Apple to Build New 700-Employee Sapphire Glass Manufacturing Plant in Mesa, ArizonaApple will build a new 700-employee manufacturing facility in Mesa, Arizona, to make sapphire glass, according to releases from the State of Arizona and GT Advanced, a New Hampshire-based materials manufacturing company. Apple is purchasing a vacant manufacturing building from First Solar for the new facility. The vacant building is apparently located at 3740 S Signal Butte Rd in Mesa, Arizona. According to a Phoenix Business Journal report last month, First Solar entered into an agreement to sell its Mesa facility for $100 million to an unnamed buyer. First Solar is expected to report a $55-60 million loss on the sale. According to GT Advanced, that company will "own and operate furnaces and related equipment" at a new Apple facility in Mesa, with Apple providing GT with a prepayment of $578 million that GT will pay back over five years beginning in 2015. Although the agreement does not guarantee volumes, it does require GT to maintain a minimum level of capacity. GT will be subject to certain exclusivity terms during the duration of the agreement. GT expects this arrangement to be cash positive and accretive to earnings starting in 2014. Gross margins from this new materials business are expected to be substantially lower than GT's historical equipment margins. However, the company believes the strategic nature of this agreement and the benefits associated with building a recurring revenue stream are important to its continued diversification.The State of Arizona issued a separate press release [PDF] that says the plant will create at least 700 jobs in the first year, plus an additional 1,300 construction-related jobs. Apple will also be investing in new renewable energy projects to power the new facility. "Apple is indisputably one of the world’s most innovative companies and I’m thrilled to welcome them to Arizona," said Governor Brewer. "Apple will have an incredibly positive economic impact for Arizona and its decision to locate here speaks volumes about the friendly, pro-business climate we have been creating these past four years. Their investment in renewable energy will also be greening our power grid, and creating significant new solar and geothermal power sources for the state. As Governor, I’ve worked hard to demonstrate that Arizona is open for business. Today’s news is proof that’s paying off."Apple provided a statement to Pocket-Lint confirming the facility: We are proud to expand our domestic manufacturing initiative with a new facility in Arizona, creating more than 2,000 jobs in engineering, manufacturing and construction. This new plant will make components for Apple products and it will run on 100% renewable energy from day one, as a result of the work we are doing with SRP to create green energy sources to power the facility.Apple uses small pieces of sapphire glass -- which provides superior durability and scratch resistance to other forms of glass -- to protect the cameras on the iPhone and on the home button for the new Touch ID-equipped iPhone 5s, however this would seem to be an expansion of Apple's sapphire glass efforts. A report from earlier this year suggested that future smartphones may use sapphire, a crystalline form of aluminum oxide, instead of more traditional forms of glass. Other reports have suggested that Apple has experimented with sapphire displays but found them infeasible. Additionally, Corning has claimed its Gorilla Glass 3 is a better glass solution than sapphire. One possible destination for Apple's new sapphire glass production is in a potential smart watch project. Sapphire is already extensively used in high-end watchmaking and could be more feasible on a small screen than the larger display on a smartphone or tablet. The move is a major expansion of Apple's production efforts -- in recent years, Apple has exclusively contracted with third parties to build and supply components for its products. Many pundits have speculated that Apple would begin using its $150 billion cash pile to grow its manufacturing efforts. The new plant is also noteworthy because it is in the United States. Apple will assemble its first computer in years in the United States at a Flextronics plant in Austin, Texas. Apple is prominently featuring the Mac Pro's manufacturing location in product videos and in the press. 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http://www.macrumors.com/2013/11/04/apple-to-build-new-700-employee-sapphire-glass-manufacturing-plant-in-arizona/
