The possibly game-changing sapphire manufacturing facility built this year in Mesa, Arizona as part of a large scale collaboration between Apple Inc. (NASDAQ:AAPL) and GT Advanced Technologies (NASDAQ:GTAT) is almost fully constructed, according to a statement by Tom Gutierrez, the smaller company’s CEO.
Mr. Gutierrez declared that full-bore manufacture of corundum crystal boules will begin very soon, but that more problems had arisen than expected along the way to this successful outcome. Some of the problems and cost overruns were due to simultaneous construction and manufacture. Though details were not provided, large-scale inventory spoilage evidently occurred due to production halts caused by construction efforts taking place on the premises.
The plant’s siting in Mesa was caused by a number of incentives offered by the Arizona state government, including a $10 million package given directly to Apple (AAPL) and the creation of a foreign trade zone extension that includes the factory site. This last will exempt the facility from import and export duties, as well as cutting back on the customs paperwork needed, thus enabling the Cupertino company and GTAT to enjoy considerable savings.
Against this backdrop of qualified success, and the expectation of full sapphire manufacturing capacity likely being reached in 2015, several of GTAT’s Vice Presidents continue to sell off tens of thousands of shares of their own company’s stock. For example, David W. Keck sold off over 60,000 shares last Thursday, August 7th, 2014, while another VP sold off 30,000 shares from his portfolio more recently.
The value of GTAT shares as an investment continues to be uncertain. Some analysts believe that the shares, which are currently trading in the mid teens, are destined to fall back to their former level of selling for under $10 in the near future. Others are more sanguine, especially in light of GTAT’s successes in development of its advanced “Merlin” solar cell technology. Thus far, the market seems to be mildly bullish on GTAT, but long-term prospects remain vague.
The fact that Tom Gutierrez revealed problems and delays during his earnings call with investors and analysts lends weight to rumors that the iPhone 6 may not feature a sapphire crystal display after all, or that only certain models will. Sapphire might be confined to the 5.5. inch “phablet” version of the Apple (AAPL) device, for example, while the 4.7 inch version might feature another, as yet unknown covering stated to be harder than Gorilla Glass 3 but not as hard as sapphire on the Mohs scale.
