Apple chip partner Dialog Semiconductor monitoring US-China trade war

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A customer shows his iPhone XS Max during the launch of iPhone XS and iPhone XS Max at an Apple Inc. store on the Nanjing East Road on September 21, 2018 in Shanghai, China. Apple Inc. released its new iPhone XS and iPhone XS Max smartphones in China on Friday. (Photo by VCG/VCG via Getty Images)

Last week, it was announced that Apple would buy part of Dialog’s business in return for a licensing deal that sees the latter supplying chips for the U.S. tech giant over the next three years. Apple will bring on roughly 300 engineers from Dialog — most of whom had already worked on chips for Apple’s devices.

“Apple has been a great partner for us for the last 12 years, we’ve had growing business,” Bagherli told CNBC. “This business becomes more and more strategic for them to in-source, to accelerate what they’re trying to achieve, and in return we can license part of our technology.”

“It’s not actually selling the business,” he added. “We retain the revenue of all our existing products, we’re licensing technology and we’re giving them very skilled engineers to use those technologies to create their own chips.”

The transaction was significant as it showed Apple is tightening its grip on chipmaking operations for its hardware products. Late last year, shares of Dialog took a sharp dive after the company told investors Apple was planning on cutting orders for its power-management chips from Dialog by about 30 percent this year. Apple plays a huge role in Dialog’s business — it accounted for 77 percent of Dialog’s sales in 2018.

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