Apple Settles With Failed Sapphire Supplier GT Advanced For $439 Million

Tech giant Apple and one of its suppliers have chose to cut their losses in a dispute over the material that was to be used in the screens of the company's smartphones.

After months of fighting, the Wall Street Journal reports that Apple and onetime sapphire supplier GT Advanced Technologies have reached an agreement that could dig GT out from under the $439 million debt it still owes to Apple. Apple will then scrap the parts and nullify the loan it made to GT. This is the conclusion of a yearlong effort by GTAT to sell off assets and get out form under Apple's hefty loan, which ultimately prompted a chapter 11 filing.

GT reached a deal that gave it time to sell the sapphire-making furnaces that anchored Apple's loan and use a few of the proceeds to pay off the loan.

Ars Technica recalls that in late 2013, GT was contracted by Apple to provide the sapphire glass displays for its iPhones and other gadgets. GTAT now intends to auction the equipment it acquired during the build-out of operations connected with the defunct partnership, according to the documents it filed with the U.S. Bankruptcy Court in New Hampshire on Monday.

In February, Apple announced a $2-billion, 10-year plan to turn the failed facility into a massive data center.

The supplier relationship never came to fruition - GT has alleged Apple changed specifications, while Apple claimed the company did not meet performance standards, according to the Journal. Either way, the deal fell apart and this is the end result.

With over 2,000 sapphire furnaces collecting dust for a year, and several companies wanting money from GTAT, the company proposed what amounts to a fire sale-style auction.

The new plan needs approval from a bankruptcy judge. Neither company has commented publicly on the filing. GT is looking at a December 31 deadline to get the furnaces out of the plant and says its best option is to invite bidders to a fast auction.