Apple is investing 600 million US dollars to develop its own power management chips and other components for the iPhone and other devices. Apple is taking over divisions of the European chip manufacturer Dialog Semiconductor for this purpose. This includes the takeover of 300 Dialog engineers and other employees as well as the sites in Nabern and Neuaubing in Germany, Livorno in Italy and Swindon in the UK. In total, around 16% of the Dialog workforce will be taken over by Apple. Apple also secures licenses to some Dialog patents for power supply technology.
Apple is paying Dialog 300 million US dollars for the acquisition of the business units and patent licenses. Apple is also advancing a further 300 million dollars for purchases of Dialog products over the next three years.
At the end of May 2018, Dialog warned that the company could lose orders from Apple because the iPhone group was developing its own power supply chips. This put the share price under heavy pressure at times. Imagination Technologies, which was ultimately broken up after Apple developed its own GPUs and lost 60% of its sales, served as a warning example.
The first revenues from the deal for chips for audio, power supplies and battery charging ICs are expected to flow in 2019 and continue to grow in 2020 and 2021. The chip developer announced its intention to launch a share buyback program of up to 10% after the publication of its third-quarter figures. It is unclear what will happen to Dialog when the contract with Apple expires and whether it will then use the acquired know-how to develop the corresponding chips in-house.
