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Apple’s sapphire provider to close down two manufacturing plants

Apple better have a backup plan for the sapphire screens on its upcoming Apple Watch. The situation with its sapphire partner GT Technology does not look good. The company filed for bankruptcy earlier this week, and now announced plans to close two of its sapphire plants in Arizona and Massachusetts. 890 people will lose their jobs. This contradicts GT’s stated plans to continue business as usual, and it doesn’t look good for GT’s partnership with Apple.

Apple Inc. supplier GT Advanced Technologies Inc. GTAT -37.21% said Friday the closure of its Arizona and Massachusetts sapphire plants will cost 890 people their jobs. In filings with U.S. Bankruptcy Court in New Hampshire, GT Advanced called its agreements with Apple to produce sapphire materials for iPhones “oppressive and burdensome” and that terminating their deal was the only way to stop the bleeding. One of the filings seeks to reject GT Advanced’s contract with Apple, while the other seeks court permission to wind down its sapphire manufacturing plants in Mesa, Ariz., and Salem, Mass. “The cash burn at GTAT’s sapphire manufacturing operations for the benefit of Apple is not sustainable,” lawyers for GT Advanced said in the request to wind down the facilities.

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