It was reported on Thursday, Feb. 6, by 9TO5Mac, GT Advanced is now in receipt of sapphire manufacturing and testing equipment in its Arizona plant. Supposedly, these new apparatuses can produce anywhere between 100 and 200 million five inch iPhone (News - Alert) displays per year.

The GT Advanced Technologies advanced sapphire furnace (AS) is the ideal platform for producing high-quality, large-area sapphire substrates for markets that demand the highest grade sapphire material. Below is an image of the furnace.

This includes such uses as high brightness LEDs and other specialty industrial markets. GT Advanced has 40 years of proven sapphire production and crystalline growth process technology. The ASF combines a highly automated, low risk operating environment capable of producing consistently uniform sapphire boules that yield high quality material for a lower cost of ownership.

The rumor is that Apple (News - Alert) now has enough equipment necessary to start mass producing a strong, scratch resistant sapphire crystal display for its upcoming iPhone models. Currently, the iPhones feature Corning’s (News - Alert) Gorilla Glass for their displays. A sapphire screen could be a somewhat prominent change for future models.

There was speculation that sapphire components would be used for future Apple Touch ID fingerprint readers and caps for camera sensors however, these machines are specific for display-grade components, not small pieces of sapphire that could be used for Home buttons or cameras. With the ability to produce up to 200 million of these components, it is most likely that GT Advanced will be firing up display screens.

This collaboration could lead to some interesting future developments for both these companies. GT Advanced is not an exclusive Apple partner. It does manufacture components for other companies however, if you carefully read a recent SEC (News - Alert) filing, it does seem that all current work is being done exclusively for Apple.

For those of you who cannot get enough legalize the filing reads as follows:

9.1.1

Neither GTAT, nor any GTAT Related Entities, will directly or indirectly, without Apple’s express written permission: (i) supply to any entity (other than Apple) any [***], nor (ii) license to any entity (other than Apple) [***] nor (iii) provide services [***] to any entity (other than Apple) or otherwise enable any such entity to use or produce sapphire goods (whether for the benefit of such entity or for any third party), in each case for use in or in connection with Consumer Electronics Products; and

9.1.2

GTAT and GTAT Related Entities will include [***].

9.1.3

With respect to any exclusive licenses or distribution agreements GTAT has executed or may execute with any third parties with respect to Intellectual Property Rights that pertain to Sapphire Technology ***: (a) GTAT will pay all license fees, royalties and other compensation (including any annual minimum royalties or sales amounts), and comply with all other requirements and conditions of the applicable license or distribution agreements, as necessary for GTAT to retain its exclusivity thereunder throughout the Term or, if shorter, for the maximum period permitted under the applicable license or distribution agreement; and (b) GTAT will use best efforts to enforce its exclusivity rights thereunder (including, where possible, by enforcing or causing the licensor to enforce the licensed Intellectual Property Rights against third-party infringers) for the benefit of Apple with respect to any activities of a kind that GTAT would be restricted from undertaking under this Section 9.

To date, GT Advanced has received 518 of these sapphire crystal furnaces. Records indicate that there should be another 420 on the way. These initial units could produce somewhere between 103 and 116 million five inch displays per year.

It has been noted that although GT Advanced does produce products for other companies, most of its work recently has been mostly for Apple. Does this mean that Apple has some future plans in store for GT Advanced? That’s a topic for later discussion, what I can tell you is that analysts expect GT Advanced to deliver revenue of $692.5 million in 2014.