GT Advanced Technologies, a producer of sapphire materials, has reached a settlement agreement with Apple, confirming its split with the iPhone maker. Under the agreement, GT will wind down its sapphire materials production in the company's Mesa, AZ and Salem, MA locations. The company indicated that it will exit from the market as a producer of sapphire materials and will refocus its business as an equipment supplier, manufacturing and developing sapphire growth systems and processes.

GT, a former supplier to Apple, filed for bankruptcy on Oct 6. Few details have emerged since the filing, which triggered speculation on what may have soured its relationship with Apple. GT's bankruptcy filing followed a deal the company had struck with Apple in November 2013. GT Advanced was to have used the Arizona plant to make scratch-resistant sapphire exclusively for Apple.

Under the terms of the settlement agreement, GT will be released from all exclusivity obligations under its various agreements with Apple. GT will retain ownership of all production, ancillary and inventory assets located in Mesa and Apple is provided with a mechanism for recovering its $439 million pre-payment made to GT over a period of up to four years without interest, solely from a portion of the proceeds from ASF sales. The agreement provides for a mutual release of any and all claims by both parties. As a result of the agreed upon terms, GT retains control of its intellectual property and will be able to sell its sapphire growth and fabrication technology, including ASF and Hyperion, without restrictions.

"We are pleased with the settlement that we have negotiated with Apple," said Tom Gutierrez, president and chief executive officer. "We realize that our filing for Chapter 11 protection has caused uncertainty and hardship for many of our important stakeholders. 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."

Apple said it is studying options for sapphire supply and might work again with GT Advanced Technologies Inc if the distressed supplier can reduce production costs for the scratch-resistant material.