to make that mass-production sapphire. The money isn't going to float in out of thin air.
Apple was not its only customer.
GT Advanced has customers for their other businesses: photovoltaic, polysilicon, power electronics, etc. Unfortunately, business in their other industries was declining, so likely GT Advanced took a gamble on jumping into the sapphire production business, and lost.
Note that GT Advanced still hopes to stay in the sapphire tool business. It's like GT Advanced tried to build a bakery and failed in baking cakes and bread, however still wants to sell ovens.
GT Advanced has customers for their other businesses: photovoltaic, polysilicon, power electronics, etc. Unfortunately, business in their other industries was declining, so likely GT Advanced took a gamble on jumping into the sapphire production business, and lost.
Note that GT Advanced still hopes to stay in the sapphire tool business. It's like GT Advanced tried to build a bakery and failed in baking cakes and bread, however still wants to sell ovens.
They've probably learned a lot over the last year.
Don't know what these furnaces sell for normally, but for the purposes of this sale/repayment plan, they'd need to get about $220,000 apiece just to make up the debt. That's not including earning money to cover any other expenses they have, so the price would likely need to be substantially higher.
Apple went into this contract with its eyes wide open.
Oh yeah, I'm sure Apple was aware of the risk. By "screwed" I meant they lost the bet, not that they didn't know it was a gamble. Half a $B here, half a $B there, and pretty soon you're talking about real money.
This was probably as simple as optimistic technological expectations not panning out.
While this happens all the time in industry something just doesn't add up here. You don't build out a massive factory until the process is proven in some manner.
GTAT was at fault to the extent that they signed a ridiculously 1-sided contract with Apple. But that probably had a lot to do with the fact that it is unlikely that there was any other company who could have provided them with the resources to build such a facility out in the first place.
It isn't really that one sided of a contract. It is the norm to lock your suppliers in with material penalties
The funny thing here is this, if the process doesn't work then what value do the furnaces have. GT wants to sell this stuff to repay Apple but who would buy the machines if they don't work. If the manufacturing equipment has value then making of the sapphire wasn't the proble which would lead those etching down the line causing grief.
It seems Apple has a bad track record with identifying new breakout materials.
Why would you say that.
First LiquidMetal and now Sapphire. At least I got the appeal of LiquidMetal, in that it would allow them to do a lot of cool new things.
At least the Liquid Metal guys tried to manage expectations. It is the media that went wild with speculation here.
I don't even get the appeal of Sapphire to Apple. Spend a lot of money using a more expensive, tougher to produce, slightly harder but slightly more brittle alternative to a cheap existing alternative?
Sapphire is a hot technology. You can literally make windows that will stop a 50 caliber round. It is the transparent aluminum from Star Trek. If the technology had panned out we might be looking at a dramatically new way to build cell phones. In fact I'd be surprised if Apple has given up totally on this tech.
That's contrary to Tim Cook's philosophy. Apple does not manufacture components, nor do they do final assembly. Shortly after Tim joined Apple, the company got out of the manufacturing business.
Manufacturing is a low-margin industry, and there is frequent need for massive capital investment for new equipment. Apple is basically a software company who applications and services run best on their own proprietary designs. They are hardware design experts, let the component vendors battle it out for a slice of the pie, whether it be silicon, screens, an RF filter, camera module, whatever.
It's like the difference between being an architect, a toilet seat cover maker, and a construction company.
I'd argue that Apple'S expertise is not software, but systems integration and design; they're bringing systems to the masses. They prefer letting others build the blocks they assemble to their specs and then insure they mesh well together. The only big holdout is Software, maybe because software is the framework for this integration and thus they can't really outsource that block.
There are no company really doing something similar in the consumer space.
That's contrary to Tim Cook's philosophy. Apple does not manufacture components, nor do they do final assembly. Shortly after Tim joined Apple, the company got out of the manufacturing business.
Manufacturing is a low-margin industry, and there is frequent need for massive capital investment for new equipment. Apple is basically a software company who applications and services run best on their own proprietary designs. They are hardware design experts, let the component vendors battle it out for a slice of the pie, whether it be silicon, screens, an RF filter, camera module, whatever.
It's like the difference between being an architect, a toilet seat cover maker, and a construction company.
I know Steve said Apple was a software company and many people say they buy Apple hardware because of the software but I would argue they're much more of a hardware company. The biggest advancements they've been making are in chip design and advanced manufacturing techniques like friction stir welding with the iMac and what they did with the new Mac Pro. And with the ?Watch what's really impressive again is hardware; the S1 computer on a chip. The custom designed bands that are as good as high end watches.
I think Apple has lots of work to do on the software side of things. I look at that new email app from Google and wonder why isn't Apple doing stuff like that? And I use plenty of 3rd party apps that are much better designed than any first party iOS app. I would love to see Apple put a focus on making their software best in class again.
It seems Apple has a bad track record with identifying new breakout materials. First LiquidMetal and now Sapphire. At least I got the appeal of LiquidMetal, in that it would allow them to do a lot of cool new things. I don't even get the appeal of Sapphire to Apple. Spend a lot of money using a more expensive, tougher to produce, slightly harder but slightly more brittle alternative to a cheap existing alternative?
youre speculating. we really dont know the pros & cons of the sapphire projects apple has in mind. they were awarded a patent having to do w/ composite layering, so any assumptions you have about raw sapphire may or may not be relevant to their intended processes.
further, i dont know personally that LiquidMetal was a failure, since i dont work inside apple engineering. doubt anybody on this forum does, either. folks assumed and liked to talk about it being used as the main body, but again -- its speculation because we just dont know. we're on the outside, and not even looking in.
Sorry Apple but that's a sad excuse. Why not just buy a plant to manufacture sapphire then? You certainly can afford to.
a sad excuse for what? what claims are you referring to, specifically? cuz none were made. since we dont work inside apple product design, we dont know what their projects or intentions are.
but we know yours -- a desire to be resident Troll-in-Chief.
Oh yeah, I'm sure Apple was aware of the risk. By "screwed" I meant they lost the bet, not that they didn't know it was a gamble. Half a $B here, half a $B there, and pretty soon you're talking about real money.
But they didn't lose half a billion dollars. Assuming this fire sale -- err, furnace sale pans out, they won't have lost any money except the interest they could have made on that half $B on another investment. Not even close to talking about "real money" for Apple. Assuming the sale pans out.
That's contrary to Tim Cook's philosophy. Apple does not manufacture components, nor do they do final assembly. Shortly after Tim joined Apple, the company got out of the manufacturing business.
Manufacturing is a low-margin industry, and there is frequent need for massive capital investment for new equipment. Apple is basically a software company who applications and services run best on their own proprietary designs. They are hardware design experts, let the component vendors battle it out for a slice of the pie, whether it be silicon, screens, an RF filter, camera module, whatever.
It's like the difference between being an architect, a toilet seat cover maker, and a construction company.
A lot of it is about accounting. Sure there is tremendous expense related to manufacturing, but also tax liability. If Apple owned its own manufacturing it has to account for inventory and components on hand in a different way, which hurts its quarterly earnings.
So, Apple was also pushing the envelope for a "new method" and "ambitious manufacturing process" that just wasn't there yet? Does that mean GTAT is not the sole perpetrator in the downfall? Just adds another dimension to the tale....
There is no tale here. Have you ever had a job or been in business. Companies like GT bid for contracts and usually promise the world to the the money and contract. GT failed to do what they promised Appke they can do. What part of that is not clear to your pea brain?
I know Steve said Apple was a software company and many people say they buy Apple hardware because of the software but I would argue they're much more of a hardware company. The biggest advancements they've been making are in chip design and advanced manufacturing techniques like friction stir welding with the iMac and what they did with the new Mac Pro. And with the ?Watch what's really impressive again is hardware; the S1 computer on a chip. The custom designed bands that are as good as high end watches.
I think Apple has lots of work to do on the software side of things. I look at that new email app from Google and wonder why isn't Apple doing stuff like that? And I use plenty of 3rd party apps that are much better designed than any first party iOS app. I would love to see Apple put a focus on making their software best in class again.
Reason why Google can do that and Apple can't (at least not yet) is Google excels at three areas that Apple is weak, or weaker, at - cloud infrastructure / architecture, search, machine learning / AI. That's the same reason that makes Google Now so powerful, not only as an assistant but contextually based services as well.
So someone tell me, "Who the heck is going to purchase 2,000 of these machines?"
I think there are only a handful of these things in existence now. Apparently they didn't work, or at least GTAT couldn't get them to work for Apple. Apple would have been the logical purchaser of any machines, but that's not in cards now.
Put some Apple management in the building. Keep the furnaces so they can't be used for competitors. Control it from the top only. This is the future for when silicon gives way to Saphire. Hold onto it. Keeps the jobs in this country and work forward with Tech.
It was obviously mismanagement. Get someone in there who can actually manage it. Sometimes those who make the bricks can't make a building.
This material is the future. ...and no I don't own any stock. I just hate seeing advancement dissolve into nothing. At best, these furnaces will be purchased and continue to produce saphire. At worst, they will retrofitted for a different industry.
So someone tell me, "Who the heck is going to purchase 2,000 of these machines?"
I think there are only a handful of these things in existence now. Apparently they didn't work, or at least GTAT couldn't get them to work for Apple. Apple would have been the logical purchaser of any machines, but that's not in cards now.
They can be repurposed, although I would prefer they continue to produce saphire.
Put some Apple management in the building. Keep the furnaces so they can't be used for competitors. Control it from the top only. This is the future for when silicon gives way to Saphire. Hold onto it. Keeps the jobs in this country and work forward with Tech.
It was obviously mismanagement. Get someone in there who can actually manage it. Sometimes those who make the bricks can't make a building.
This material is the future. ...and no I don't own any stock. I just hate seeing advancement dissolve into nothing. At best, these furnaces will be purchased and continue to produce saphire. At worst, they will retrofitted for a different industry.
Serious question, what is being said about the future of sapphire as a material, or what search terms might one try?
Sorry Apple but that's a sad excuse. Why not just buy a plant to manufacture sapphire then? You certainly can afford to.
Technically, due to pormisarry notes, they have one. It's totally up to Apple right now as to how it will progress with this. Selling off the furnaces is not in their best interest, however they want to continue their "Lazer" like focus on future development. If Jonny has worked with Saphire that's great. I want the hardware and the newly purchased (maybe last year) Ram/chip design team to work with it. IBM has done extensive research on the memory capabilities of crystals (Quartz mostly). Saphire is 4 times better. Also, as they get down to extremely fragile tolerances in silicone, Saphire well overperforms. It's a future tech with 2000 furnaces to sell.
Comments
GT Advanced is bankrupt. It's only customer was Apple. It's selling off its manufacturing furnaces. Exactly how is it going to make the money to pay back Apple over the next four years?
If Apple wants to use GT Advanced sapphire in iDevices, it'll need to take over the company and make the investment required to make that mass-production sapphire. The money isn't going to float in out of thin air.
Apple was not its only customer.
GT Advanced has customers for their other businesses: photovoltaic, polysilicon, power electronics, etc. Unfortunately, business in their other industries was declining, so likely GT Advanced took a gamble on jumping into the sapphire production business, and lost.
Note that GT Advanced still hopes to stay in the sapphire tool business. It's like GT Advanced tried to build a bakery and failed in baking cakes and bread, however still wants to sell ovens.
Seems like a company that specializes in sapphire products should've known the risks?
Apparently the c-level execs at least knew when to cash out.
I still think there needs to be an SEC investigation of those stock sales right before the company declared bankruptcy.
I totally agree. I wonder if this whole thing was a scam by those c-level guys.
The c-level people in a lot of companies are just high class con-men.
Apple was not its only customer.
GT Advanced has customers for their other businesses: photovoltaic, polysilicon, power electronics, etc. Unfortunately, business in their other industries was declining, so likely GT Advanced took a gamble on jumping into the sapphire production business, and lost.
Note that GT Advanced still hopes to stay in the sapphire tool business. It's like GT Advanced tried to build a bakery and failed in baking cakes and bread, however still wants to sell ovens.
They've probably learned a lot over the last year.
Don't know what these furnaces sell for normally, but for the purposes of this sale/repayment plan, they'd need to get about $220,000 apiece just to make up the debt.
That's not including earning money to cover any other expenses they have, so the price would likely need to be substantially higher.
Maybe eBay? Or AliBaba?
Apple got screwed?
Apple went into this contract with its eyes wide open.
Oh yeah, I'm sure Apple was aware of the risk. By "screwed" I meant they lost the bet, not that they didn't know it was a gamble. Half a $B here, half a $B there, and pretty soon you're talking about real money.
It isn't really that one sided of a contract. It is the norm to lock your suppliers in with material penalties
The funny thing here is this, if the process doesn't work then what value do the furnaces have. GT wants to sell this stuff to repay Apple but who would buy the machines if they don't work. If the manufacturing equipment has value then making of the sapphire wasn't the proble which would lead those etching down the line causing grief. Why would you say that. At least the Liquid Metal guys tried to manage expectations. It is the media that went wild with speculation here. Sapphire is a hot technology. You can literally make windows that will stop a 50 caliber round. It is the transparent aluminum from Star Trek. If the technology had panned out we might be looking at a dramatically new way to build cell phones. In fact I'd be surprised if Apple has given up totally on this tech.
That's contrary to Tim Cook's philosophy. Apple does not manufacture components, nor do they do final assembly. Shortly after Tim joined Apple, the company got out of the manufacturing business.
Manufacturing is a low-margin industry, and there is frequent need for massive capital investment for new equipment. Apple is basically a software company who applications and services run best on their own proprietary designs. They are hardware design experts, let the component vendors battle it out for a slice of the pie, whether it be silicon, screens, an RF filter, camera module, whatever.
It's like the difference between being an architect, a toilet seat cover maker, and a construction company.
I'd argue that Apple'S expertise is not software, but systems integration and design; they're bringing systems to the masses. They prefer letting others build the blocks they assemble to their specs and then insure they mesh well together. The only big holdout is Software, maybe because software is the framework for this integration and thus they can't really outsource that block.
There are no company really doing something similar in the consumer space.
I know Steve said Apple was a software company and many people say they buy Apple hardware because of the software but I would argue they're much more of a hardware company. The biggest advancements they've been making are in chip design and advanced manufacturing techniques like friction stir welding with the iMac and what they did with the new Mac Pro. And with the ?Watch what's really impressive again is hardware; the S1 computer on a chip. The custom designed bands that are as good as high end watches.
I think Apple has lots of work to do on the software side of things. I look at that new email app from Google and wonder why isn't Apple doing stuff like that? And I use plenty of 3rd party apps that are much better designed than any first party iOS app. I would love to see Apple put a focus on making their software best in class again.
It seems Apple has a bad track record with identifying new breakout materials. First LiquidMetal and now Sapphire. At least I got the appeal of LiquidMetal, in that it would allow them to do a lot of cool new things. I don't even get the appeal of Sapphire to Apple. Spend a lot of money using a more expensive, tougher to produce, slightly harder but slightly more brittle alternative to a cheap existing alternative?
youre speculating. we really dont know the pros & cons of the sapphire projects apple has in mind. they were awarded a patent having to do w/ composite layering, so any assumptions you have about raw sapphire may or may not be relevant to their intended processes.
further, i dont know personally that LiquidMetal was a failure, since i dont work inside apple engineering. doubt anybody on this forum does, either. folks assumed and liked to talk about it being used as the main body, but again -- its speculation because we just dont know. we're on the outside, and not even looking in.
Sorry Apple but that's a sad excuse. Why not just buy a plant to manufacture sapphire then? You certainly can afford to.
a sad excuse for what? what claims are you referring to, specifically? cuz none were made. since we dont work inside apple product design, we dont know what their projects or intentions are.
but we know yours -- a desire to be resident Troll-in-Chief.
I wonder what value the furnaces are if the product was unusable for Apple?
Oh yeah, I'm sure Apple was aware of the risk. By "screwed" I meant they lost the bet, not that they didn't know it was a gamble. Half a $B here, half a $B there, and pretty soon you're talking about real money.
But they didn't lose half a billion dollars. Assuming this fire sale -- err, furnace sale pans out, they won't have lost any money except the interest they could have made on that half $B on another investment. Not even close to talking about "real money" for Apple. Assuming the sale pans out.
That's contrary to Tim Cook's philosophy. Apple does not manufacture components, nor do they do final assembly. Shortly after Tim joined Apple, the company got out of the manufacturing business.
Manufacturing is a low-margin industry, and there is frequent need for massive capital investment for new equipment. Apple is basically a software company who applications and services run best on their own proprietary designs. They are hardware design experts, let the component vendors battle it out for a slice of the pie, whether it be silicon, screens, an RF filter, camera module, whatever.
It's like the difference between being an architect, a toilet seat cover maker, and a construction company.
A lot of it is about accounting. Sure there is tremendous expense related to manufacturing, but also tax liability. If Apple owned its own manufacturing it has to account for inventory and components on hand in a different way, which hurts its quarterly earnings.
There is no tale here. Have you ever had a job or been in business. Companies like GT bid for contracts and usually promise the world to the the money and contract. GT failed to do what they promised Appke they can do. What part of that is not clear to your pea brain?
I know Steve said Apple was a software company and many people say they buy Apple hardware because of the software but I would argue they're much more of a hardware company. The biggest advancements they've been making are in chip design and advanced manufacturing techniques like friction stir welding with the iMac and what they did with the new Mac Pro. And with the ?Watch what's really impressive again is hardware; the S1 computer on a chip. The custom designed bands that are as good as high end watches.
I think Apple has lots of work to do on the software side of things. I look at that new email app from Google and wonder why isn't Apple doing stuff like that? And I use plenty of 3rd party apps that are much better designed than any first party iOS app. I would love to see Apple put a focus on making their software best in class again.
Reason why Google can do that and Apple can't (at least not yet) is Google excels at three areas that Apple is weak, or weaker, at - cloud infrastructure / architecture, search, machine learning / AI. That's the same reason that makes Google Now so powerful, not only as an assistant but contextually based services as well.
I think there are only a handful of these things in existence now. Apparently they didn't work, or at least GTAT couldn't get them to work for Apple. Apple would have been the logical purchaser of any machines, but that's not in cards now.
It was obviously mismanagement. Get someone in there who can actually manage it. Sometimes those who make the bricks can't make a building.
This material is the future. ...and no I don't own any stock. I just hate seeing advancement dissolve into nothing. At best, these furnaces will be purchased and continue to produce saphire. At worst, they will retrofitted for a different industry.
They can be repurposed, although I would prefer they continue to produce saphire.
Serious question, what is being said about the future of sapphire as a material, or what search terms might one try?
Technically, due to pormisarry notes, they have one. It's totally up to Apple right now as to how it will progress with this. Selling off the furnaces is not in their best interest, however they want to continue their "Lazer" like focus on future development. If Jonny has worked with Saphire that's great. I want the hardware and the newly purchased (maybe last year) Ram/chip design team to work with it. IBM has done extensive research on the memory capabilities of crystals (Quartz mostly). Saphire is 4 times better. Also, as they get down to extremely fragile tolerances in silicone, Saphire well overperforms. It's a future tech with 2000 furnaces to sell.
Edit. Just a fix.