Apple to convert failed Arizona sapphire plant into a data center

The company will spend $2 billion to turn the old sapphire factory into a "command center" for its global networks.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
3 min read

Apple will convert an Arizona sapphire plant into a data center similar to those run by Facebook and other tech giants. Facebook/Internet.org

GT Advanced's failed plant in Arizona will soon house servers instead of sapphire.

Apple, GT's former partner, on Monday said it will convert the facility in Mesa to a data center from its previous form as a plant that manufactured sapphire. Arizona Gov. Doug Ducey in a press release pegged Apple's investment at $2 billion and said the facility will employ 150 full-time Apple employees and will require 300 to 500 construction and trade jobs.

The new data center will "serve as a command center for our global networks," Apple said in a statement. "This multibillion dollar project is one of the largest investments we've ever made, and when completed it will add over 600 engineering and construction jobs to the more than 1 million jobs Apple has already created in the US."

The news Monday marks the end of the bungled chapter in Apple's history that was GT Advanced. The two companies had partnered in November 2013 to build the Mesa facility to produce sapphire, a scratch-resistant, transparent material that can be used for screens on tech gadgets. Apple at the time said the facility would employ 700 people and would create 1,300 construction and management jobs, and some market watchers expected the company to use sapphire in its newest iPhones. But GT struggled to get production off the ground, and Apple's iPhone 6 and 6 Plus launched with non-sapphire screens.

GT in October filed for Chapter 11 bankruptcy protection, a surprise move that came less than a year after it signed the $578 million deal with Apple. A few days after its filing, GT Advanced said it would reject about a dozen agreements with Apple and wind down its massive sapphire-production facility in Mesa. Apple had repeatedly said it sought to preserve jobs in Arizona after GT filed for bankruptcy protection. GT had employed hundreds of people at the Mesa facility, all of whom will be let go once the plant fully shuts down.

In bankruptcy-court filings made public October 10, GT came forward with an explanation for its surprise Chapter 11 bankruptcy protection filing, saying the cash burn from operating the Arizona sapphire-production plant for Apple wasn't sustainable and that GT needed to end work there to preserve the company.

A settlement between Apple and GT was approved by a bankruptcy court in December. GT now has four years to sell off the equipment in the plant to pay back Apple. The transition of the facility to Apple is part of a court-ordered process in which GT can use the facility through the end of the year. Apple won't fully regain control of the site until 2016.

The $2 billion investment from Apple is on top of the company's earlier investments in the facility.

Apple noted on Monday that like all Apple data centers, the new Arizona facility will be powered entirely by renewable energy. Most of the power will come from a new local solar farm, Apple said. Ducey said the Apple projects will produce 70 megawatts of clean energy, enough to power more than 14,500 Arizona homes.

Apple's "decision to bring this new facility to Mesa is a huge win for Arizona and a high testament to our business-friendly climate and talented workforce," Ducey said Monday.

Bloomberg earlier reported the news.

Ben Fox Rubin contributed to this report.