Dialog hit by Apple move to make own PMICs

Tim Cook

The Nikkei report says Apple's power management chip "would be the most advanced in the industry".

Earlier this year, shares in London-listed chip designer Imagination Technologies tumbled after Apple said it would stop using its graphics technology for new products as it had developed its own version of the hardware, having used similar tactics of hiring many Imagination engineers.

One anonymous source said: "Based on Apple's current plan, they are set to replace around half of its power management chips to go into iPhones by itself, starting next year".

As Apple designs more components in-house, some suppliers may struggle to survive on their own.

20/11/17: KGI Securities is predicting that Apple's 2018 iPhone line-up will include "significantly faster" baseband chips, with Intel set to be the main supplier. This is bad news for Dialog Semiconductor, which now provides power management chips for smartphone manufacturers including Apple. The company designed chips for iPhones, iPads, and Apple Watches, and relied on Apple for 74 percent of its revenue previous year.

While Qualcomm will still have a hand in next year's iPhones, KGI notes that Apple is working on building its own baseband chips, in a bid to help it reduce costs in the future. It is possible that by using its own designed chips, Apple will be able to deliver better battery life on its iPhone by controlling power consumption of its mobile phones through software.

The Apple-designed chips would be exclusively manufactured by Taiwan Semiconductor Manufacturing Co (TSMC), according to industry sources cited by the newspaper. That contribution will grow to around 20% in 2017 and continue to rise in 2018, according to Bernstein Research. China-backed private equity fund Canyon Bridge made an offer for the company in September.

Dialog Semiconductor counts power management as only one of seven core markets it operates in.

The company's stock has already fallen by 15 per cent following Nikkei's report, although neither Apple nor Dialog have commented on the rumours.

There is also a rumor that Apple could be ditching Qualcomm and bringing in Intel and MediaTek for their LTE chips.



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