GT Advanced Technologies has reached an agreement with Apple under which it will stop making sapphire materials and focus simply on supplying equipment to make sapphire crystals.
GT confirmed Wednesday that it would be released from all exclusivity obligations with Apple and a mechanism would be provided for Apple to recover its $439 million pre-payment to the company, without interest, according to Apple.
The former supplier to Apple filed for bankruptcy on Oct 6 in a stunning turn of events for a company whose fortunes looked bright just a few months earlier.
Little details have been released since the filing, which eliminated most of GT's market value and prompted speculation on what may have hurt its relationship with the iPhone-maker.
During a hearing this week at the U.S. Bankruptcy Court in Springfield, Massachusetts, GT said the expected deal with Apple would save money and let the company be more open about its mysterious Chapter 11 filing, according to Reuters.
"We realize that our filing for Chapter 11 protection has caused uncertainty and hardship for many of our important stakeholders," said Tom Gutierrez, president and chief executive officer of GTAT, according to AppleInsider. "We have been working diligently to develop a restructuring plan that will allow us to emerge from Chapter 11 as quickly as possible and with the operating flexibility and resources to position GT for long-term success. This agreement with Apple is an important step in that direction as it will allow us to monetize our advanced sapphire growth and fabrication technologies in an unrestricted manner."
On Thursday, GT announced that it would shut down its sapphire production factories in Mesa, Arizona and Salem, Massachusetts. The company has also laid off approximately 650 employees at the Mesa plant and expects additional job cuts in Salem.
GT will retain control of its intellectual property and will be able to sell off its sapphire fabrications technology without restrictions, the company said in a statement.
GT added that it will continue its "technical exchange" with Apple. The company didn't provide details about the nature of its future relationship with Apple however.
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