Apple May Ditch Dialog, Analyst Says, Hitting Chipmaker's Shares

13 April, 2017, 00:44 | Author: Rachel Hardy
  • Dialog semiconductor logo

An analyst from German bank Bankhaus Lampe claims Apple is developing its own custom power management chips for use in its mobile devices.

LONDON, April 11 European shares fell on Tuesday as banks and tech stocks weighed, led lower by a slump in Dialog Semiconductor's shares, though energy stocks provided support.

Bankhaus Lampe has cited unnamed sources for its report, saying that Apple is reportedly working on two power management design centers, both in Munich and California. According to a source close to the matter, Apple has been "poaching like crazy" for Dialog engineers, trying to put together a team of top professionals. 'They are poaching like insane, ' the person said.

The company will, according to the report (via Reuters), look to replace power management chips which are now supplied by Dialog Semiconductor. However, he said Apple dropping Dialog "is unlikely in the short term".

Shares in the firm were down 14.6 percent to 40.80 euros ($43.19) in late trading in Frankfurt, where Dialog Semiconductor is listed. Dialog is reliant on Apple's custom as nearly 75 percent of its sales are to the Californian tech company.

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Unlike Imagination a few days ago, Dialog did not confirm Apple's plans.

Even if it does not manage to make the chips itself, it can always threaten its existing suppliers with the move. It follows Apple's decision to build its own iPhone graphics processors in a decision which has crippled another United Kingdom company, Imagination Technologies.

According to Reuters, BoA-Merrill Lynch suggests a recent engineering hiring spree at Apple could be explained by the need to develop other products, such as cars, entertainment systems and existing phones. Power management chips handle the amount of voltage and how much charge is supposed to go across the components in the device.

Apple sells tens of millions of iPhones every year.

Some analysts don't believe that it will ever come to that and disagree with Iltgen's prediction, as Barclays analyst Andrew Gardiner recently mentioned in a research note that he does "not see [Dialog] remotely in a similar position" as Imagination.

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