GT Advanced Technologies is the company supplying Apple with sapphire for the Apple Watch, with the company being previously rumored to have been working on panels for new iPhones, as well.
The company has announced that the partnership between the two companies is over because GT Advanced didn't stick to the agreed timelines for sapphire production. Thus, Apple had to abandon its plans for sapphire-protected iPhones and hold back a payment of $139 million which resulted in the bankruptcy of GTAC. Here's how the official agreement sounds like
The company will also sell its sapphire furnaces and will try to repay the $439 million that Apple gave it in advance. Also, pproximately 650 Mesa employees have been laid off. Apple also said the following:
"Apple put a lot of effort into an ambitious new sapphire manufacturing process with GTAT which is not ready for production. We’re going to continue evaluating GTAT’s progress on larger sapphire boule development, as well as consider other options for the facility. We remain committed to the city and we’re going to work with Mesa and Maricopa County to help the GT Advanced employees who will be impacted by this find new jobs."
Right now, we don't know whether this will have an impact on the Apple Watch launch scheduled to happen "early next year", but it definitely puts sapphire screen iPhones on hold until Apple figures out a solution.