More insight about the Apple-GT Advanced deal.

Today, Daisuke Wakabayashi from The Wall Street Journal (the article is behind a paywall. To read it, just Google the title, and click on the link provided by Google) published more informations about GT Advanced deal with Apple, and some insights about why GT filed for bankruptcy one month ago (if you don’t know about this GT/Apple deal, Wakabayashi recaps the entire story well in this article).

First, it shows why Apple chose GT Advanced, a sapphire furnaces maker who had no experience whatsoever in making sapphire (and making furnaces is not the same as producing sapphire - I don’t think Whirlpool is the best company to call when you’re making food for 100 people) :

Apple also was having trouble finding a sapphire manufacturer. An executive at another company Apple approached last year said it couldn’t make a profit producing sapphire at the price Apple wanted.

Second, it shows what seems to be an huge mismanagement inside of GT :

GT quickly set out to hire 700 staffers. Hiring moved so quickly that at one point in late spring, more than 100 recent hires didn’t know who they reported to, a former manager said. Two other former workers said there was no attendance policy, which led to an unusual number of sick days. GT managers in the spring authorized unlimited overtime to fill furnaces with materials to grow sapphire. But GT hadn’t built enough furnaces yet, so many workers had nothing to do, two former employees said. “We just kept sweeping the floors over and over,” one of the former employees said. “I just saw money flying out the door.”

And third, GT didn’t even delivered what was asked : sapphire glass who can be used for the new iPhones :

Producing sapphire proved to be the biggest problem. It took roughly 30 days and cost about $20,000 to make a single boule. The people familiar with Apple’s operations said more than half the boules were unusable.

So, it seems that Apple is a ruthless partner who pushes for the latest innovations at many costs (see how they managed to be one of the first -if not the first- to get 5K displays from LG Electronics, who didn’t even put them on their TV). But, with those management problems and failure to do what they were asked to do, proper blocks of sapphire, GT seems to be the one to blame here.

You should read the entire article; it gives some great material to understand the whole piece.