November 5, 2013
Apple To Open Arizona Plant To Produce Sapphire Components
Michael Harper for redOrbit.com - Your Universe Online
Apple will be expanding its American manufacturing to Mesa, Arizona, where it will produce sapphire components for its exclusive line of products.According to GT Advanced Technologies Inc. (GTAT), Apple had penned a deal to pay it $578 million to supply equipment for the production of high quality sapphire materials for its iPhones and other devices.
Sapphire is already used to cover the camera lens and TouchID sensors in the iPhone 5S, but the extraordinarily strong material is being eyed as the successor to Gorilla Glass, the material used to cover smartphone displays.
Apple and GTAT have signed a five year agreement, during which time the sapphire company will reimburse the iPhone maker for its injection of capital to buy the new, Advanced Sapphire Furnace, which is said to produce a higher-quality material at a lower cost.
In a somewhat surprising move, Apple has confirmed its investment in a statement, though did not specify exactly which components or products will be produced at the new plant. According to Arizona governor Jan Brewer, the new plant will produce no less than 700 jobs and bring some 1,300 construction workers to the area while the plant is being built.
“We are proud to expand our domestic manufacturing initiative with a new facility in Arizona, creating more than 2,000 jobs in engineering, manufacturing and construction,” said an Apple spokesperson in a statement to Bloomberg. “This new plant will make components for Apple products and it will run on 100 percent renewable energy from day one.”
Apple’s recent building projects, including its data centers and “Spaceship Campus” are also being built to be powered by renewable energy.
Though Apple didn’t specifically mention which components will be made in its newest plant, its exclusivity rights and existing products suggest the company will enlist GTAT to produce lens covers and LCD covers as well. As sapphire is nearly indestructible and virtually scratch-resistant, it has been eyed as the next material to be used in the smartphones that most often live in consumers' pockets. Many of today’s smartphones use Corning's Gorilla Glass to protect their LCD screens, but manufactured sapphire has been proven to be three times more durable and equally more scratch resistant.
With the new agreement, Apple could have exclusive access to a higher-quality sapphire material to be used in its products for the next five years.
The stock market reacted positively to this news as GTAT shares skyrocketed by 22 percent after the company formally announced the deal with Apple during an earnings call. Apple’s stock also saw an increase, though only by 1.3 percent.
“We are very excited about this agreement with Apple as it represents a significant milestone in GT’s long term diversification strategy,” said GTAT CEO Tom Gutierrez in a statement.