updated 06:22 pm EDT, Mon August 4, 2014
Production kicks into gear according to quarterly report, talks Apple payments
Apple's source for sapphire in Mesa, Arizona announced that its factory would be completing a conversion for "volume production" for its production machines shortly. GT Advanced Technologies announced the shift in their quarterly results, stating that the construction for the facility would be completed soon. Apple partnered with GT Advanced Technologies in November, investing in the company's expansion, which would in turn grant Apple exclusive supply rights.
Announced in November 2013, Apple and GT Advanced Technologies teamed up for the construction of a new sapphire facility containing GT's Advanced Sapphire Furnace in Arizona. Through the deal, Apple would make an investment in the building's construction, which GT Advanced Technologies would then pay back over five years starting in 2015. The deal also grants Apple exclusive rights on the supply chain, assuming they buy most of the factory's capacity.
"The build-out of our Arizona facility, which has involved taking a 1.4 million square foot facility from a shell to a functional structure as well as the installation of sapphire growth and fabrication equipment, is nearly complete and we are commencing the transition to volume production," said CEO Tom Gutierrez. "We remain confident about the long-term potential of the sapphire materials business for GT.
Information in the financial report, first caught by MacRumors, indicates that production is going to be underway in a large scale once the transition is completed. However, GT Advanced Technologies has also seen "strong interest" in their line of sapphire production tools, including the Advanced Sapphire Furnace. According to statements in the report, the sapphire part of the business resulted in 75 percent of its revenues.
GT added that it was waiting on a final prepayment from Apple that would influence their revenues in the next quarter. The company was required to hit certain operational targets to get the final $139 million payment from Apple, and said it believed it will reach those targets by the end of October, ensuring the payment.
It's also noted that the prepayment and sapphire sales to Apple are tied closely to the company's business outlook. There is a possibility that the Apple arrangement may not result in revenue for the period.