GT Advanced Technologies indicates Apple fines suppliers $50M for each leak

Just how seriously Apple (NASDAQ: AAPL) takes secrecy might now no longer be a secret. According to court filings made by Apple partner GT Advanced Technologies, which has filed for bankruptcy protection, Apple penalizes suppliers $50 million for each unauthorized leak of product information.

As The Verge notes, the documents do not specify Apple by name, but GT Advanced noted that it may be subject to fines for violating various confidentiality agreements that it has made with another company, and given both Apple's penchant for secrecy and its role as GT Advanced's key partner, Apple likely is the company that the filings are referring to.

Normally, Apple's suppliers are not even allowed to acknowledge non-disclosure agreements they have with the iPhone maker, but details are starting to spill out as a result of GT Advanced's bankruptcy filing. GT has put some of the blame for its dire financial straits on what it has called "oppressive and burdensome" agreements with Apple to produce synthetic sapphire screens for Apple.

According to the Financial Times, ahead of a new court hearing on Wednesday in New Hampshire, GT's lawyers are pushing for more information about GT's relationship with Apple to published, in the interests of creditors and shareholders.

GT Advanced faces a class-action lawsuit from shareholders, who allege that the firm "misrepresented and/or concealed" its financial health, its ability to meet Apple's requirements and its progress on producing the sapphire. GT did not respond to requests for comment, according to the FT.

GT Advanced has said it will cut 890 jobs and shutter factories in Arizona and Massachusetts. Apple has not commented on any of the latest recent developments. "We are focused on preserving jobs in Arizona following GT's surprising decision and we will continue to work with state and local officials as we consider our next steps," Apple said in a statement last week.

U.S. Bankruptcy Court Judge Henry Boroff has ruled that GT could keep details of its deal with Apple confidential, and also authorized GT to seal court papers that explained how its financing and supply arrangement with Apple went awry.

Many analysts had expected Apple to launch its new iPhones with sapphire screens this fall, due in part to Apple's agreement with GT. However, the iPhone 6 and 6 Plus screens use traditional glass. Apple last year bought a 1.4-million-square-foot Arizona facility from a solar-panel producer for $113 million and leased it to GT, which has been one of the leading sapphire manufacturers in the world. Apple had agreed to prepay GT $578 million to update the furnaces in the factory used to make synthetic sapphire, and GT had been operating the Arizona factory to produce sapphire exclusively for Apple.

For more:
- see this FT article (sub. req.)
- see this The Verge article
- see this Engadget article

Related Articles:
Apple's bankrupt sapphire supplier GT Advanced Technologies to shut down factories
iPhone 6 rumors: From NFC and VoLTE to sapphire displays
Report: Apple to bring sapphire screens to larger iPhone 6, iWatch

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