The equipment and materials manufacturer once called itself a “poster child for survival” in solar. Can it still live up to that claim? 

GT Advanced Technologies, a manufacturer of solar equipment and materials for consumer electronics, has filed for Chapter 11 bankruptcy protection in a New Hampshire court.

The news caps a wild ride for GT’s stock after it signed a deal with Apple late last year to provide advanced sapphire glass for phones and smart watches. Over the first half of 2014, GT’s value doubled due to an anticipation that sapphire glass would be used for the iPhone 6. However, Apple ended up using Gorilla Glass from Corning instead, causing GT’s stock to fall dramatically.

The company started off as a pure-play equipment provider for solar manufacturers, but has since diversified into other industries and other lines of business within solar. In 2012, it acquired Twin Creeks Technologies for $10 million in order to develop sapphire laminates for touchscreen computers and mobile phones. In 2013, GT acquired a line of equipment from Thermal Technology for producing LEDs and smartphone materials.

The company has also grown its offerings for solar manufacturers over the last few years, including a new type of furnace for producing monocrystalline ingots for solar cells and a new metallization process designed to cut material costs. However, both technologies are not yet commercially available.

Last July, GT’s Senior Marketing Director Jeff Nestel-Patt told GTM’s Eric Wesoff that the company was a “poster child for survival” in the difficult upstream solar business. Diversification was supposed to be central to that expected success.

The diversification strategy may have ended up hurting GT in the short term. Although GT will provide sapphire materials for Apple’s Watch, the failed iPhone deal appears to have caused significant financial turmoil.

Tom Gutierrez, the company’s CEO, said in a statement that GT is not about to collapse.

“Today’s filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet,” he said.

The Apple deal is a major reason for GT’s recent troubles. But the company’s issues run deep in the solar industry as well. Although global solar production has picked back up, equipment manufacturers like GT continue to face long delays for new orders. Equipment providers could be waiting until early next year for a wave of new business.

“The equipment sector hasn’t seen the same rebound because of that lag time,” said Shyam Mehta, GTM Research’s lead upstream analyst. “Businesses are just not operating with the same kind of volumes they once were.”

GT made a few one-off deals with solar manufacturers throughout 2012 and 2013, but saw a sharp downturn in activity compared to previous years. That was a major reason for expanding into the LED and consumer electronics sectors.

“I thought they were positioned fairly well to ride the recovery,” said Mehta. “It’s pretty unexpected.”

The company could still emerge from Chapter 11 in a competitive position. GT has $85 million in cash, a large supply agreement with Apple and a rebounding market for solar equipment. Last year, the German solar equipment provider Centrotherm went through a similar restructuring and has since bounced back — albeit with significant difficulties due to lumpy sales cycles.

GT will continue to operate normally while it restructures. However, trading of the company’s stock (GTAT) on Nasdaq has been frozen until more details about its finances emerge.

Originally published on Greentech Media 

By Stephen Lacey, October 6, 2014