For the origins of the GT Advanced story, we go all the way back to the iPhone 6 and 2014, when Apple announced a new factory in Arizona where its supplier, GT Advanced Technologies, would produce huge synthetic sapphire crystals that would be the base of incredibly scratch-resistant covers for the iPhone 6 display. In what promised to create the same revolutionary impact Apple’s foray into Aluminium had made, in the fall of 2013, Apple agreed to advance $578 million in four installments to GT in exchange for sapphire glass that met certain technical standards. By late April 2014, the company had folded under the strain of trying to mass-produce sapphire glass, filing for bankruptcy after beginning work at the Arizona plant. While Apple withheld its final $139 million instalment, on earnings calls in the second quarter of 2014, CEO Gutierrez falsely stated that GT expected to hit performance targets and receive the fourth instalment payment from Apple by October 2014.
According to SEC associate director Anita B. Bandy, “GT and its CEO painted a rosy picture of the company’s performance and ability to obtain funding that was paramount to GT’s survival while they were aware of information that would have catastrophic consequences for the company. We will continue to hold chief executives accountable when they breach their most fundamental duty to make full and truthful disclosures to investors.”
The US Securities and Exchange Commission has charged the company and its former CEO with fraud, deceiving investors into thinking things would be fine shortly before the company’s collapse. Interestingly, the SEC says there’s no evidence that Apple unfairly drove GT into bankruptcy.
GT Advanced Technologies later exited bankruptcy, and is now privately held.