It’s always interested when a company you are following closely suddenly goes belly-up. It should have been expected given that GTAT was not awarded production of larger screens on the iPhones and iPads but instead only producing tiny camera pieces – after investing huge amounts of money in a new production plant in Arizona. My suspicion is the one to benefit the most from this failure will be DOW CORNING, the joint venture between Dow Chemical and Corning. More news is bound to come out on the specifics of this company’s failure, most likely a mixture of production problems and lack of orders given its huge liability.
After falling almost 13% the day of Apple’s announcement of the iPhone 6 and Apple Watch GTAT stock dropped by another 14.5% today as investors dropped the ownership of the company speculated to be making sapphire screens for many or all do the new iPhones. Instead, GTAT will be producing screens only for the Apple Watch for the time being. This just goes to show how dangerous speculation can be – and how reacting to news quickly may say you a lot of money.
Regarding the future of GT Advanced, only time will tell if they will be included in the production of other device screens. The company already has business with the solar industry but the incremental benefit of sapphire over Gorilla Glass is disputed by Dow Corning and price conscious consumers. Perhaps the 6S will have these screens?
After Apple showed off it’s new iPhone 6 and the Apple Watch the stock for GTAT, or GT Advanced Technologies rumored to be the producer of sapphire screens for the new phone plummeted 13%. The September 9th event was devoid of mention of the sapphire screen for their phones, however their watch seems to be using the sapphire technology. This makes sense since the Sapphire screen on the iPhones would have forced Apple to increase their price mark by about $100 per unit, and the screen size on these watches are pretty small. Unfortunately this means less revenue for GTAT and hence the huge price drop. I do see GTAT advancing in the moderate to long term as more manufacturers embrace the scratch proof material going forward, and the use in just the Apple Watch will keep GTAT from under-producing.