Sapphire supplier GT Advanced has filed for Chapter 11 bankruptcy protection, according to a Monday press release. Trading of the company’s stock was halted in advance of the announcement, and once resumed caused shares to drop over 90 percent of their value. GT says it will continue to operate while under Chapter 11, but that as of September 29th, it had $85 million in cash.
Today’s announcement comes despite GT having close ties with one of the world’s richest companies, Apple. In November 2013, GT won a $578 million contract to supply Apple with sapphire, and set up a facility in Mesa, Arizona specifically for that purpose. The mineral is currently used in cameras and Touch ID sensors for Apple’s mobile devices, and will make its way into the Apple Watch once that product ships in 2015.
The situation could potentially force Apple to support GT financially and/or find alternate suppliers. Sapphire is a relatively rare material though, and the volumes Apple requires impose strict demands on any supplier.
