Supplier bankruptcy sheds light on Apple practices

MANILA, Philippines – Court filings by GT Advanced Technologies (GTAT) revealed that Apple will fine its suppliers $50 million for each product information leak.

The Financial Times reports that GTAT wants more information about its relationship with Apple to be published as it calls the agreement “oppressive and burdensome.”

GTAT also asked the court to disclose the details for “the interest of their creditors, equity holders and other stakeholders” as it will also help them in their case.

GTAT was lent $578 million by Apple for a sapphire manufacturing factory in Arizona. Apple would not comment on what the facility is for, and GTAT could not comment either due to the agreement. Soon, rumors spread that the next iPhone will have a sapphire-based screen, though Apple only confirmed sapphire for its watch.

Last week, less than a year into the partnership, GTAT filed for bankruptcy.

GTAT’s stock went down significantly after the new iPhone 6 was revealed – without any mention of a sapphire screen. Shareholders also filed a lawsuit against the company for concealing its progress on what it was working on.

As for the use of sapphire on iPhones, Tim Bajarin said in a September article in TIME that sapphire is indeed scratch resistant, but more vulnerable to breakage than Gorilla Glass once there is a crack. He also mentioned that glass is more transparent than sapphire, with sapphire requiring more energy just to acquire the same brightness as glass.

GTAT currently owes its creditors and bondholders more than $500 million. If the court agrees to the request of GTAT, it may change the way Apple does business with its suppliers. – Rappler.com