GT Advanced Technologies, the company that Apple struck a $578 million deal with last year for ultra-hard sapphire material, filed for Chapter 11 today in a federal court.
The move came less than a month after Apple revealed that it wasn't using sapphire to cover the displays of its newest iPhones.
But Ben Bajarin, an analyst with Creative Strategies, didn't believe today's bankruptcy filing was tied to the iPhone. Bajarin, who based his take on recent conversations with materials experts and Apple suppliers, said that sapphire wasn't ready for use as a glass substitute in the sizes demanded by the newest iPhones.
"I don't think that sapphire was planned [for the iPhone], and for quite a while," Bajarin said in an interview today. "Eventually it's a goal, but it's just not there yet."
Today, GT's chief executive stressed that his company is not shutting its doors. "GT has a strong and fundamentally sound underlying business," said Tom Gutierrez, CEO and president, in a statement Monday. "Today's filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet."
According to the documents GT filed with the U.S. Bankruptcy Court of the District of New Hampshire, the firm had approximately $85 million in cash on hand at the end of September, down from $331 million as of June 28 and far under the August projection of $400 million in cash it expected to have at the end of this year.
As of June 28, the company had assets of about $1.5 billion and liabilities of around $1.3 billion.
GT's Apple connection drove the news of its bankruptcy today: The company operates an Apple-owned Arizona facility where it intends to produce large quantities of sapphire, which Apple plans to use in some lines of its Apple Watch, the wearable slated to debut in 2015.
In November 2013, GT announced a $578 million, five-year deal to provide sapphire to Apple, with the money to go toward the purchase and installation of the equipment necessary to produce the material. GT is to reimburse Apple over a five-year stretch, beginning in 2015.
At the time, the news of the deal triggered a wave of speculation that Apple would use the sapphire as touch display covers for its iPhone, particularly the anticipated larger-screen model, which had been rumored for months. While that didn't come to pass -- according to tear-down experts, both the iPhone 6 and 6 Plus used Corning's Gorilla Glass 3 instead -- the mid- and top-tier Apple Watch lines are to use sapphire as their face-covering crystals.
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