Dialog shares fall on warning on Apple chips

london — Dialog Semiconductor said on Monday top customer Apple could build its own powermanagement chips into future iPhones rather than rely on the Anglo-German chipmaker, sending its shares plunging as much as 19 per cent.

The company, which analysts reckon derives more than half of its revenue from Apple, said there was no risk to its existing supply deals in 2018 and it was in the advanced stages of working with Apple on designing “2019-type products” that could lead to commercial contracts by next March.

“Our position remains that we have seen no material change to our ongoing relationship with Apple Inc,” Chief Executive Jalal Bagherli told investors on a conference call.

However, the company acknowledged for the first time that “Apple has the resources and capability to internally design a PMIC and could potentially do so in the next few years.”

PMICs are power-management integrated circuits that are vital to conserve battery life in products like Apple iPhones.

Investors are wary of companies that rely heavily on Apple, which has cut out several small suppliers in the past. The US technology giant said in April it planned to replace graphics chip supplier Imagination Technologies, sending its shares down 70 per cent in a single session. Imagination was subsequently sold off in two separate deals.

The Nikkei business daily last week quoted one source as saying Apple would make about half the iPhone’s power-management chips starting next year, with another source saying this could be delayed to 2019. Since then, Dialog shares have lost nearly a third of their value. At 1035 GMT, they were down 15.2 per cent at €26.47. — Reuters