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Dialog says Apple can build its own power-management chips

FRANKFURT (Reuters) – Dialog Semiconductor (DLGS.DE) on Monday said top customer Apple (AAPL.O) could design its own power-management chips rather than rely on the Anglo-German chipmaker but said it saw no impact on its business next year.

Dialog semiconductor logo is pictured at a company building in Germering near Munich, Germany August 15, 2016. REUTERS/Michaela Rehle

Shares in Dialog, which analysts reckon derives more than half of its revenue from Apple, lost more than a fifth last week following a media report that Apple could design its own power management integrated circuits (PMICs) for use in iPhones as soon as 2018.

“Dialog recognizes Apple has the resources and capability to internally design a PMIC and could potentially do so in the next few years,” Dialog Semiconductor said. “Dialog does not have reason to believe its current expectations of 2018 Apple business would be impacted by such potential actions by Apple.”

Dialog shares were 4.7 percent lower at 0825 GMT, the biggest decliners among stocks in Frankfurt’s technology index .TECDAX, which was up 0.6 percent.

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 until 2019. (s.nikkei.com/2Al5nSl)

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”.

Reporting by Ludwig Burger and Christoph Steitz; Editing by Mark Potter and Edmund Blair

Our Standards:The Thomson Reuters Trust Principles.

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