The Apple Watch supply won’t be affected by Apple’s sapphire partner GT Advanced’s recent Chapter 11 bankruptcy filing, says KGI Securities analyst Ming-Chi Kuo. But that doesn’t mean supplies of other products such as the iPhone will be on track, he warns (via MacRumors).
Bankruptcy has no impact on Apple Watch. As the Apple Watch sapphire cover lens uses an ingot of less than 6-inches, and as drop-test requirements aren’t so stringent as those of iPhone, general ingot manufacturing processes such as KY suffice for Apple Watch. This is why there are abundant sapphire ingot suppliers to choose from for Apple Watch. According to our survey, aside from GTAT, other Apple Watch sapphire ingot suppliers are Hansol (KR) and Harbin Aurora Optoelectronics (CN). We therefore don’t think GTAT’s bankruptcy will affect sapphire ingot supply to Apple Watch.
Actually, GT Advanced’s sapphire ingot isn’t the only option for Apple, although the iPhone maker preferred GTA’s sapphire due to its superior drop-test performance. (Interestingly enough, Ming-Chi Kuo cited the same drop-test results as a reason for Apple not to proceed with the sapphire display with the iPhone 6.)
The analyst is still confident of sapphire iPhones, but the bankruptcy has likely caused a roadblock in ASF (advanced sapphire furnace) production, as Apple allegedly depends on GTA, as the material provided by other suppliers wasn’t up to Apple’s standards.
GT Advanced’s shares have dropped following the Apple announcement last month, as the new iPhones lacked the rumoured sapphire display. This didn’t stop the sapphire manufacturer’s CEO, however, benefitting from the situation by selling GTA stock a day before the Apple media event.