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Apple supplier finance woes impact local firms in bourse

Apple supplier finance woes impact local firms in bourse

Taipei, Oct. 7 (CNA) Financial woes of U.S.-based GT Advanced Technologies Inc., an Apple Inc. sapphire supplier, sparked concerns over the global sapphire business outlook, prompting investors to sell shares of GT Advanced's counterparts in Taiwan Tuesday, dealers said. The sell-off in local sapphire stocks emerged soon after the local bourse opened in the wake of a move by GT Advanced to file bankruptcy protection in the U.S. Bankruptcy Court for the District of New Hampshire a day earlier, the dealers said. Among the local falling sapphire stocks, shares of Crystalwise Technology Inc. lost 2.35 percent to close at NT$27.00 (US$0.89), while shares of Acme Electronics Corp. shed 3.80 percent to end at NT$38.00. The index on the over-the-counter (OTC) market, where the two stocks are traded, ended down 1.13 percent at 140.47 points. In the local emerging stock market, shares of Tera Xtal Technology Corp. fell even more than 12 percent at one point and shares of Crystal Applied Technology Inc. dropped over 8 percent at one stage in the wake of GT Advanced's court filing. Market analysts said that as GT Advanced has been seeking bankruptcy protection, many investors have become cautious about the global sapphire business and preferred to lower their holdings in local sapphire stocks for the moment before the U.S. supplier's financial situation shows signs of improvement. In November 2013, Apple signed a deal to make a prepayment of about US$578 million to GT Advanced to build furnaces used to make synthetic sapphire. After the agreement, many analysts anticipated that Apple would include sapphire in its new iPhones, but it turned out that Apple did not use sapphire in its two new iPhone models -- the iPhone 6 and iPhone 6 Plus -- which were unveiled in September. GT Advanced is hoping that the court will allow the company to continue to operate to generate sales and turn its poor financial condition around. Analysts said the market is watching closely whether smart watch vendors will use sapphire in their devices, adding that sapphire suppliers need to improve their yield rates to secure orders. (By Jalen Chung and Frances Huang)


Updated : 2021-04-21 01:08 GMT+08:00