The sapphire glass factory that fooled Apple into investing is now being sued

       Sina Digital News on the morning of May 5th, the U.S. Securities and Exchange Commission (SEC) announced today that it has filed a lawsuit against GT Advanced Technologies (hereinafter referred to as GT) and its former CEO Thomas Gutierrez, accusing them of misleading investors about the company's supply of sapphire glass for the iPhone.

       The SEC said that in the fall of 2013, Apple agreed to pay GT $578 million upfront in four installments in exchange for sapphire glass that met certain technical standards. By late April 2014, GT products failed to meet Apple's standards, causing Apple to refuse to pay the final $139 million.

       However, in the second quarter 2014 earnings conference call, Gutierrez said that GT would achieve its expected performance targets and receive the fourth installment from Apple by October 2014. But GT filed for bankruptcy shortly afterwards, and the SEC believed that this caused "significant harm" to investors.

       The SEC said: "GT and its CEO painted an optimistic picture of the company's performance and ability to obtain capital that was critical to GT's survival, knowing that this information would have disastrous consequences for the company. If they violated their most basic duty to fully and truthfully disclose information to investors, we will continue to hold their CEO accountable."

       Five years ago, "sapphire glass" became people's eager anticipation for the new iPhone. The industry generally believed that this material could provide a stronger hardness than the existing Corning Gorilla Glass (Mohs hardness can reach 9, while Gorilla Glass can only reach 6), making the iPhone screen more scratch-resistant. With this, Apple can create a more perfect product.

       Sapphire glass does have this capability, but the material is expensive and can only be used in small areas, such as the glass layer outside the camera of a mobile phone or the outer layer of a high-end watch.

       Judging from GT's publicity at the time, they did exaggerate their capabilities, making the outside world believe that they could mass-produce sapphire glass at a much lower cost than at the time. Apple, which is good at investing in supply chain technology at an early stage, naturally did not want to miss the opportunity, so it invested $578 million that year, but it turned out that GT was unreliable.

       Currently, Apple continues to purchase Gorilla Glass from Corning for the outer layer of the iPhone's screen.