Fri, Oct 12, 2018 - Page 10 News List

Apple to pay US$600m for Dialog assets, staff

Bloomberg

Apple Inc has signed a deal with Dialog Semiconductor PLC to license the UK chip designer’s power management technology and acquire certain assets, including more than 300 staff.

Apple is to pay Dialog an initial US$300 million plus an additional US$300 million for product delivery over the next few years.

The UK firm also won a number of new contracts from the iPhone maker, including the supply of power management, audio subsystem, charging and mixed-signal integrated circuits, a statement said yesterday.

Dialog’s shares yesterday rose as much as 33.6 percent in trading in Frankfurt, the most since October 2002.

The deal comes almost a year after Dialog warned investors that Apple — its biggest customer — could design its own power-management chips in coming years.

Dialog relies on Apple for about three-quarters of its revenue, predominantly through the supply of chips that handle charging and manage power in smartphones.

While Apple has developed its own processors for years, the company only recently stepped up the in-house design of components, including graphics, Bluetooth and other phone-related chips.

That is expensive and creates new risks, but helps maintain leverage over suppliers after a wave of acquisitions cut the number of chipmakers it works with.

Apple began using its own graphics chips in the iPhone 8 and iPhone X. That continued with the recently released iPhone XS and Apple Watch Series 4.

Apple uses technology from another UK chip designer — Imagination Technologies Group PLC — in products like the iPad and Apple TV, but is expected to eventually transition all of its iOS-based products to its own graphics processors.

Following the deal with Apple, Dialog is to concentrate on businesses that include the Internet of Things, mobile, automotive and computing.

Apple’s new hires consist of about 16 percent of Dialog’s total workforce, and the US company is also to acquire Dialog facilities in Italy, the UK and Germany.

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