GT Advanced Technologies (GTAT) released their first fiscal quarter results on Wednesday, which ended on March 29, 2014. GTAT has seen a slight drop in revenue as its joint project with Apple in Arizona gears up to become fully operational by the end of this year. 

The company’s 1Q14 revenue slid from US $32.6 million in 4Q13 down to US $22.5 million in 1Q14. Sapphire glass gross margin was in the red, reflecting the impact if the ongoing build out of joint sapphire material project with Apple. 

Sapphire substrate is important for use in the Apple iPhone fingerprint recognition home button (photo courtesy: Apple Insider)

GTAT entered into a US $578 million sapphire glass manufacturing deal with Apple last year. The company received its second prepayment from Apple of US $111 million in 1Q14 and the third of US $130 million towards the end of the first quarter. The third prepayment is not included in the company’s 1Q14 balance sheet. So far, GTAT has received around US $440 million out of the US $578 million total prepayments. The company anticipates the total amount to fully fund capital outlays related to the Arizona project. 

“With respect to out Arizona project, we have now received three of the four prepayments from Apple. We continue to expect our sapphire segment to contribute meaningfully to revenue this year,” said Tom Gutierrez, President and CEO. 

There is speculation that GTAT and Apple plan to further expand their joint venture in the next few months. Insiders familiar with the construction of the plant in Arizona confirmed that the two companies are preparing for possible expansion which will double sapphire output, according to AppleInsider. 

“We continue to expect that 2014 will be a transformational and significant year for GTAT as our sapphire materials business ramps up and we continue to execute on our strategy of investing in new technologies that will help drive growth in 2015 and beyond, “said Gutierrez.