Apple is said to have teamed up with Corning's rival GT Advanced Technology to produce sapphire screens for its iPhones and iPads.
On Monday, November 4, GT Advanced Technologies announced its financial results for Q3 2013 and also announced that it has agreed a multi-year supply agreement with Apple to provide sapphire material. The company also announced that it will own and operate ASF furnaces and related equipment to produce the material at an Apple facility, which will be based in Arizona. The company also estimates to employ over 700 people at the facility.
"We are very excited about this agreement with Apple as it represents a significant milestone in GT's long term diversification strategy," said Tom Gutierrez, GT's president and chief executive officer.
GT Advanced Technologies also confirmed that Apple has agreed upon a prepayment of approximately $578 million to secure sapphire supply. According to a DigiTimes report, the company is expected to use the funds to produce enough sapphire screens to produce around 33.79 million to 50.56 million iPhones per year. GT Advanced Technologies said the prepayment of $578 million will be reimbursed over five years starting in 2015.
"US$578 million can be used to procure 1,930-2,890 sapphire growing furnaces for a monthly production of 5.28-7.90 million mm of 2-inch-equivalent sapphire ingots, Digitimes Research indicated. Such a volume of sapphire ingots could be used to make screen covers for 33.79-50.56 million 5-inch iPhones a year, accounting for 17.8-26.6% of the estimated 190 million iPhones to be shipped in 2014," per DigiTimes.
Sapphire screens are said to be stronger and more scratch resistant than Corning Gorilla Glass. iPhone 5s, which features Touch ID fingerprint sensor, boasts of a sapphire crystal Home button.
Apple's deal with GT Advanced Technologies gives an indication that the smartphone maker may soon replace Gorilla Glass with sapphire screen. Most probably the sapphire screen will be made by GT Advanced Technologies, which may have a negative impact on Corning.
Many smartphones and tablets use Corning Glass. However, with Apple expected to use sapphire screens on its iPhones and iPads, other mobile device makers may also want to switch to sapphire screens in a bid to compete with Apple. And that's not good news for Corning.