GT Advanced nears completion of Arizona plant, could raise production of sapphire coating materials for iPhone 6, other devices

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Date: Tuesday, August 5th, 2014, 10:12
Category: Hardware, iPhone, News


Apple should be able to make its quota for items that require a sapphire coating, especially the iPhone 6, with the opening of GT Advanced Technologies’ new factory in Arizona.

Per AppleInsider, GT Advanced Technologies on Monday said its Arizona sapphire manufacturing facility in Arizona, built in partnership with Apple, is nearly complete and will transition from initial manufacturing to volume production in the near future.

In its released results for the second fiscal quarter of 2014, the company revealed that its 1.4 million-square-foot plant in Arizona — a joint Apple build dubbed Project Cascade — is nearing completion, meaning the facility’s output should hit mass production levels in the near future.

For the quarter ending in June, GTAT posted US$58 million in revenue, a huge gain from last quarter’s US$22.5 million performance, but much lower than 2013 due to the buildout of Project Cascade. Overall, the firm posted a net loss of US$86 million in quarter two, more than double the $41 million loss seen at the end of March. For the first half of 2014, the company has lost some US$128 million.

Much of GTAT’s revenue growth came in the way of sapphire-related revenue, which hit US$44.1 million over the three-month period, up from US$5.6 million in the previous quarter. The ramp-up to production came at a heavy cost of $45.5 million during quarter two, up from less than $2 million in the first quarter of 2014.

Apple struck a deal with GTAT worth US$578 million last November and so far handed out three prepayments, this quarter’s amounting to US$103 million. If operational targets are met in Arizona, GTAT is expected to take receipt of the final $139 million prepayment by the end of October.

While Apple has limited use of sapphire to smaller components like protective covers for the iPhone’s rear-camera lens and Touch ID fingerprint sensor, the company is expected to soon deploy the hard material on a wider scale. Many industry watchers suggest the next-generation iPhone could feature a sapphire display, though a recent report threw cold water on the rumor, saying production yields may prohibit a large-scale rollout in 2014.

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