Apple: We're still GREAT pals with GT and we'd LOVE to team up again

But give us back our $439m

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Apple hasn't given up on scratch-resistant sapphire glass for future products and it might even continue to work with GT Advanced Technologies on the material despite its past difficulties with the company, according to documents released on Thursday.

In papers [PDF] filed as part of GT's bankruptcy proceedings, GT agreed to "keep Apple apprised" of its development of technologies useful for producing sapphire boules heavier than 165kg, while Apple said it would meet with GT "not less than quarterly" to discuss its progress.

A boule is a single, cylindrical crystal produced by synthetic means. Generally speaking, the heavier the boule of a given material is, the wider its diameter, meaning larger circular wafers can be cut from it.

GT was once rumored to be making tough sapphire glass for Apple's two latest iPhone models at factories in Salem, Massachusetts and Mesa, Arizona. But when GT reportedly couldn't produce sapphire that met Apple's standards, Cupertino canceled its deal with GT and eventually released the iPhone 6 and iPhone 6 Plus with hardened glass made by Corning.

That about-face effectively pulled the rug out from under GT and sent the company running for Chapter 11 bankruptcy protection. GT also said it would shut down its sapphire-making facilities and let go all related staff.

Yet in the documents released on Thursday, in which both companies agree to not say anything nasty about each other publicly, Apple said it hasn't given up on GT and that it has even granted GT an unrestricted license to use any sapphire production technology developed by Apple, in the interest of furthering its research.

But Apple still wants its money back. The documents disclose for the first time the exact amount that Apple loaned GT to build its Mesa sapphire factory – $439m – and that GT will pay back every penny over a period of four years.

To raise the funds, GT will sell off all 2,036 of the advanced sapphire furnaces (ASFs) it had installed at the Mesa facility. For each ASF sold, a portion of the proceeds will go to Apple, on a rate schedule that was not disclosed.

Curiously, Apple has retained the right to buy one or more of the ASFs itself, should the mood strike it, although it has not committed to doing so. Another option might be to explore a partnership with one of GT's competitors, such as Rubicon.

Selling off the ASFs of course means GT is still shutting down its sapphire production facilities. In a press release, the company said it has already laid off around 650 employees at the Mesa factory, but that a skeleton crew will stick around to help wind the plant down for good.

GT's R&D into sapphire production will continue, however, and as part of its agreement with Apple it gets to retain all of its intellectual property.

"We have been working diligently to develop a restructuring plan that will allow us to emerge from Chapter 11 as quickly as possible and with the operating flexibility and resources to position GT for long-term success," GT CEO Tom Gutierrez said in a statement. "This agreement with Apple is an important step in that direction as it will allow us to monetize our advanced sapphire growth and fabrication technologies in an unrestricted manner." ®


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