With GT Advanced Technologies asking permission to close down its Arizona factory after less than a year, it’s a fair question to ask where exactly Apple plans to get the sapphire displays for its forthcoming Apple Watch.
Earlier this week, KGI analyst Ming-Chi Kuo said that the bankruptcy filing wouldn’t affect Apple’s forthcoming wearables debut. According to a new report from Digitimes, the reason for this is that Apple has a backup plan in the form of two other sapphire cover suppliers besides GT Advanced: the South Korea-based Hansol Technics and China-based Harbin Aurora Optoelectronics Technology.
Hansol is an established business founded in 1995, which changed its name to Hansol Technics from Hansol LCD in December 2010. Alongside LED sapphire materials including ingot and wafer products, it also creates display and power modules for electronics equipment.
Harbin Aurora, meanwhile, advertises its main business as providing sapphire crystal materials R&D, production and sales services. The company offers products such as sapphire crystal rod and sapphire laser window.
Although Apple previously planned to do much of its sapphire production in the U.S., this change to other suppliers would not necessarily be as big a transition as it sounds. While the sapphire slabs were going to be grown in Arizona, the plan was always that they would be shipped to China, where they could be sliced and polished by Apple subcontractors.
The Digitimes report additionally affirms what many have suspected: that GT Advanced ran into problems based on the fact that its yield rates were not high enough to meet Apple’s satisfaction.
Citing its usual supply chain sources, Digitimes claims this yield rate was a dismal 40%, which was reportedly the major reason (instead of price) why Apple gave up on using sapphire covers for its iPhone 6 and 6 Plus.