Apple’s €521m Dialog deal

Apple’s €521m Dialog deal

By Giles Turner and Nate Lanxon

Apple has signed a €521m deal with Dialog Semiconductor to license the UK chip designer’s power management technology and acquire certain assets, including more than 300 staff.

Apple will pay Dialog an initial $300m (€260.5m) plus an additional $300m for product delivery over the next few years.

The British firm also won a number of new contracts from the iPhone maker, including the supply of power management, audio subsystem, charging and mixed-signal integrated circuits.

Dialog’s shares rose as much as 34% in trading in Frankfurt. The deal comes almost a year after Dialog warned investors that Apple — its biggest customer —could design its own power-management chips in coming years. Dialog relies on Apple for about three-quarters of its revenue, predominantly through the supply of chips that handle charging and manage power in smartphones.

Dialog CEO Jalal Bagherli said the deal helps the semiconductor company scale down that reliance to “about 45%” over the next few years, and that “the licensing deal is non-exclusive, so we can use the IP for other customers without restrictions.”

Mr Bagherli said that “clearly if we have another $600m in the bank it helps us to not be reliant on borrowing for small deals at least”. While Apple has developed its own processors for years, the company only recently stepped up the in-house design of components, including graphics, Bluetooth and other phone-related chips. That’s expensive and creates new risks, but helps maintain leverage over suppliers after a wave of acquisitions cut the number of chipmakers it works with.

Apple began using its own graphics chips, or GPUs, in the iPhone 8 and iPhone X. That continued with the recently released iPhone XS and Apple Watch Series 4. Apple uses technology from another UK chip designer —Imagination Technologies —in products like the iPad and Apple TV but is expected to eventually transition all of its iOS-based products to its own graphics processors.

Following the deal with Apple, Dialog will concentrate on businesses including the Internet of Things, mobile, automotive and computing. Apple’s new hires consist of around 16% of Dialog’s total workforce.

The US company will also co-locate employees at some of Dialog’s facilities in Italy, Germany, and the UK. “Almost half” of Dialog’s employees across its two Swindon buildings would move to Apple.

Bloomberg

More on this topic

Apple expects positive quarterApple expects positive quarter

Apple resumes human reviews of Siri audio with iPhone updateApple resumes human reviews of Siri audio with iPhone update

Everything you need to know about Apple TV+Everything you need to know about Apple TV+

Navigate your way to the always-on Series 5 WatchNavigate your way to the always-on Series 5 Watch

More in this Section

Manager at Cork bank begins action aimed at preventing termination of her employmentManager at Cork bank begins action aimed at preventing termination of her employment

Cork JCD  building to become Ireland's greenest building Cork JCD building to become Ireland's greenest building

British Airways flights delayed by ‘technical issue’British Airways flights delayed by ‘technical issue’

Google bans ads targeting political affiliationGoogle bans ads targeting political affiliation


Lifestyle

This truck serves as an excellent metaphor for what needs to happen in our education system. A colossal truck needs to barge in front of it.Secret Diary of an Irish Teacher: Time to ditch private schools

Sorting out Cork people for ages...Ask Audrey: Is it still ok to just lob the gob after 10 pints?

Nip those winter ailments in the bud with the help of garden bounty. Fiann Ó Nualláin shows you how.Have a berry merry Christmas with the help of garden bounty

Dig a planting hole around three times the size of its pot and around the same depth, loosening the soil around the hole.Your quick guide to planting trees

More From The Irish Examiner