GT Advanced Confirms Parting with Apple – Owes Apple $439 million

Posted by at 11:43 am on October 23, 2014

GT Advanced has confirmed its split with Apple via a press release, offering further details on the terms. “GT will be released from all exclusivity obligations under its various agreements with Apple,” the statement explains. “GT will retain ownership of all production, ancillary and inventory assets located in Mesa [Arizona] and Apple is provided with a mechanism for recovering its $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF sales.

“The agreement provides for a mutual release of any and all claims by both parties. As a result of the agreed upon terms, GT retains control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion, without restrictions.”

The company is leaving the sapphire production business entirely, and will be repaying Apple by selling off its furnaces over a four-year period. A “technical exchange” with Apple will continue to help GT develop future production processes, but only for the sake of making production equipment for other firms.

Although GT is retaining the factory assets in Mesa, the agreement doesn’t appear to offer any solace for the 727 workers who will lose their jobs at the plant. When GT first announced its bankruptcy, Apple said it would work to preserve those jobs.

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