Shares in chipmaker Dialog plunge over Apple contract doubts
- Author: Carolyn Briggs Apr 11, 2017,
Apr 11, 2017, 21:56
The investment bank points to strong evidence that Apple is working on its own power management integrated circuits (PMIC), after which it might drop Dialog's battery-saving chip ("at least in part") as soon as 2019.
An 80-person Apple power management chip team would be small compared to the 1,200 engineers at Dialog, including 900 chip designers, of which about 500 are believed to be working exclusively for Apple, according to the report. He downgraded the stock to "sell" from "hold".
More than 4.4 million Dialog shares had changed hands by mid-morning making them the busiest traded stock by far on the STOXX 600.
It was just a few days ago that news broke of Apple ending its licence agreement with British graphic chip-maker Imagination Technologies, causing the latter's stock to plummet. Imagination shares plunged 70 percent on the news last week. In today's case about power management chips, neither Dialog nor Apple have said anything about their future plans.
The company will, according to the report (via Reuters), look to replace power management chips which are now supplied by Dialog Semiconductor. Another source said Apple is "poaching like crazy" from Dialog, hiring top engineers from the company and ramping up to begin its own in-house efforts.
Apple declines to comment on matters involving its supplier relationships and did not respond to a request for comment for this story. 'They are poaching like insane, ' the person said. This follows the news that Apple intends to make custom GPUs for its iOS devices within two years.
In 2014, merger talks between Dialog and Austrian sensor chip maker Ams AG fell apart after they failed to come to terms. "Customer diversification seems more important than ever".
But Apple still relies on key suppliers to develop innovations ranging from image and motion sensors to power management.