Tag Archives: Dialog
FRANKFURT (Reuters) – Dialog Semiconductor said Apple now planned to source the main power management chips (PMICs) for one of its three new iPhone models from two suppliers instead of just from the German chipmaker.
That means that Apple will order 30 percent fewer of the chips from Dialog this year than it had initially expected, Dialog said in a statement on Thursday.
The news sent its shares 3.9 percent lower in late Frankfurt trade. Dialog’s stock has lost more than half of its value over the past year on investor concerns that Apple is working on its own battery-saving chips for iPhones.
Analysts reckon Dialog derives more than half its revenue from supplying Apple with PMICs.
The reduced order volume for the PMICs will shave 5 percent off the chipmaker’s 2018 revenues, but Dialog said it still expected its 2018 revenues to grow year-on-year.
The impact on 2019 revenues is likely to be similar, Chief Executive Jalal Bagherli told analysts on a conference call.
He said Apple had not provided a reason for the change in its sourcing of chips.
“If you think about the fact that we are qualified for all three phones, that means there is no performance-related issue. It might be a statement of intent to reduce risk on having one supplier and have an alternative source,” he said.
He also said Apple had not told him who the second, new supplier of the main PMICs was but said he saw it as very likely that it was an in-house source at Apple.
Apple did not change the projected order volume for the other power management chip that Dialog is supplying for the new iPhone models – the sub-PMIC – nor for all other PMICs, including those for tablets, wearables and notebooks.
Dialog said it would continue to explore new mixed-signal opportunities outside of power management for future Apple products.
Reporting by Maria Sheahan; Editing by Adrian Croft and Alexandra Hudson
LONDON/FRANKFURT (Reuters) – Dialog Semiconductor said on Monday top customer Apple could build its own power-management chips into future iPhones rather than rely on the Anglo-German chipmaker, sending its shares plunging as much as 19 percent.
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 U.S. technology giant said in April it planned to replace graphics chip supplier Imagination Technologies, sending its shares down 70 percent 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. (s.nikkei.com/2Al5nSl)
Since then, Dialog shares have lost nearly a third of their value. At 1035 GMT, they were down 15.2 percent at 26.47 euros.
Bagherli said Apple’s feedback so far on 2019 product plans had been “very good” and that he expected to have more clarity by March on the terms of new business from Apple for 2019. Dialog would update investors when it had more details, he said.
Semiconductor suppliers are typically barred by Apple from revealing their supply relationships. Dialog, which has previously declined to name Apple, referring to it only obliquely as its “largest customer” or its “main business”, said it had received a special dispensation from Apple to mention it.
Dialog emphasized it “does not have reason to believe its current expectations of 2018 Apple business would be impacted” should Apple decide to design the chips itself.
Dialog, itself heavily reliant on the smartphone industry, said it was aware that in order to remain a key supplier to Apple it would have to continue to meet the U.S. company’s “technology, quality, price and volume expectations”.
The slide in its shares echoed one in April, after Bankhaus Lampe analyst Karsten Iltgen advised investors to sell the stock because Apple was working on its own battery-saving chip. The stock is off more than 40 percent since then.
($ 1 = 0.8434 euros)
Additional reporting by Ludwig Burger in Frankfurt; Editing by Edmund Blair and Mark Potter